✅ [RFC] The Future Path Forward for mStable

Dear mStable community,

I’m writing to signal that I will be leaving my core-contributor role, ideally at the end of March, subject to discussions that I’ll have here and with other core-contributors. Currently, I manage the Strategy and Operations leads of the builder subDAO, so a discussion will need to be had about filling that role. For those that don’t know, I was a co-founder of mStable.

mStable is dear to me and have put a huge amount of myself into it over the past several years. It’s been a remarkable journey and I have learned so much. There have been times of victory and times of loss; each have come with its own lessons.

mStable was one of the first protocols to market and we were backed by some great investors and some that turned out to be less good and went bust. The DAO is one of the most decentralised and built a governance structure early on. The protocol initially had a huge amount of traction and was a serious competitor to Curve.

Certainly, mStable has been hit hard by its fair share of challenges: after the project getting a decent amount of traction, a growth ceiling was reached quite rapidly. The mStable community felt that a v2 protocol had to be built. When this was decided, a lot of the previous core contributors left and many new core contributors were hired. The Meta Vault product was then spec’d and built last year. It only recently launched.

Team and product were the two main challenges at the start of 2022. Personally, I am very proud to see the DAO rebuild the team and build an entirely new product; core contributors faced into these challenges head-on. Unfortunately, however, these efforts haven’t improved the situation for MTA holders or the DAO’s sustainability. The DAO’s structural issues (stemming from the MTA token) just got worse and worse last year. Of course, our sustainability wasn’t helped by three of our major investors going bust. We believe their liquidators had to sell all of their MTA tokens into a weakening and illiquid market.

So the first reason I have decided to leave is because I think there are some pretty serious structural issues in the DAO. To summarise, I think: the project will find it very difficult raise with the current token given its value; the protocol isn’t earning enough from its products to self-sustain; and the DAO’s runway is continuing to decrease each month and will be depleted at current burn within 12 or so months.

Secondly, I am seriously burned out from my many years in crypto. Burn out is real and I’m feeling severely tired and need some time for myself. I know I’m not in the best place personally to fulfil my duties in the Builder subDAO and it’s in the best interest of the project that I communicate this transparently and find a replacement.

As an MTA holder, however, I want to speak up and describe what I think are the three ways forward for this DAO before I leave. I would love us to decide on a route forward before I leave but I also understand if the community just want to keep building for 6 or so months and give Meta Vaults more time to succeed.

Despite that, I still think that the community should discuss these options:

  1. An acquisition from a DeFi project
    This could give MTA holders either a potential premium on the face value of Treasury Assets and a potential upside in case of a native token swap.
  2. A full shutdown of the project
    Should an acquisition not work, a shutdown could be considered by the community.
  3. Continuing on with a very slim team to extend the runway
    To extend the runway until the next bull market, this option should definitely be considered.

Thanks everyone for everything while I’ve been at the project. Looking forward to feedback.

Thank you very much @james.simpson for detailing your perspectives on what you think is best for MTA holders as well as proposing potential ways forward. Thank you also for your time at mStable. I am grateful to have worked with you in the Builder Sub DAO
Brief context, I am a core contributor to the mStable DAO. I have worked for the Builder Sub DAO as Strategy Lead for the past 16 months. I was part of most of the events described in your post: the departure of V1 team members, the hiring of a new team, V2 ideation, and the V2 launch.

I have to admit, I share the 3 major concerns outlined above:

  1. The project’s difficulty to raise with MTA at its current value
  2. The DAO’s runway depletion at the current burn within 12 months. And after this, the very complex task of incentivizing the team with MTA to continue building
  3. The unrealistic challenge for mStable to reach self-sustainability‹ through its product line within a year

A few points below to give more colour to the situation:

1. Project inability to raise with short runway outlook
mStable has 12 months of runway available in its treasury at the current burn rate ($192k per month).
Over the past 12 months, MTA saw a -95.97% drop (from 18/01/22 to today), catalysed by strong sell pressure.

