Summary
This RFC focuses on merging the Idle DAO and mStable DAO and ecosystems while preserving stakeholders, partners, and products on both sides. The goal is to leverage existing resources and amplify potential outcomes.
When analyzing the future path forward for mStable, it becomes clear that the challenges faced by mStable can be countered by each other’s strengths. This synergy will result in a powerful yield aggregator and optimization protocol. The proposal was designed by Idle Leagues, contributors to Idle DAO, to showcase the benefits of merging the protocols. The merger will breathe new life into our shared mission of becoming the biggest yield aggregator and optimization protocol, by bringing us together to work towards this common goal.
We designed a path for product and governance continuity, along with the potential for team inclusion. The synergy will take place in the form of a token swap, allowing MTA holders to receive IDLE tokens in proportion to their mStable protocol ownership. The proposal aims to streamline efforts, increase productivity, and achieve common objectives more effectively.
About Idle
At Idle DAO, we’re building the most advanced suite of products to leverage the full potential of DeFi, from automating and aggregating sophisticated yield strategies with Best Yield Vaults to on-chain risk diversification with Yield Tranches.
Over the past years, we’ve achieved significant growth and have reached a peak of $300M TVL in our product suite. While the market has experienced fluctuations, we remain committed to delivering innovative and reliable DeFi products to our users. Currently, we’re sitting at $60M 6-months avg TVL and are working closely with integration partners like Shapeshift, Swissborg, Balancer, Harvest and Spool.
Motivation
Product Vision
We consider the merger proposal between Idle DAO and mStable DAO as a groundbreaking opportunity to create a more robust ecosystem for the benefit of users and tokenholders.
By merging the two DAOs and their relative product suites, the resulting offering will provide a more comprehensive suite of DeFi services, including automated yield optimization and aggregation, stablecoin management, and asset swapping. A DeFi prime brokerage, open to anyone.
Moreover, the merger will lead to a stronger community and governance structure, with more resources and expertise to drive innovation and growth.
This merger proposal represents a major step forward for the DeFi space, showcasing the potential for collaboration and integration among decentralized platforms. As the DeFi ecosystem continues to expand and consolidate, the merger of Idle DAO and mStable DAO will be a major force driving the sector’s evolution and advancement.
Product Transition Plan
Looking ahead to the future, it is evident that there is significant convergence in the product and development goals of Idle and mStable, especially with respect to their yield strategies. This indicates a shared vision and a high level of synergy between the two teams. While this convergence can sometimes result in duplicated work and reduced efficiency, it also presents a unique opportunity to consolidate our development teams and leverage our combined strengths. By doing so, we can streamline our efforts, increase our productivity, and more effectively achieve our common objectives.
mStable core devs can focus on MetaVaults, Idle can offer additional security, peer review, audits, and integration within the Yield Tranches as a way to add risk diversification features and within the Best Yield Vaults as an additional layer of abstraction for users.
This product merge can potentially take place in a highly efficient manner with fairly reduced technical resources, as both Idle and mStable infrastructures are ERC-4626 compatible.
As the above diagram shows, our product suite envisions a powerful synergy between Best Yield Vaults and Yield Tranches, delivering superior yield optimization and risk management services for both integrators and sophisticated users alike. With Best Yield Vaults, integrators can effortlessly access the best DeFi yields without the hassle of managing multiple protocols, ensuring maximum efficiency and profitability. Meanwhile, Yield Tranches offer advanced yield optimization strategies that allow sophisticated users to customize their risk/reward ratio for their yield portfolio.
Our team has been dedicated to delivering on our product vision since the release of Yield Tranches in Jan 2022, we’ve been announcing multiple product synergies & integration with underlying protocols like Lido, Euler, Morpho, and Clearpool, and we have been recently announcing the launch of the first iteration of our Senior & Junior Best Yield Vaults.
MetaVaults would fit well as underlying yield source (in the AMM yield category first, and then potentially scaling into other yield categories), starting from Yield Tranches and then flowing to Best Yield Vaults to scale up the TVL potential of the product suite. Additionally, as we move forward with the merger of Idle and mStable, we’re open to considering the expansion and improvement of the mUSD infrastructure to bring in more collaterals and use cases. This will further strengthen the value proposition of the product suite and provide additional options for our users.
