In light of MIP 29 this MIP 36 proposes that mStable is merged into Spool DAO. All MTA holders will be able to swap their MTA tokens to SPOOL tokens and, therewith, become members of a growing and sustainable community/DAO with complementary products to what mStable is currently offering. Basically, keeping the idea behind mStable, to offer easy yield optimization and make DeFi more accessible, at a new and advanced home with a strong probability of success.
With MIP 29 mStable stakeholders voiced concerns about the future of the project and the open community was asked to come up with potential solutions.
This proposal was prepared by the working team behind Spool DAO and offers a strong path forward.
Spool in a nutshell:
Spool is a permissionless DeFi platform that connects Capital Aggregators with DeFi Yield Generators.
With one deposit you can access multiple yield farms of your choosing managed by DAO-curated Risk Models, Spool will auto-rebalance, auto-compound, and maximize yield. Set and forget. Additionally, Spool allows you to build your own yield strategies and risk models with a few clicks. According to the chosen risk tolerance level, portfolios are auto-rebalanced and capital is automatically compounded. Spool minimizes transaction costs, optimizes DeFi yields, and brings DeFi risk management to the next level.
The guiding principle behind this proposal is to offer all involved parties a beneficial and effective outcome from the current situation.
- MTA holders will be able to swap their MTA for SPOOL tokens worth up to a converted minimum of 1.3 million USD - providing a new and vibrant home in Defi
- This swap option will be open for two years
- Currently vested MTA permission will be included in the offering
- The mStable community will merge into the Spool DAO community to thrive together
- All assets of mStable, including the full treasury, will be transferred to Spool DAO to make the most efficient use for the benefit of the joint mStable and Spool community
- The mStable product sunset could follow the approach outlined in MIP 31
- Spool DAO would like to offer a position to at least three mStable team members to join the team behind Spool to develop the future together. Unfortunately, the mStable team did not offer more conversations about possible further team member integrations so far but Spool DAO is open to interviewing every single member. All Team Members that, upon conclusion of the interview, will seek to be hired, get a similar compensation to what they currently have including a bonus of SPOOL according to set KPIs.
- Spool DAO seeks to develop a stablecoin built upon the Spool protocol most likely in form of a Sub-DAO and we welcome every team member of mStable to open a conversation with the Spool team to discuss this further
Since its initiation mStable has built a good brand and great community around a product that did not yet find its full product market fit in the ever-changing DeFi space, as relayed by the stakeholders in MIP 29. In the understanding of the Spool team the new underlying idea behind mStable, providing optimized yield in a decentralized and non-custodial protocol, is great but, unfortunately, it did not work out with the given resources to make mStable the success the investors and team desired.
At Spool DAO, we are building since two years a comparable solution with a slightly different approach and already offering more features to our users in current Version 1 of the protocol.
With this proposal, all MTA holders would find a new home which caters to their beliefs and expectations of the future in a similar manner but on a more sustainable and promising path forward. Here are some facts about what we mean by that:
- The current treasury of Spool DAO allows further development until 2027 and beyond
- Smart Vaults at Spool can be created by everyone
- Already 17 yield strategies to build upon are integrated and more are coming every month
- The protocol had a Total Value Routed of >70m and never got exploited
- Version 2 with a vast expansion of possibilities is currently being audited by Trail of Bits
- In the partnerships pipeline are multiple signed LoIs which shows the interest from 3rd parties in the product
- With the additional launch on Arbitrum at the end of February the expansion and outreach process started which will unfold over the upcoming months
- … to keep it short, an outstanding product is out and trusted, is going to be extended and evolved with the upcoming v2, and will be very hard to compete with by others
At Spool DAO we love efficiency, which is one of the core reasons why we build our DoHardWork function which rebalances and auto-compounds millions of funds on a daily basis, and in our understanding, it makes more sense to merge the mStable brand, community, and treasury into one offering to increase the probability of success. Offering and developing two comparable solutions leads to capital inefficiency, which is why we aim to combine energies and move the space forward in a joint manner now and not when it may be too late.
At the same time, we love the DeFi space and aim to move it forward as much as we can. In the light of this proposal, the end of one attempt to pursue the same can mean the acceleration of another, seemingly more fruitful approach and we are looking forward to combining forces to achieve our vision of providing the DeFi users a true value-add via the growing Spool ecosystem together.
With this proposal we want to provide a beneficial way out of the current mStable situation for all involved parties including a higher value add than e.g. shutting down dors later or a simple treasury payout, to drive the future of DeFi together.
Outlined here are more details of the merger from mStable into Spool DAO. Direct questions from the mStable team are answered within this MIP at the according sections.