This selling pressure was driven by 3 of the project’s main investors going insolvent and having to sell their tokens into a very illiquid and weakening market.

It is an unrealistic challenge for mStable DAO to raise with the token at these levels. At the current price ($0.037), and in order to raise another year of runway ($2.28m), the mStable Treasury DAO would need to sell 61,621,621 MTA which is 123% of the current circulating supply and 61% of the total supply.
To date, the mStable Treasury DAO only owns 8,832,585 MTA (14% of the funding need i.e 1.7 months of runway). Even by cutting costs drastically, this would be insufficient without drastic tokenocomic changes which would themselves be ultimately dilutive to MTA holders.

2. Core contributor incentives in an evaporating runway

For the past year, mStable Builder subDAO has been building a small but strong DeFi team. This team was offered token packages at the start of last year that, at current prices, have become meaningless. This could start creating retention problems when the Treasury’s stable assets dwindle.

3. Unrealistic TVL requirements to reach self-sustainability

A few scenarios have been run (taking into account projections on performance fees and the low yield levels). The project would need at least $300m of TVL to sustain its costs with the current product line. If we were to reduce costs by 2/3rds then we would still need to over 5x our TVL at current levels to $100m.

The current TVL of the project sits at $16.15m and the max TVL the project ever reached, in a very different market, was $198.92m in Nov-21.

Closing thoughts
The last 12 months have been hard and I have tried with others in the Builder Sub DAO to make it work and solve these structural issues. It has proven unsuccessful so far given the magnitude of the change required and their likelihood of success.
I am aligned with the three options you outlined, I think the first two are the most realistic to achieve in a timely manner and are the ones that will retain/create the maximal value for MTA holders.

The first one makes sense to me the most (An acquisition from a DeFi project) as it could give MTA holders

  • a potential premium on the face value of Treasury Assets
  • a potential upside in case of a native token swap.
  • a liquid market for the MTA

Basic Feedback:

Thanks for posting this James, and it goes without saying that I am very sad to see that this is the reality the project now seems to be facing, and having dealt with burnout myself through the tenure, I can fully understand the move to come forward and go down this road.

I have a few points to make regarding all of this, in no particular order:

First of all, I have taken the liberty to change the title of the thread, as I feel it more accurately reflects the nature of the circumstance, and it is also an opportunity to turn the existing thread into a RFC for the governance processes that will undoubtedly follow this announcement.

I feel all three options presented are viable in the discussion and present options on how mStable can move forward. Personally, I’d love to see an added clause on the vote that if the winning vote turn out to be not possible for whatever reason, that automatically the option with the highest vote after become the winning vote to avoid redundancy.

I’d love if we were able to split this process up into two separate parts to ease on the governance complexity moving forward:

My advise would be to first vote and agree on the next steps forward by formalizing this RFC, and after consensus and a resolution has been found and voted upon on Snapshot, create a new RFC with the winning vote and structure out and formalize exactly how this vote shall be carried out. This ensures maximum expressiveness in the voting itself, as well as cut down on needless governance and formal written content.

Furthermore, I’d advise to include a clause in this proposal to halt regular governance process such as signer elections, Governance Calls, and subDAO reviews and put them on hold until a final proposal is passed detailing any proposed changes to these processes. This would be done to ensure the integrity of the multisig is retained during this process, as well as put focus and priority on resolving this massive challenge first on chosing the best way forward for mStable.

Also, I must remind the Builder subDAO that the current Funding Request mandates the subDAO to continue their work on the Meta Vaults until a new Funding Request be resolved via Governance. I would advise that the Builder subDAO engage in activities that have net positive outcome for all proposed votes regardless of outcome, so in the next Review Meeting there won’t be any discrepancies. This was already discussed internally as well, and consensus has been found by the developer side on some of these as to not cause a controversy in funding allocation spent.