Both the vision and the transition plan can be condensed into the following key points:
- Narrowed down product focus. Idle and mStable to be merged and moved into the idle.finance domain for simpler, streamlined product offering;
- New aggregation vaults. Idle and mStable integrate the code of MetaVaults into Yield Tranches and start the process for a potential Best Yield Vault integration;
- New yield strategies. The mStable team will continue to write strategies for the new vaults, now in a joint effort with Idle development team;
Team Members Transition
At Idle DAO, when thinking about the team, we endorse the importance of constantly pushing the boundaries of what is possible in the DeFi space. This is why we are all committed to continuing to work tirelessly to enhance our product offerings, further optimizing our users’ yield generating potential. We have remained (since 2019), and remain committed to our mission of becoming the premier yield aggregator and optimization protocol in the DeFi ecosystem, and the release of our Senior & Junior Best Yield Vaults is just another great step in our journey towards achieving this goal.
When it comes to a merger, one of the most critical factors is team transition. We understand that this can be a delicate process and requires careful consideration to ensure that the integration is successful.
At the core of our team transition process is a commitment to evaluate each individual team member to determine if there is a substantial fit with our culture, team chemistry, and product vision. While we are open to exploring all possibilities for a successful transition, we want to ensure that we are building a team that is aligned with our goals and values.
In general, team members who demonstrate a compelling inclination to build out yield strategies and have a proven track record of creating great UI/UX around them are on the right path for the transition. These individuals bring valuable expertise and knowledge to the table, and we recognize the value they can bring to our platform.
However, we also recognize that successful integration requires more than just technical skills. We are committed to building a team that works well together, shares a common vision, and is dedicated to achieving our shared goals. This means evaluating each team member’s fit with our culture and values, as well as their ability to collaborate and communicate effectively with others.
We believe that the organization chart of both DAOs is assimilable, and we see a clear path to creating a structure that works for both teams. Specifically, we envision a structure with three core areas of focus: Growth, Development, and Communication.
The Growth team would be responsible for driving partnerships and user onboarding, leveraging the strengths of both Idle DAO and mStable DAO to build a robust and engaged user base. This team would be focused on identifying new opportunities for growth, building relationships with key partners, and driving user acquisition and engagement.
The Development team would be responsible for product development and yield strategies. This team would leverage the technical expertise and knowledge of both teams to build a comprehensive suite of DeFi services. The Development team would be responsible for driving innovation and ensuring that the platform is always at the cutting edge of the DeFi yield space.
Finally, the Communication team would be responsible for managing both online and offline channels to promote the platform and engage with users. This team would be focused on creating compelling content and leveraging social media, PR, and other channels to build brand awareness and drive user engagement.
We believe that this structure makes sense for both teams, and would allow us to leverage the strengths of each DAO to create a powerful and unified platform.
Ultimately, our team transition process is designed to create a smooth and successful integration that benefits all parties involved. We are committed to working closely with team members to ensure that they are comfortable with the transition process and have a clear understanding of our product vision and goals. We believe that by building a strong and dedicated team, we can achieve our shared goal of creating a powerful and accessible platform for yield generation and optimization.
Nature of Offer
The nature of the offer involves a token swap from MTA to IDLE. This will result in the transfer of mStable treasury assets to the Idle DAO, as well as the aforementioned transition of product focus, team migration, and consolidation of the respective product suites into a single one. As part of this offer, MTA token holders will receive:
- A fixed allocation of IDLE tokens subject to a short-term vesting schedule
- A KPI option to unlock an additional allocation of IDLE tokens based on the achievement of certain performance milestones.
It’s worth noting that the KPI option serves as a performance-based tool that aligns the goals of the community and the team, providing a premium and potential further growth to a successful collaboration.
In addition, MTA token holders will retain the opportunity to swap their MTA for mStable treasury assets for a pre-determined period of time, at a fixed rate using a fixed eligible supply (i.e. circulating supply). In this way, those interested in leaving the project maintain the possibility to exit with a mechanism similar to what mStable will decide in [RFC] Future of mStable Treasury Assets.
Idle DAO currently manages 4 million IDLE tokens, representing 30% of the total supply. The proposed token swap would involve a substantial amount of tokens and could have a significant impact on the future of Idle DAO.
More details regarding the exact figures of the deal will be provided in the MIP related to this proposal if this RFC will be positively welcomed by mStable DAO.
MTA token holders would have the opportunity to maintain exposure to a project that boasts a high degree of innovation, deep technical expertise, and a mission-driven team with years of experience.
It’s important to note that while we’re excited about the potential of this merger, the offer is pending a vote by Idle DAO governance. We’re committed to transparency and will keep both communities informed throughout the process.
