mStable’s SAVE remains one of the most accessible, reliable and high-yielding products in DeFi. Elements of it’s design however limit the ability for it to be integrated across the broader DeFi ecosystem.
We propose it be reconfigured to enhance the capital efficiency it offers to SAVE depositors and enable it to more easily be integrated into other DeFi, and CeFi, platforms.
Currently depositors in SAVE have their deposit, and accrued interest, assigned against their specific Ether address – unlike liquidity providers to AMMs (eg. Uniswap) and lending platforms (eg Aave) they do not receive a token representing their assets.
What difference does this make?
The provision of a token representing a liquidity provider or lender’s capital makes that capital composable. The token can be used as proof of the deposit and therefore as collateral on other platforms increasing the potential returns earned by that capital. This would increase the efficiency of capital allocated to SAVE and, all else being equal, should increase demand for the product. Composability allows collateral on one DeFi platform to be used on another which also enhances the original platforms integration across the DeFi ecosystem.
We propose adding composability to mStable’s SAVE product to enhance its functionality, improve the potential capital efficiency for depositers in SAVE and increase SAVE’s potential integration across the DeFi ecosystem. Given the yield that SAVE offers, we believe a SAVE LP token would be an attractive form of collateral on CeFi and DeFi trading platforms as well as opening up a number of novel, yield producing strategies that could potentially see SAVE used in trading strategy platforms such as Yearn Vaults and Harvest.
Note the implementation of this change would require the existing SAVE contract be closed – current SAVErs would have to migrate their deposits to the new SAVE contract over time.