Regarding the different options presented:

I’d personally be interested in discussing the option of continuing as a skeleton team personally more deeply. Of course one of the main challenges that comes to mind is the governance of mStable in such a scenario and the way the token was issued and is structured. To my knowledge, the majority vote currently lies with the founding team of mStable, so in case of a new team being formed, it would mean that unless an agreement can be found, that the new team will still be subject to need to make governance decisions based on the old teams wishes, which seems counterproductive if the old team is seeing serious structural challenges and is not 100% convinced it can succeed.

To this extent, I’d like to ask or suggest that in case that option wins and a new team be found in due time, tokens that make up the difference to create a majority vote be returned on a voluntary basis back to the mStableDAO treasury, so the new team can truly own the protocol and make decisions that can not be overruled by an outside party, similar to how the current structure is set in place.

Perhaps a buyback of some sort is an alternative solution to this, although this will create a lot of controversy, especially if an overall liquidation is then no longer on the table, so I’d advise against this move and would see the voluntary return as the wholesome approach for everyone involved.

Regarding the option to liquidate, it seems straightforward and I suggest a complete liquidation of all treasury assets, and then a proportional claim on the assets per MTA owned.

Regarding the option to be acquired, I’d love to see the current stance of the Builder subDAO on this topic, and if potential customers or DAOs have been contacted and see the status on such a potential move.

Again, I’m sad to see that it seems no internal agreement has been found to find a smooth transition into either one of the options to be proposed by the entire team.

1 Like

Thanks @TClochard for the data. That was very informative.
@mZeroNine I think it was good to change the title to an RFC, that makes sense. I’m keen to see more mStable stakeholders express an opinion here before anything is elevated. As I said in the post, these are just personal opinions at this stage - however, I do believe it is in the best interest of the DAO to look into them asap so I sincerely hope we get more stakeholder engagement in the coming days

1 Like

Thanks James for your message, it’s always sad to read a team member leaving the project and I feel your sentiment when you talk about burn out, crypto industry is stressful and can turn into something toxic for your person rapidly.

From my perspective, I will not dig into governance process since I joined the team lately, I don’t have voting power and full knowledge of best practices.

I want to share my thoughts on the three options you mentioned.
From product side which is the area I belong to, I think the third option of continuing and extend the runway is something bold but it brings many challenges that a nascent product as Meta Vaults is, cannot afford with limited resources and timeframe.
A new born product needs investments on different areas and iterations to validate a market fit in order to succeed and I think a slim team won’t have capacity to execute the vision the team had for MetaVaults.

The acquisition option seems to me the best approach since we demonstrated as a team the ability to ship a product form zero and create network with the best actors in DeFi industry, I can see benefits for all parts as builders and token holders although the know-how, a potential buyer will acquire, resides in few team members and the full team can be easily disrupted.

About a full shutdown, I think it is something to consider if other options fail in consensus within the DAO.

1 Like

Dear James and the entire mStable community,

It is indeed very sad to see you go, particularly for what it means for the project. As a core contributor for mStable, I have really enjoyed my time so far. It is incredibly exciting to bring a lot of ideas to the table, and it would be a pity to not let mStable live to see them part of a potential roadmap. I am really excited to be contributing for the future of yield, and I would love to continue doing so.

Indeed, bear markets bring challenging times, but looking at the learnings from the previous cycle, all the bull-giants were previous bear-babies. I could think of a way to move forward mStable, reducing the team, reducing salaries, reducing other expenses (such as signers payments), increasing the MTA share of the compensation, prioritising a marketing and bizdev team and restructuring the tokenomics. Our efforts in marketing the Meta Vault, if any, were insufficient since its launch, and it’s a bit heart-breaking to see it go without giving it the possibility of testing the market.

