mStable Association Genesis Grant Request

mStable Association Genesis Grant Request

Posted by a representative of the mStable Association

mStable is governed by Meta Governors. Proposals are put forward to vote and ultimately ratified (if they pass a vote by Meta Governors) by two independent entities in the mStable ecosystem: The mStableDAO and the ProtocolDAO.

Additionally, a Swiss based “mStable Association” was recently established to indirectly support the mStable ecosystem. It will in no way control mStable; it was established to support mStable through giving out grants. Recipients of these grants will be determined through an open application process.

As an open and decentralised protocol, mStable should have multiple entities supporting its development and decentralisation, and this will make it more resilient as a whole going forward.

The association will be run by James Simpson, co-founder of mStable.

About the mStable Association

In simple terms, the mStable Association will serve the following functions:

  • The Association can receive donations, bequests and/or independently raise capital to fund the mStable ecosystem pursuant to its purpose.
  • The Association is an alternative physical-world supporting entity and funding source in addition to the mStableDAO. It creates redundancy to mStable’s support and funding.
  • The non-for-profit entity is based in a stable and crypto friendly jurisdiction (Switzerland).
  • The Association will be able to fund the protocol’s growth efficiently and transparently, while supporting and being additive to the protocol in its continued decentralisation.

The Grant request

In order for the Association to begin giving grants to support mStable’s long term development, it is proposing that the mStableDAO seed it upon request until 31 December 2021 with initial funding in the following ranges:

  • 5,000,000-8,000,000 MTA
  • circa 500,000 USD, derived from the mStableDAO selling its accumulated BAL token holdings

It is worth emphasising that the association can only deploy funds according to its purpose, which is funding development, continued decentralisation and growth of the mStable protocol . The association has committed to being transparent about all approved grants. Any MTA granted to the association will not be used for staking or governance to retain its independence and non-controlling nature.

Funding timeline

After discussion on this forum post, the mStable Association requests that a snapshot poll be held to decide on the outcome. If the grant is approved by the community the transfer of the funds can be requested by the Association until 31 December 2021, provided that a positive clarification on tax matters (in the form of a respective tax ruling) and regulatory matters (in the form of a no-action letter from FINMA) has been obtained by then.

Conclusion

We look forward to hearing feedback from the broader community, and hope that the mStable community sees value in the ongoing efforts to further decentralise mStable’s funding and governance to make it robust and secure for years to come.

7 Likes

@james.simpson will you be taking a salary for running this organization? Can you please provide details on that, if so?

  • Why is there a need to create an additional entity?

  • 5M-8M MTA ($13M-$21M at current prices) as an initial seeding plus eventually more funds until Dec 2021?

  • Could you share more details please?

Thanks

To me, this makes a lot of sense from regulatory and back-stop standpoints, and seems like it will pave the way for many other protocols to follow suit, if they haven’t already done so in their own structure.

Switzerland is a key location to deploy in, and having a physical body present there will make a lot of future negotiations much simpler and streamlined in my humble opinion, while maintaining full decentralization of the executive bodies of the project outside of this jurisdiction.

The amount requested feels good to me, targeting a very low double digit percentage of the treasury right now that should kickstart the Association, and the growth process that comes with it.

One should not underestimate the need for a physical presence in the real world to represent a projects vision that is operating completely decentralized, and otherwise wouldn’t be able to have a voice this way :grin:

3 Likes

If the organisation gets funding and receives the go ahead on the above tax ruling and non-action letter, I will be the association’s CEO and will receive a salary for this work as I do now for my fulltime job working on mStable

The entity is needed to provide additional support to mStable as the protocol decentralises. The Association can receive donations, bequests and/or independently raise capital to fund the mStable ecosystem pursuant to its purpose. As flagged above:

  • The Association is an alternative physical-world supporting entity and funding source in addition to the mStableDAO. It creates redundancy to mStable’s support and funding.
  • The non-for-profit entity is based in a stable and crypto friendly jurisdiction (Switzerland).
  • The Association will be able to fund the protocol’s growth efficiently and transparently, while supporting and being additive to the protocol in its continued decentralisation.

The amount of MTA and USD is designed to fund the development of mStable for at least 3 years.

