✅ [RFC] Stop COMP & stkAAVE Liquidations


This RFC would like to see feedback regarding the current workflow of regularly liquidating 100% of all earned COMP and stkAAVE rewards from platform deposits for Save users and changing this process to stop this current routine and instead reroute rewards to the TreasuryDAO for Asset Management and diversification purposes.


In line with the current overhaul of protocol sustainability for 2022 and beyond, we ought to now look at the current process & efficiency of continuously liquidating accrued COMP & stkAAVE from the contracts in order to boost the yield of save users.

We’re often spending more than 10% of the total value of these tokens in gas fees to complete the operation, which is not sustainable in the long-term, and yields only marginal improvements for Save users, which is neither efficient nor retaining value in the DAO moving forward.

The entire token liquidation process currently happens manually, so changing this workflow is extremely simple, and further down the line could be automated completely, as it will no longer involve the queuing up of transactions via Flashbots to protect from Sandwich Attacks.

It is suggested to retain all stkAAVE in the Asset Management subDAO for the time being, and accumulate COMP until it is economically feasible to deposit them into Compound Finance or use otherwise as the Meta Governors see fit.

In regards to the claiming operation, this can be done once per quarter to minimize transaction and fee overhead.


Since the inception of Save, we’re continually liquidating all platform rewards from Compound & Aave to boost Save users’ returns. Over time, this has continuously given less and less additional yield to savers, while increasing gas costs for the protocol, as can be seen in the provided links.

Additional discussions around this very topic have already happened twice in the forums, and I believe the time is ripe to take actionable steps and instead reroute all platform rewards to the TreasuryDAO in order to secure a long-term stake in the protocols mStable utilizes for their own product, all the while saving the Treasury thousands of mUSD worth of gas in the process.

Once the treasury starts accumulating these tokens, we can use the additional yield generated to benefit the mStable ecosystem via compounding or other means of increasing value for all MTA holders sustainably in the long run, as well as ensure that we have a say in the platforms we ourselves depend upon.

This will increase the value of the protocol and consequently for MTA holders. We are in a sense exchanging platform rewards for MTA. Savers get MTA and we get COMP and stkAAVE. Both win, since savers receive a portion of these earned rewards as a share of the MTA supply, while the treasury isn’t left with nothing.


  • The protocol stops liquidating yield-bearing assets and the opportunities coming with them
  • Big gas savings in perpetuity (The protocol currently burns around 1 ETH weekly)
  • Look at the long-term success of mStable instead of short-term gains
  • Retain governance rights for the protocols mStable directly uses for Save
  • Take advantage of the huge upside of owning a part of Compound & Aave moving forward


  • Marginally dilute Save users

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.


In June of 2021 we were liquidating $20k worth COMP tokens at a price of $330/COMP to boost SAVE rate at ~4%. The last COMP liquidation was a total of 20 COMP liquidated at a price of $188/COMP, totaling to a value of ~$3600.

I don’t have the formula in front of me for inputting $ value deposited to get the total save rate increase, but I have to imagine liquidating $3k worth of COMP every week is doing very little to move the needle for our SAVERs.

100% I’m in agreement that instead of passing on what is arguably nominal value, we should instead start stacking these “worthless gov token” to grow our treasury - especially in preparation for the market to return…one day.


I support not liquidating the COMP and stkAAVE.

Below is the COMP and stkAAVE liquidated from mUSD holdings in Compound and Aave. The last two weekly COMP liquidations raised less than 4k USD. The current COMP liquidation will raise less than 2.5k USD for a week worth of accruals. That’s less than 0.35 APY on the Savers (imUSD) deposits.
The next stkAAVE liquidation for a 10 day period will be less than 6k USD. That’s less than 0.58 APY of the Savers (imUSD) deposits.

Source Dune Analytics

Below is the stkAAVE liquidated from WBTC in mBTC. The last stkAAVE liquidation for mBTC raise less money than the gas costs to execute.

Source Dune Analytics


Pretty much my opinion. We give away MTA rewards but the MTA underlying value that is accruing gets liquidated. Let’s collect gov tokens so we as a protocol have also some share in their success and protect ourselves as well. We should have some representation in the protocols that we use ourselves.


Given how low the benefit is on the liquidations, I think this is a pretty easy ‘yes’ from me.

I think (were it up to me) that I would acquire CVX rather than sitting on the two tokens.


I fully agree and share the same thoughts.

Just adding one more thought:

We will likely get lower incentive for the mUSD3CRV Pool, which will increase Save utilization and lower APY. Stopping the liquidation is yet another factor that would decrease Yield. And on top of that, you also proposed in another RFC to increase governance fees.

This all happens while we have a quiet market, and Aave v2 interest rates are hovering around 2% - 4%. We would likely see after all this a single-digit APY for Save again.

How attached are we to having the best yield for your stables?

Currently around 4.6%

Thanks everyone for the great input! I will be moving this to a formal TDP this week and post it here today or tomorrow.

This assumes that all Savers will stay in Save, which is unlikely as Save rate goes down, and some equilibrium would most likely be found, no?

Also, the other RFC doesn’t propose to increase governance fees, it proposes to reroute Governance Fees from stakers to the protocol, so no harm done there :))

I personally doubt very much that less than half a percent increase in yield for Save users once or twice a month will result in much difference of retention, don’t you think?

I think the correct question here would be: How attached are we to having the best yield for stables in perpetuity and the long-term?

Once again, we would be sacrificing long-term sustainability for short-term results to patch the issue away on the front, while still leaking tokens in the back. I am strongly against this personally, and think we can fix this issue in other ways in the future.

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This is a sound proposal in many ways. The only item that I would add is a management strategy like using a TWAP and apply a rule of if the price exceeds 4x over 2 month TWAP to sell 25% of the treasury of said assets. (Potentially also use 40% of the revenue from said sale to 3x short said asset on Tracer.) Once the price dips 25% below sale price then close short and rebuy. I know this type of practice is difficult and expensive to implement on chain but acquiring governance tokens is a good long term strategy as is maximizing returns denominated in governance tokens by taking advantage of the short term volatility found in crypto. Worst case scenario the 75% of assets held just continue to go up in value and the stables earned can be used to farm CVX and boost revenues for mSavers.

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Thanks a lot for this, definitely going to see about strategizing on the bag once the proposal passes, and happy to put heads together then!

In the meantime, there has been enough feedback provided here, and will be handing this off to the dev team for further crafting, and then come up with a MIP once ready! :sunglasses:


Hi everyone,

During the creation of the MIP we realized that the Aave platform rewards on Polygon come in form of MATIC tokens instead of stkAAVE, so we would like to gather additional feedback around this.

Currently, all accrued MATIC platform rewards get liquidated for Save users on Polygon to boost their APY.

I would suggest we treat the MATIC liquidations on Polygon at a later stage, as they make up quite a considerable amount of rewards for Save users, and cross this bridge once a more sustainable yield on Polygon is possible without the help of liquidating platform rewards.


Seems perfectly reasonable in that case.

Excellent! This RFC has now been turned into a MIP, thanks a lot everyone for voicing your opinions here, and stoked to see this moving forward!

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