✖️[RFC] Elastic Finance Purchase


After this successful temperature check, I suggest to diversify the mStable Treasury with a small allocation of tokens in the Elastic Finance stack in order to gain exposure to this financial primitive, and hedge against the risk of missing out if they become a global standard in the ecosystem and beyond in the coming months and years.


Rebasing tokens have long been a great way to get heated discussions started around their elastic nature, and have caused a great controversy in the market as to their use-case, usability, and ponzinomic nature.

Currently, there exist only two tried-and-tested rebasing token projects that also represent a financial primitive in the space, the first one being Ampleforth (the grand-daddy of them all) and the second one being OlympusDAO.

Both of these protocols take a completely different stance on the underlying issue, and both protocols wish to create a base layer reserve currency for the world, AMPL and OHM.

Further information around both projects and Elastic Finance in general can be found here and here respectively. Finematics has also released a great primer on Ampleforth and OlympusDAO.

In my opinion, both primitives can succeed in the future, although currently OlympusDAO has the bigger following and overall support from the ecosystem, so I would suggest to allocate more heavily into OHM at the moment.

I was thinking of an initial amount of around 100,000 mUSD worth of tokens to be bought at an opportune time on the open market, split into 75% OHM and 25% AMPL.

Both tokens can then be further utilized by the DAO, and I would suggest to stake OHM directly on their website, and put the AMPL allocation on Aave.

Funding would be handled differently for each token: OHM would be purchased directly from the OlympusDAO via MTA bonds, adding MTA to their treasury, whereas AMPL would be purchased with DAI currently held by the Asset Management subDAO.


Our treasury still arguably has too heavy of an allocation in native MTA, and we’re dreadfully underexposed to the rest of the DeFi ecosystem and the different financial primitives these protocols have on offer.

We’re slowly rectifying this issue, though, and I hope that by owning a small portion of the Elastic Finance stack, we can focus our other liquidity endeavours to more exciting things in the future, without needing to visit this primitive again in quite some time, while enjoying the exposure and big upside these assets offer.


  • Diversify the treasury with a very bleeding edge technology stack
  • Expose MTA to the OlympusDAO treasury for visibility & for taking them effectively out of circulation, thus benefitting MTA holders in a similar way that our Buyback & Make pool does
  • Open a lending side on Aave, which could become collateral for borrowing in the future (tho we would want a much more diversified allocation first once that happens)


  • It’s a controversial stack, and many battles have and will be fought over the usability of elastic finance
  • Very high volatility is to be expected when entering the rebasing territory

Next Steps

It is suggested that the community comment on this RFC in the coming days, and bearing no significant opposition or change in ideation, we would move ahead with this RFC in the coming weeks 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.

Thanks mZeroNine for this request for comments.

I wanted to bump this up.

I feel that with the recent market correction, for projects such as Olympus, this is an opportune time to buy (or do a DAO-to-DAO swap) for some OHM. Olympus in particular having a well diversified balance sheet is a nice addition to the mStable Asset Management subDAO at current valuations. I am open to consider other projects too but wanted to call out Olympus specifically here (trading at a ~600M market cap, relative to $4B+ previous market cap before correction).

As called out above in the motivation by mZeroNine, most of the treasury today is in MTA and introducing some diversity into that would help with NAV growth over time while reducing depending solely on he price of MTA. This NAV growth is critical for maintaining/funding ongoing core contributor operations moving forward. Since this growth is critical, I believe that we do want to consider relying on other assets in addition to MTA and the current positions in the AM subDAO. It’s worth noting that gOHM in particular could be used to earn yield without selling it via numerous strategies.

From what I’ve seen from Zeus (Olympus founder), when you stand by Olympus at a time where others are less confident, he has also been willing to help and shine a positive light on a given project and even open to further collaboration. This buy could be considered as standing by Olympus though that is only my interpretation. This avenue of further value beyond the swap/buy itself is something good for the business development & growth team to explore.

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At this stage, I see a diversification in OHM as a +ev move. In favor.

AMPL, I am neutral on.

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Thanks a lot for the feedback gentlemen, and happy to pick this up once again.

If we could get one or two more feedbacks here, it’ll be enough to move forward. I concur with the sentiment above that after the huge selloff of OHM and the overall low marketcap of AMPL right now, this seems like a good as time as any to get into this primitive.

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OHM is on sale and I feel still has excellent fundamentals. It didn’t go below the backed value at any point (that I’m aware of). Even if it does in the future, they added the inverse bonding mechanism. I don’t know anything about Elastic, and like OliJ I’m neutral on Ampleforth.

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Going to have a bit of a different opinion and I would say that I don’t think our need currently is to diversify more. We should be focusing more on the Treasury being sustainable enough to support mStable development in the coming future. This would put risk into the Treasury, the upside could be there, but I rather focus on the upside within mStable.

Fair points, though my small argument (you know I love debating with you!) would be that OHM (and AMPL, but hard to put a comparison there) have both seen upside higher at what MTA has achieved so far, so maybe more likely to see these numbers again, and especially OHM would effectively give us a share of their massive underlying treasury, which seems like a long-term safe allocation and bet to make.

We’re also able to get this upside exposure via putting MTA into said treasury, so one could go as far as to say that we’re effectively not selling off MTA or betting against the upside of MTA, but adding it to the OHM treasury share, which will only appreciate as MTA appreciates :wink:

Great discussion.

In my opinion, I see this proposal is part of a holistic strategy for the treasury, since core contributor salaries are not paid only in MTA. Moving forward with this small swap isn’t in conflict with focusing on mStable from a treasury standpoint.

From a treasury standpoint you have:

  1. influencing the policy of how protocol earned revenue is shared back with the treasury (there is already a post on this one)

  2. fundraising - selling MTA with various terms in exchange for mUSD (there is already a post about this too)

  3. managing the assets the treasury holds to generate more income (this post is about this, and actually just a portion of it)

If the goal is sustainability to fund operations, it is risky to lean on just one of the above, especially with current runway. Further, leaning into #3 doesn’t negate much from #1. In what way is buying/swapping a small amount of MTA or DAI for gOHM eroding value from mStable?

It’s also worth noting that if you look at other treasuries, you often see much larger stablecoin, ETH holdings, and non-project coins (i.e. non MTA for this project) which isn’t the case for mStable.

Finally, since this is a small amount, we should all be aware that this step alone isn’t going to get the asset management subDAO to meeting its objectives alone, however, I do believe it is a step in the right direction.

Agreed. Also I believe gOHM can be used as collateral for various strategies. There are more options for framing and growth, even while waiting for potential appreciation.