2 Likes

Having known James Simpson for a long time, I can vouch for him as the perfect trusted person run the mStable Association. In addition:

  • Having this independently run regulated entity in Switzerland to support mStable in the years to come will be real asset to the continued growth of the mStable ecosystem

  • The funding amount seems reasonable and will give the necessary long-term stability needed to balance the need for moving quickly while keeping with the decentralised ethos

  • I especially appreciate that all grants will be fully transparent to the community

I plan to support this genesis grant request if it’s put up for a vote.

7 Likes

In favour of the proposal - entity and subsequent funding could be used to

1/ coordinate decentralization and development efforts

2/ attract key talents in engineering, development, marketing, community and operations around the world

3/ for the sustainable and long term development of the protocol

2 Likes

This makes sense and is a smart structure to help push forward with the continued decentralisation of mstable yet ensure the funding for its continued growth is readily avilable. The amounts proposed seem reasonable for the mission of the Association

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This is a logical progression for the project and I support this move.

It’s a proposal which I see as being aligned to the projects success.

I am in full support of this. James is the right person to take on this role, and the amount seems appropriate for what the association is aiming to achieve. This will be a huge step for the decentralization of the protocol.

1 Like

Great move. Positioning a supporting entity in a stable jurisdiction will provide a strong foundation for the protocol. Happy to see the progress!

Are there tax implications to reallocating the assets?

There is a pending tax ruling that asks that any donation, bequests or grants to the association aren’t taxed when given to the association. Again, the proposal above only requests the funding should the tax ruling and the non-action letter come through.

Good to see the discussion here. mStable will definitely be in good company in Switzerland with the Ethereum Foundation and others based there as well.

One thing that comes to mind is how the Association can maximise its position by having the right amount of working capital and also an exposure to the potential upside of tokens held such as BAL. There’s also the possibility of using these tokens for governance issues that relate to mStable assets. @james.simpson can this be part of the Association’s financial planning?

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For the record I do think having this redundancy would be a good thing and I’m not one of those people who thinks it’s ridiculous for the CEOs of non-profits to be well paid. If they can justify their pay by the value they produce for the community/cause then by all means… I’m just seeking to understand the facts. It would also be nice to understand the pay structure and if you’re further incentivized with MTA allocations. What’s different here from many other non-profits is you have incentive for mStable to do well and I’d like to ensure that continues while also being reasonably paid in fiat for your hard work.

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Hey @DefinitelyNotAWizard for the record 0% of the association’s allocated MTA will go to me as CEO or to anyone else at the association. Fiat pay is still TBD but would be in line with market for this type of role. The MTA would only be used to bring on strategic partners and help build mStable by being used for grants and/or fundraising (i.e. bringing on strategic partners to the project)

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Hey @james.lefrere - thanks for the comment. I think it may make sense for the association to hold some strategic amount of BAL and perhaps other DeFi tokens.

I think the association would be open to a portion of the grant being in BAL and some in USD. The request is to have some workable amount of USD as that will be needed to cover operational expenses and to deploy as the association’s first grants

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I like this idea too @james.lefrere. I’d like to think that advocacy for mStable as a protocol would be one of the things the association did from time to time, and having a say in other protocol’s decision-making via strategic ownership of their governance tokens would be an interesting angle that could grow in relevance over the long term.

The funding request amounts also make sense to me. We want a long term redundancy to ensure that the mStable ecosystem as a whole can be funded regardless of whatever broader macro or crypto market volatility there is.

As an mStableDAO signer, I trust James S to responsibly and dutifully carry out the role as CEO in Switzerland, and look forward to the next stage of decentralisation that the funding of this Association will bring to mStable more broadly.

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I think this is a great idea. These are the type of actions that will ensure project longevity and incentivize innovative teams and developers to join the ecosystem.

I have full trust in @james.simpson to operate the association and look forward to supporting the grant recipients in the future!

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I think this type of initiative is completely needed to ensure the ongoing development and success of mStable in the long-run. Over the last 12 months we have seen that within the defi space that projects who do not have a strong governance structures and ability to retain talent have struggled to retain and grow TVL and mindshare.

Essentially the grants are an investment into the platform and that added ROI should result in greater value capture to $MTA. Am happy to support this proposal.

Grant

1 Like