However, just like @malandraj said, I only joined the team 8 months ago, and I don’t feel like making such a proposal is in my place. I don’t own a relevant stake of MTA, you are the co-founder and an important referent within the builder subDAO, so as long as I am part of this subDAO, I will support whatever you propose, as much as I helped building mStable. Wether it’s shutdown or an acquisition by another DeFi project, or crafting and executing a proposal like the one mentioned.

As a final remark, I would like to state that in my opinion, what’s best for MTA holders is to keep building, even if the chances of actually making it are low - and even if I’m excluded from the team that is to build it. Our price is almost on its All Time Low, so even if we let the runway run to zero, the downside is small compared to the potential upside. However, at this point, I only see this possible if there is an unanimous consensus within the community, investors and the builder subDAO that this is the best way moving forward.

1 Like

Thank you James,

I am sorry to hear that you will be leaving your role as a core contributor. Your contributions and dedication to the project over the years have been invaluable, and I appreciate everything that you have done for us.

I understand the concerns you have highlighted regarding the structural issues within the DAO, and I appreciate your transparency in communicating these issues and your suggested options for potential solutions.

Regarding your suggested options for the mStable project - I understand that each option has its own set of advantages and disadvantages. We need to make sure to review and discuss these options thoroughly and consider the best interest of the project and the community before making any decisions.

In particular, your suggestion of an acquisition from a DeFi project presents an interesting opportunity for the project. However, it is important that we evaluate each potential deal thoroughly, ensuring that we have governance input, and have a clear understanding of how such an acquisition would impact the project from a team and product perspective.
Can you provide more information on the potential prospects, progress and any updates on the status of such a deal? And a timeframe of when such a deal is likely to happen? How will the acquisition look like from a Team or Product perspective/transition?
I know that each month that goes by without any such deal is one that lowers the value of MTA.

Regarding the option of continuing on with a very slim team to extend the runway, it is clear that this presents its own set of risks and challenges for the current team and MTA holders. I am unsure to evaluate the chances, especially since we have already deprioritized key positions in the past. Additionally, this approach would likely require cutting back on key initiatives, which could impede the growth and development of the project.

A shutdown of a protocol is never an easy decision and as a Product Manager who has been working on the Meta Vaults since I became Product Manager, it would be incredibly disheartening to see our new product that we’ve been building for so long be shut down, especially given that we only launched our first Meta Vault a few months ago, and more are planned. Despite the hard work and effort put into the development and launch of the Meta Vaults, I understand that the “pretty serious structural issues in the DAO” as you have mentioned, may make this a necessary option to consider.
However, it is important to keep in mind that shutting down the protocol would mean that the potential of the product and its future applications may not be fully realized.

I understand that the mStable project has faced many challenges and that there are multiple options to consider moving forward. I appreciate your leadership and guidance throughout your tenure with the mStable project, and your efforts have been instrumental in shaping the direction of the project.

I hope that we as the builder subDAO, our holders, and community can work together to review and discuss all options thoroughly, considering the best interest of the project and finding a sustainable solution for the future.

Thanks for starting the discussion James. Sad to see you leaving the project. Given recent conversations within the team and also concerns raised within the TreasuryDAO signer group around the projects burn rate and runway, I think it is important to be having this conversation.

To maximise value for MTA holders, it is critical to get clarity on the path forward as soon as possible so I hope we can bring this to a vote in a timely manner and decide on a direction quickly.

I think that the following would make sense as options for a vote:

1/ Continue with the status quo for now, with an expectation that a proposal would be presented to restructure the Builder subDAO to significantly decrease costs moving forward.

2/ Pursue an acquisition of the project for a set time period (say one month) and if a suitable acquisition proposal is not presented within that timeframe, move to a shutdown option.

3/ Move directly to a shutdown of the project to preserve as much value as possible for MTA holders while cleanly closing down mStableDAO and product lines.

