Posted by a representative of the mStableDAO
Note: This MCCP assumes a positive resolution to MIP-9.
Note: This MCCP does not propose changes to the MTA assigned to Staking rewards or MTA/ETH pool
It has long been proposed that major optimisations can be made to the MTA emission. This MCCP proposes a major revamp; bringing all the incentives “in-house” to create better circular effects, reduce MTA sell pressure and maximise TVL. This proposal also outlines a prospective emission schedule over the next few years, and a set of rules to follow in order to calculate weekly distributions.
The MCCP proposes that mStable:
a) stop incentivising mAsset liquidity on third party protocols and focus entirely on Feeder Pools (e.g. tBTC/mBTC feeder pool, which has an effect of leveraging & giving more fees to mAsset SAVE)
b) change the rewards contracts so that X% of MTA is unlocked immediately and Y% is vested over Z months (like the current imUSD vault), with a boost for being an MTA staker, thus incentivising LPs over a longer time period
c) stick to the outlined emission schedule (over the next 16 weeks) and ruleset defined here in order to calculate weekly pool distributions
The current incentives structure is inefficient and does not promote long term project alignment. LPs are rewarded for providing mAsset liquidity on to third party platforms, which, while providing some utility for mAssets, does not induce circular effects in mStable, and benefits the third parties moreso. In addition, LPs are only incentivised over a very short time period as the rewards unlock immediately, thus incentivising ‘flash’ liquidity provision and short term outlook on MTA. Thirdly, the calculation of quantities and determination of which sources should receive MTA emission is inefficient and could be optimised with a ruleset.
This MCCP interacts positively with MIP-8 and has the power to set the tokenomics on a different course: increasing mStable TVL, increasing fees to mAsset SAVE, increasing revenue to buy & make, reducing sell pressure for MTA and causing people to be MTA bulls due to the lockup and the rewards gained from being a staker.
Goals of MCCP-4:
Utilise MTA to generate circular effects for mStable
Increase net fees going in to mAsset Save
Leverage utilisation rate for mAsset Save
Increase revenue allocated to Buy&Make
Maximise mAsset TVL
Maximise demand for MTA
Reduce sell pressure for MTA