PDP17 mUSD AMM Upgrade

Posted by a member of the mStable ProtocolDAO


It has been proposed to change mUSD from using the existing constant sum AMM with 1:1 swaps and max weights to a StableSwap implementation (outlined in MIP-8) as is live already for mBTC. As with mBTC, this upgrade would see the application of the StableSwap invariant developed by Curve, building on their work but with an implementation built from scratch for mStable’s context.

This upgrade will require a subsequent discussion and vote on the composition of the new mUSD basket. It will not affect imUSD or associated Save functionality.

This is being proposed to improve the composability and provide guaranteed liquidity for underlying USD stablecoins, whilst also opening up the design space for “feeder pools” as was detailed in this forum post and this MIP.

This forum post is for discussion of whether the change to mUSD should be implemented or not. All discussion of subsequent choices of assets for the new mUSD basket and feeder pool asset choices should be held in the dedicated post seperate to this one.

Next steps

Pending no significant changes to its content, this proposal will be taken to snapshot vote in 24 hours. Voting will be open for a 5 day window to give adequate time for a concurrent discussion. Governors can change their vote at anytime 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.