I will also add a couple of comments on each option:

1/ I would love to see the team continue to build and market Meta Vaults as I agree that the product has not had time to reach it’s potential. However, this path forward would require strong leadership within the Builder subDAO to execute a bold restructure. In my opinion, this would likely need to involve reducing the team size significantly, sunsetting certain products, slowing new product releases (due to audit costs), and stopping MTA emissions to return MTA to the Treasury. I for one would be happy to have my role in Operations reduced to part time, combined with another role or removed completely if it helped the project to achieve sustainability. In saying that, unless there is an indication of a desire from someone to take on this leadership role, this option seems less feasible.

2/ An acquisition seems like a great way to preserve the value that the mStable team has created and would seemingly be attractive to other protocols as they could potentially trade their native tokens for the assets of mStable, which include a significant stablecoin treasury, with the bonus of receiving IP and potential access to talent from within the team. Of course this is only viable if the right buyer can be found.

3/ This is the least attractive option to me as it seems like a shame to not look for a willing buyer, but I think it should be on the table as an option given the cost of continuing to build and search for a buyer for a period of time.

To @mZeroNine’s point on the current mandate of the Builder subDAO, it is important that any result from a governance vote here gives clarity on what the immediate focus of the Builder subDAO should be. I would suggest that if option 2/ or 3/ win a vote that the Builder subDAO is authorized to shift focus to realising that outcome using the current Builder subDAO funding, with the expectation that a new proposal detailing specific transition costs be presented within a certain timeframe.

2 Likes

As a recent contributor to the project, I am deeply saddened to see the passion and hard work we invested in our product go to waste. Although I understand the challenges the team has faced, I have limited insight on how we can find a solution that works for everyone. Despite this, I am proud to have been a part of such a talented and determined team. Technically, our product is a cutting-edge achievement that we can all be proud of. We accomplished the impressive feat of creating it from scratch and bringing it to the public with an almost entirely new team.
In terms of options, I support any that would allow us to continue developing the product. While an acquisition may be the best option, it also presents its own set of challenges. Ultimately, my vote carries little weight and the decision is out of my hands. I will support any solution that the team can agree on.

2 Likes

@james.simpson Thank you for your leadership and contributions to mStable. It saddens me to see you go, though I wish you success as you move on to other ventures.

Regarding an Acquisition

We should agree on some type of updates or transparency surrounding the efforts towards being acquired by another protocol. It would be helpful to inform the community of what interest (if any) is out there, who we are reaching out to, and what a potential deal could look like based on talks.

Continuing to Build

At the very least, I think a business plan where mStable runs in a much leaner fashion should be put together and considered by the community before any potential shutdown is voted on. It’d really be a shame if Meta Vaults were abandoned a few months after the first one launched and while others are still being developed. If mStable can survive the bear, the protocol could have a suite of products in prime position to take advantage of increasing investment in the sector. Of course, this would require large scale reduction of spending and assumes there are individuals capable and willing to take up the mantle of leadership through this difficult time.

@mzeronine mentioned a key issue if mStable were to continue after @james.simpson departarture, and that is one of voting power. I believe @mZeroNine 's suggestion to return voting power to the DAO is completely necessary so those involved in the project moving forward will have the ability to influence the protocol via governance accordingly. Naturally, this can be achieved a few different ways, whether that’s through some sort of agreement between parties regarding voting rights, or returning the amount of MTA that makes up a difference in voting majority to the treasury.

Regarding a Shutdown

There are a few ways to tackle this, but I believe making MTA a claim on treasury assets is probably what would be best for the community as a whole. There of course are a slew of other decisions to be made that will likely need to be decided through various proposals but that can be addressed later if the community chooses this route.

Final Thoughts

Although I joined the mStable team last year like many others, I’ve been part of the community since not long after its inception. it saddens me to see the protocol in this state, however; I really believe a shutdown should be considered a last resort, and that all other options should be exhausted prior to a decision being made to shut down the protocol.

Ill add my input as well from a different prospective. I was purely a stable farmer here some time ago but i left when rates went heavily down and the usdt depeg scare came with it lost peg a few percent.