Current situation at Spool DAO
- Spool DAO has a liquid treasury worth >$11 million USD (more info in the Spool docs
(Link not allowed)) and a runway beyond 2026 without any revenue
- Currently, Version 2 of the Spool protocol is being developed and is in the final auditing steps with Trail of Bits. A second high-class audit is planned to start soon after
- The overall team consists of around 25 people with a vast amount of experience in their respective field
- 17 different yield strategies are currently implemented on Ethereum and Arbitrum and more will be added in the upcoming time
Swap of MTA to SPOOL
- Spool creates a smart contract that allows the deposit of MTA until a certain point in time. We propose one year after the final decision is made
- Spool will create a deposit/claim page for this
- All deposited MTA will receive SPOOL converted up to a total of 1.3 million worth of USD
- If the planned stablecoin product is forecasted to need less than 450.000 from the mStable treasury funds this value of 1.3 million will be increased proportionally to a maximum of 1.5 million USD
- The exact MTA/SPOOL ratio will be fixated when the claim page is live (probably one month after the final decision from both sides)
- The payout will follow a cliff and vesting period
- We propose a cliff of 1 (3) months and a vesting period of 3 (6) months for retail investors (team & early investors) in MTA
- When the swap is claimed and until the start of the vesting period or until SPOOL is claimed afterward, the SPOOL tokens will receive staking rewards and accrue voSPOOL
- Currently vested MTA permission will be included in the offering to 100% if the respective person/entity holds more than 1/3 of this amount in liquid MTA and up to 75% if the liquid ratio is below 1/3
- After the deal is decided from both sides, the team behind Spool wants to start 1-1 conversations with every early investor in mStable to get to know each other and to make sure that mindsets are aligned
- Additionally, a swap will be offered that allows swapping MTA to stables directly at the same ratio/valuation provided for the SPOOL tokens. This periode ends one month after going live of the claim page. Therefore, every MTA holder can decide to swap their MTA to SPOOL or DAI/USDC/T worth overall of 1.3 million USD
Merge of mStable into Spool DAO
- The mStable community will flow over to the discord, telegram, government forum, and other social channels of Spool to become a member of the new family and thrive together
- All assets of mStable, including the entire treasury worth around ~2m USD, will be transferred to the Spool DAO treasury multisig to make the most efficient use of it. As costs will arise at Spool DAO for the aftermath of the transition, these transfers will be done two weeks after the final decision from both sides.
- All socials and the brand will be merged into Spool’s and the mStable team will provide best efforts to increase the value add as much as possible and to make this process as frictionless as possible
- If possible, Spool would be interested in becoming a member of the 4626-Alliance and taking mStables seat there to contribute and drive this endeavor forward
- Owners of funds that are currently deployed in the mStable vaults will be kindly asked from mStable side (via announcements and direct comms with known parties) to move the deposited funds to the Spool Smart Vaults (with potentially higher yields) to increase the TVR and show trust in the multiple audited infrastructure of Spool DAO
- Every team member of mStable is offered an interview and upon fit offered a position within Spool without waiting times. Three of such interviews were concluded and Spool is interested in offering these team members positions right away.
- Up to 450.000 USD of the mStable treasury is set aside to cover parts of the costs for these new positions. Mainly meant to build a stablecoin on top of Spools protocol, most likely in the form of a Sub-DAO. Additional funding for the future of these endeavors will be provided by Spool DAO.
Technical Sunset of mStable
- As the Smart Vault product of Spool DAI is more advanced than mStable Meta Vaults, with this MIP a product sunset of Meta Vaults is proposed, although it hurts to see all the effort and time to see as sunk costs. For an economically viable future, this is the most logical result
- Potentially, the mAssets product could be transitioned into the stablecoin build on top of Spool DAO but further technical discussions with the mStable team members need to happen to say this with certainty
- After the conclusion of the merger the teams will work together on the roadmap of Spool DAO, which might be advanced with ideas from the mStable team upon further conversations
- The general mStable product sunset could follow the approach outlined in MIP 31
Further information and thoughts can be found at the Spool RFC.
The team behind Spool DAO is looking forward to welcoming the community and team of mStable to move forward together.
If this proposal is accepted by the mStable stakeholders, a similar proposal will be brought to Spool DAO to accept these terms which is the single entity for final major decisions at Spool. This will go out the week after this MIP 36 (MIP 30) is voted on and will last for a week. If this proposal at Spool DAO is voted on with “Yes” the transition process would start immediately. Further discussions after the two decisions, in the event that the stakeholders of both projects agree to the merger, will be held by the respective team members with the best interest of the mStable and Spool DAO community in mind by acting in an efficient and effective way.