✅ [RFC] DAO<>DAO Swap - Balancer


It is proposed to discuss today a DAO<>DAO swap opportunity with Balancer Finance, arising from the upcoming launch of mStable’s Emission Controller.

A suggested amount of 20k BAL (around $400k, using the token price at the time the vote ends for both tokens or the 7-days VWAP or the 30-days VWAP) is to be considered for this swap, which could then be subsequently put to use in the DeFi ecosystem for asset management opportunities. Balancer would use the MTA to vote for their pools in the mStable governance system.


mStable is about to release its version of the Gauge controller, inspired from Curve’s, which will dictate rewards distribution over the next 6 years (~30m MTA).

As we speak, two Balancer pools are receiving MTA rewards:

Balancer & mStable have been maintaining a long-standing relationship: mStable was one of the first user of Balancer in August 2020 and had the biggest pool at some point there.

It is thought that it would be highly mutually beneficial for the Balancer and mStable Treasury DAOs to perform a DAO<>DAO token swap:

  • mStable would get exposure to a blue-chip DeFi project as well as diversify its treasury. Moreover, BAL has strong utility within the DeFI ecosytem: mStable could opt to leverage them in several ways.
  • Balancer would get a MTA position and could vote for their pools with the Emission Controller. Balancer would then direct higher rewards that will inevitably attract more liquidity (i.e Total Value Locked) to its pools.
  • Both protocols could choose to stake the exchanged tokens. They would be then eligible for subsequent boosts in rewards


DAO<>DAO swaps are very strong market signals and often represent significant amounts of $$$: Balancer recently swapped $9m worth of BAL with FEI.

Therefore, we think swapping between $300k and 400k worth of MTA against the equivalent USD value of BAL is an amount that would reflect both the longstanding relationship mStable has with Balancer and the strong optimism felt towards the BAL token.

Discussions with Balancer seem to show they would agree on such figures i.e 15-20k BAL at current prices.

Why now?

  • The Convex /Curve way of getting inflation is becoming very competitive and unaffordable. This swap (in the Emission Controller framework) would showcase that it exists a cheap and effective way to make Liquidity Pools more attractive
  • Having Balancer as a lead for the first epochs would send a clear and strong bull signal to the market
  • Balancer swapping MTA against its own token is very likely to hold its position. It would create long-holding use cases for MTA
  • This is an opportunity to go a step further with shared governance as well as a nice way to do a joint marketing campaign highlighting both protocols

Treasury Considerations

The mStable DAO treasury has approximately 5m of liquid MTA thats able to be deployed. It is acknowledged that this DAO<>DAO initiative with the Emission Controller could represent an important share of the current treasury, especially were other partners to also be interested in a swap

It is suggested we could use the Emission Controller to redirect inflation rewards back to the mStable DAO Treasury and “reimburse” the total amount allocated for this operation over time. This would require high, weekly coordination within the community and mStable stakeholder group.

Furthermore, we could use the swapped tokens in further asset management opportunities to earn yield and offset the temporary expenditure of tokens.

Timeline, Process & Next Steps

The mStable Emission Controller will be officially launched next Monday.

We don’t want to miss this opportunity nor the momentum of the launch and would hope this token swap could occur before the end of the year.

Please find below the desired timeline.

  • Thursday 2nd of December* → Publication of the RFC
  • Before Friday 3rd of December → Community opinion on the RFC
  • Monday 6th of December → Government proposal vote live on both forums
  • Monday 6th of November → mStable Emission Controller Launches
  • 13th of December → End of both proposal vote, hopefully, successful
  • From Dec 13th onward → Tokens can be swapped on-chain

It is suggested that the community comment on this RFC in the next days, and bearing no significant opposition or change in ideation, we would move ahead with this RFC on tomorrow and create a formal draft proposal on Github to be used for review.

Meta Governors are encouraged to provide as much feedback as possible until then, so we can create the best possible outcome for mStable and its users.

We know this is quite an aggressive timeline but we think moving fast with governance could give mStable a lead partner for its Emission Controller launch and Balancer an actual attractive position on the first emission epochs.


Balancer is a strong partner for mStable and has been supporting and co-incentivising our pools since inception. Giving Balancer the chance to participate in the upcoming gauges is also a strong signal to the viability of the system. I don’t see any downside. At this point, Balancer is a core piece of infrastructure of the DeFi ecosystem.