I agree that reducing risks and regaining higher aprs at least compared to other sources is important. Usdc is the most trustworthy. Holding musd is also a risk as it adds another layer for something to depeg. Id rather stake and unstake directly on the specific asset itself, usdc or dai, etc, similar to aave except aave never has good aprs. People can choose to stake against whatever stable they trust if you want to have more options. You can also farm cross chain using those resources to get the best aprs all over.

Mstable branding is fine, in my eyes its all about risk vs aprs gained. I dont like the basket everyone gets clumped into with no choice. I also didnt like the cost factor to stake and unstake (not talking about gas, just the fees for it to maintain the basket). So if i stake for a short duration, i may lose in the end. I liked having this as a pitstop between trading but i may pull it at any time.

If you reduce risk and regain higher aprs that is sustainable, you will regain people that want to use the platform.

Also doesnt make sense to just call it quits. You got this far, have a working platform that plenty have used. Either skeleton crew or acquisition are my 2 picks from above

What follows is pure opinion. Feel free to disregard it.

I’ve been having a lot of trouble organzing my thoughts over this entire situation. I’ve had trouble with it since I learned about it, and I think it’s because there are many things that are wrong and contributory to this situation. Keeping the project afloat means addressing most (if not all) of them systematically.

Disclosures

I suppose first, I should make some disclosures so that my personal stakes are on the table for all to see.

I’m a signer on the protocol dao. I’m paid to ensure that I don’t sign malicious transactions, and to distribute the responsibility of keeping such transactions from affecting the deployed contracts.

I’m a paid member of the ecosystem sub-dao. Specifically, I run the DeWork board. Sometimes I contribute ideas for ecosystem dao activities.

I currently hold ~36k MTA.

I have $0 in the Meta Vault. This is because the underlying stablecoins selected by the team don’t meet my personal criteria for safety and decentralization. This is not a reflection on the quality of the Vault code or its strategy.

Issues

The way I see it, there are multiple contributory issues to our current situation that have nothing to do with ‘runway.’

  • We aren’t decentralized as a protocol, so everything dies without humans running it
  • MTA tokenomics are terrible because majority holders actively removed the point of holding it while failing to incorporate it into new products
  • The Vault needs a completely unrealistic level of success to sustain the team’s salaries.

Of course, there is the runway issue itself. Please excuse the bluntness, but we have a completely unacceptable amount of monthly burn vs income. It needs to be dramatically reduced as soon as possible.

To me, these are the issues that must be addressed in any plan going forward.

Lack of Decentralization

Contracts

It was distressing to discover that not only does the new Vault system require human-managed offchain automation to even work, but that even the legacy products will essentially grind to a halt as well. It was not explained at the time why exactly this is so.

That we’re even facing this situation at all is exactly why decentralization matters. “Well, everything stops working if the team goes away” should not be a potential outcome of a serious DeFi project.

So the first goal of any DAO that continues forward after this is:

Fix the Contracts So That They Always Work

This is completely doable.

Voting Power and Golden Parachutes

James, you should strongly consider doing the ethical thing and burning your MTA tokens. As co-founder, your abdication in this situation comes with extra penalties beyond just not drawing a paycheck. You control an overwhelming amount of vote power. You should forfeit any and all future upside on MTA, and leave governance.

If you want to keep your MTA (and not a guilty conscience) then take a brief unpaid leave, get your head back in the game, then come back and lead.

I understand that my sense of ethics is not going to line up with the people on the team’s sense. From my perspective though, this is pretty clearly the right thing to do.

Anyone on the team who feels similarly to me should voluntarily burn their MTA as well if they bail out.

A Pilot

Someone from the team should come forward to shoulder the responsibility of ensuring the Vault continues to run, in exchange for the fees from the Vault. This should apply if refitting the Vault to be runnable by arbitrary users or keepers is unsuccessful.

To me, the logical person to do this is Nick.

