PDP 32: Add mUSD/RAI Feeder Pool

Posted on behalf of the mStable ProtocolDAO.

Big thanks to @stefan and Reflexer Labs for initiating the bounty and this proposal.

Simple Summary

It is proposed to add an mUSD/RAI Feeder Pool as specified in MIP 9. RAI is a non-USD pegged stablecoin. This Feeder Pool would be the first of its kind since it allows to swap two stable assets that are not same-priced and offer efficient swaps with a Feeder Pool.

Abstract

The Reflexer community adapted the mStable Feeder Pool code to handle a non-pegged stablecoin like RAI. This change adapts the feeder contracts to handle RAI by keeping the mechanism used to adjust the precision of fAssets but updating the ratio whenever it’s used rather than only setting it during initialisation. The updates are performed by reading RAIs redemption price and using it as a scaling factor on the original ratio set by the precision.

Furthermore, due to the new custom Feeder Pool mechanism, it is proposed to deploy this in a guarded launch. To reduce the demand, the MTA incentives will be caped for the first few weeks. Starting with a max amount of 1000 MTA for the first week and doubling every week until the MTA amount is fully accounted for that would be allocated under the distribution scheme with MCCP 4 and MCCP 10.

Motivation

The Reflexer community adapted the mStable Feeder Pool code to handle a non-pegged stablecoin like RAI. This change adapts the feeder contracts to handle RAI by keeping the mechanism used to adjust the precision of fAssets but updating the ratio whenever it’s used rather than only setting it during initialisation. The updates are performed by reading RAIs redemption price and using it as a scaling factor on the original ratio set by the precision.

Furthermore, due to the new custom Feeder Pool mechanism, it is proposed to deploy this in a guarded launch. To reduce the demand, the MTA incentives will be caped for the first few weeks. Starting with a max amount of 1000 MTA for the first week and doubling every week until the MTA amount is fully accounted for that would be allocated under the distribution scheme with MCCP 4 and MCCP 10.

Next Steps

Pending no significant changes to its content, this proposal will be taken to snapshot vote on Monday, 18th October 2021. Voting will be open for a 5 days window to give adequate time for a concurrent discussion. Governors can change their vote at any time should the discussion sway their decision. We look forward to hearing what MTA token holders have to say and seeing how they cast their votes.

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Vote is live: Snapshot