MIP-9: Feeder Pools
Posted by a representative of the mStable protocolDAO
Following the deployment of MIP-7, it’s possible to extend the mAssets by creating “Feeder pools” composed of 50% fAsset and 50% mAsset. These Feeder Pools (fPools) provide important benefits to mAssets by:
mAssetswaps (effectively allowing users to ‘mint’ mAssets with any fAsset)
- Leveraging the
mAssetSAVE rate by providing a source of demand for mAssets from within mStable (thus increasing mAsset SAVE APY)
- Feed swap fees back into the
mAssetby supporting trades between fAsset <-> mAsset bAssets
This MIP outlines the implementation details for fPools and proposes that mStable actively deploy these to stimulate growth and mAsset utility.
fPools maintain the bulk of functionality from mAssets:
- Same interface for Mint/Swap/Redeem
- Protected through max weights
- Ability to deploy fAsset/mAsset onto third party lending platforms to generate yield
- Governed by vMTA holders
- Ability to enable a governance fee, which extracts a % of total pool revenue
There are a number of core differences between fPools and mAsset pools
- fPools support mint/swap/redeem using assets within the mAsset basket in addition to it’s own basket
- fPools produce LP tokens that increase in value, rather than inflate supply
- Swaps into mAsset do not apply a fee
- fPools are always composed of 50/50 fAsset/mAsset, and use an invariant derived specifically for 2 assets
- fPools are not protected by MTA in the event of an underlying asset losing it’s peg
Incentivising liquidity on these pools will provide on/off ramps, generate swap volume and leverage mAssets SAVE utilisation rate - thus making them ideal options for MTA rewards. Additionally, it provides another place for projects to incentivise their own asset liquidity and benefit from MTA token emission.
In addition to discussing whether or not this proposal should be deployed, the initial Feeder Pools for both mBTC and mUSD should be decided up too.
Candidates for mUSD include:
- Terra (UST)
Candidates for mBTC include:
It is proposed that 2 initial Feeder Pools for each mAsset will be created.