Tokenomics

There’s plenty of “could have, would have, should have” to go around here, so I’m just going to assume that everyone is cognizant at this point of the failures of the MTA token and move on.

The question is what to do about the token going forward.

Since the Vault doesn’t need nor integrate MTA, my first impulse is to part out the treasury to MTA holders. Anyone interested in the Vault can use it, and earn money from the underlying protocol. That becomes mStable’s value prop.

Of course, reality is more complicated. The majority of the vault is treasury assets. Parting out the treasury will dramatically pull down the TVL, and impact how long the vault has to go before it can be cycled to distribute returns. This will affect the human keeper, or automated keepers if the contracts are updated.

Further, governance is tied to the token, and we can’t coordinate as a group without it.

Somehow, MTA holders need to get a bone without completely screwing the vault. Something to represent coordination needs to exist. I don’t know what that looks like.

Unrealistic Vault Success Requirement

It came to light that the Vault would require a $300 Million TVL to sustain the team.

To put this in perspective, this is more TVL than OlympusDAO’s entire treasury, plus $60 million. It’s roughly the size of Synthetix, and more than Euler, Nexus Mutual, or Tornado Cash.

There is only one conclusion from this: the team is too large, overcompensated, or both.

I don’t know the total number of team members or their roles, but the team needs some massive cuts in pay in exchange for reducing their weekly workload. Unfortunately, some will need to be completely de-allocated in order to make room for a (literally) desperately needed marketing position. Hopefully, any such terminations would only be temporary.

A question is what to do with the MTA of core team who don’t just quit. I feel anyone who stays in for the (remaining) long term should be able to keep their MTA. Same for those who want to continue, but are asked to step down. They deserve the chance at an upside.

End

Overall, I don’t know what the right way forward is, but I do feel as though it’s clear to me what the boundaries and assumptions are:

  • Core Team who bail out should not profit from it, at all. Their MTA should go to 0.
  • Market MTA holders should be treated properly if the token is deprecated. The form of this is up for debate, whether its burns/treasury parting/Vault profits, etc.
  • Something must represent being a stakeholder. Perhaps that means only Vault stakers get a vote going forward. I don’t know.

Asks:

  • The Vault should be fixed to not just die if some specific human with specific knowledge doesn’t poke it.
    • The legacy product(s) should also be updated if possible to conform to this decentralizing principle.
  • If the Vault cannot be updated for some good reason, then someone should step forward to run it in return for its fees.
  • James specifically should re-consider his resignation. If he goes forward with it, he should burn all of his MTA (burn, not send to the 0 address) in compensation.
2 Likes

Thanks James for starting this discussion and it is sad to hear that the project hits to this rough spot.

My comments on 3 options;
1. An acquisition from a DeFi project
It could be a good option given the spesifics of any offers or possibilities.
2. A full shutdown of the project
Without trying everything in our power, a clear no! :slight_smile:
3. Continuing on with a very slim team to extend the runway

3rd option is the interesting one to discuss:
i dont believe something didnt work well until now would magically work in a such small timeframe with so much uncertanity. I would suggest that we rescructure our product and search for funding with a new business plan with our good old mStable brand.

Problems to adress: No organic demand for mUSD and no real use-case for MTA

I dont think the idea of the basket of stable assets makes sense in the game theoretical sense without offering a very high APY. It is huge extra risk taking with all the stable coins involved which could de-peg(%65 loss) with nearly no additional gains to our competitors. There is so little trust to stable coins and mUSD brings exposure to so many of them. The only way to save this in my opinion is to restructure mUSD:

Step 1: Reducing the stable assets to the only top stables excluding Usdt(high risk) and trying to find good yield strategies. So we are selling the yield management side of things with early withdrawal penalties.