I am, however, a bit worried about the proposed pipeline. We usually like to give a sufficient amount of time for everyone to chime in and have enough time to think it through. If we were to follow this fast pace process, I would love to see everyone taking notice and chiming in. An overwhelmingly positive feedback from the community and core would legitimize the expedited timeline.


My only qualm, is that there is no one sided use for BAL. For MTA, you can one sided stake and earn 27.5% APY in MTA and have voting power for emissions. Unless the use cases of BAL change just receiving BAL will just be sitting. I’d rather have 80:20 BAL:ETH which is currently receiving BAL rewards. We currently have $10k USD of BAL just sitting around already.


Interesting proposal. I have worked with both Balancer and mStable teams. And, I fully support this DAO<>DAO token swap because balancer is a great protocol with a great team. Diversification of the treasury with such a great protocol in the ecosystem will be very beneficial for mStable in the long run.

In terms of timeline, I agree with @Dimsome that there should be sufficient time given to everyone to join the discussion.


I fully support this proposal, and think there is great merit from this dual-sided venture.

BAL can always be provided as collateral on Aave or a Rari Fuse Pool to make it useful, and I’d say that beginning our journey to low leverage ventures for the treasury is something we should consider anyways, so this could be a great starting point for doing so.

Eager to see this move forward, and stoked that we got Balancer to spearhead this swap initiative as lead partner.


To me there is a considerable difference in 27% APY in MTA plus emissions voting power vs 0.4% APY in AAVE (0.98% bonus in stkAAVE).

That is very true. Probably will need to find the only alternative in Balancer being ok in us single-sidedly entering the 80/20 BAL pool then if we’re focused on yield and governance participation.

If we follow the “bullish MTA” narrative, we could be as well off, or better, by leveraging the BAL on Aave, taking out a stablecoin loan, and then swapping them for MTA.

For the sake of the current RFC, we should delay these discussions to the thread that will concern itself with the utilization of the acquired BAL tokens, as we’ll first need to ratify this proposal :grin:.

To check on feasibility, this is a great point though, and we should definitely know what we’re allowed to do with them prior to the vote, nice catch!

Interesting idea, would this swap work: 80/20 MTA/WETH BPT <> 80/20 BAL/WETH

@TClochard @mZeroNine ?


@TClochard great initiative :clap:

1 Like

@TClochard this is an absolutely great initiative and perfect way to show the power of the new Emissions Controller.

Balancer has been a long term friend of mStable since the early days, when mUSD had a significant market on Balancer v1. We’ve continued to work together, now with the Polygon MTA market.

For mStable I think this is a great way to get a leading AMM on as a treasury partner, and to also diversify our treasury. For Balancer I think its a no brainer as the power this amount of MTA would yield currently would enable at least that amount of value to be given back to users on Balancer.

Looking forward to voting in favour of this proposal


I am in full support of this proposal. I can understand @Jeshli 's concerns around the lack of single-sided liquidity for BAL and it would be worth exploring whether receiving 80:20 BAL/ETH could be an option, or at least checking if Balancer are ok with us entering that pool with only BAL. However, given that MTA in the treasury is not earning yield currently, the opportunity cost to mStable is lower and I think the benefits of this partnership would be significant.


Huge thanks to Theo, mZeroNine, and Jwpe for working on this partnership with Balancer and doing so under a constrained timeline to align well with the release of the MTA emission controller. I can say that in reviewing the thread on Balancer, mStable came across as professional, collaborative, and truly wanting to find a win-win arrangement. I feel this kind of approach will also serve mStable well in the future and wanted to give credit here.

I am in support of this proposal for the following reasons:

  • Balancer is well respected and a key project in DeFi. It would benefit mStable to have Balancer be vested mStable’s success. That could lead to further alignment even beyond the friendship that James mentioned.
  • The Asset Management subDAO would benefit from opportunities to diversify it’s holdings without depressing the MTA price in the process. A token swap accomplishes that. I like that it was directly called out that MTA & BAL should not be sold within the first year.
  • +1 to James’ point on showcasing the power of the new MTA emissions controller as it gets introduced.

Looking ahead at potentially expanding this to more partners who would want to participate in the emissions controller vote. Some natural partners for this type of DAO/DAO swap arrangement are any of feeder pool partners (ALCX, FXS, etc.). We can discuss that at a dedicated thread when appropriate.

Thanks again for all the great work with Balancer on this.