Step 2: Launching a fork of a Dex like Perpetual Protocol or GMX where trading pairs settled in mUSD(BTC-PERP/mUSD, ETH-PERP/mUSD etc). So we create a demand for mUSD . This demand is also not parasitical just to leach some APY. This could atract degens, bringing; trading fees, swap fees, funding fees and some gaming aspect to the project :slightly_smiling_face: Guys from perp protocol are also very down to earth people and could be open to share their opinions and experiences with us.

Step 3: Introducing a new use case for MTA besides governance. MTA could be used as BNB of Binance or any other exchange token which can be used to pay for trading fees and give stakers reduced trading fees.

Step 4: Searching for funding with the new business plan with running the numbers to be self sufficient as soon as possible. We have an amazing team and a good OG brand.

My least contribution to extend mStable’s life, would be to do my moderation job on a voluntary basis.

2 Likes

First an intro for those that don’t know, I’m one of the core developers. I joined the mStable team at the start of 2021 working the Alex Scott on the contracts. After Alex left at the end of 2021, I took the lead of the contract development.

  • It’s obvious disappointing that we are in this situation. I was looking forward to launching the new vaults we have been working on since the first Meta Vault launch which includes new ETH based vaults. These are still to be audited so involves significant time and money to launch.

  • Working part-time in a caretaker mode is an option. This would be just support the existing products with things like

    • running trusted processes like the fortnightly liquidation of rewards

    • investigate any failed user or automated transactions

    • investigate reported security issues

  • New product development really needs to be done in a full time role. The security considerations of smart contract development requires a lot of time and effort. Context switching between jobs will lead to poor outcomes.

  • Either Cesar or Tush, the other contract developers in the team, can easily do the caretaker role without me.

  • Running a smaller team for one last push with the new vaults could be an option. That could be with or without me.

  • As the lead contract developer, I’m the most expensive resource so the logical person to cut in order to maximise the cost savings.

  • Even with a smaller team doing product development, Treasury funds will be used which means less to return to MTA holders if it doesn’t work out.

4 Likes

Thanks a lot for your comment and the generous proposition made at the end
Obviously, as a core team member, considering these options of selling or shutting down a project we’ve been pushing hard for the past 16 months leaves a sour taste in your mouth. However, when looking realistically at the metrics, token availabilities, success thresholds and $ value retention for MTA holders, the picture changes a bit.
What you wrote here really resonated with me, especially given the token situation and the structural issues:

"I dont believe something didnt work well until now would magically work in a such small timeframe with so much uncertainty. "

I find your 4 steps proposition quite interesting however, from experience with the Meta Vaults and working daily with other DeFi teams, launching fully-fledged products takes a lot of resources (time, energy, cash and leadership).
In my opinion, for the third option mentioned by @james.simpson to be an attractive trade for MTA holders, it would need to turn the project into a cost-minimized venture with a skeleton team focused on existing. I’m not entirely sure a new product idea would follow these traits

2 Likes

Hi @trustindistrust,

Thanks for the thoughtful response. It goes without saying that we have tried incredibly hard for the past 12-18 months to solve some underlying issues at mStable. At the beginning of 2022, most of the first team had left and we needed to rebuild the core contributor group. We also knew that the v1 product had reached its growth ceiling and we needed to build something new. So we focused on Meta Vaults. Even getting to the spec took a lot of work; the whole core contribtour group was working hard from idea to delivery. But the token situation just kept getting worse as you know, particularly as key investors went under. As a core contributor group have been assessing several options to make the DAO sustainable but to be honest we weren’t able to land on a good way forward. @dimsome @TClochard and @rugolini have all been working hard on this and I thank them for their efforts trying to find a strong way forward.

So I just want to say that my offering of these options for consideration comes only after a huge amount of work trying to avoid this situation. Deciding as a community to commit to one of them is what will give MTA holders the most value in my view. I just want to hear the communities view on the whether voting on these three options is the best path forward for the project. I do have a large voting block, which comes from me staking my tokens for a very long time, but I don’t not the largest voting power either, so it’s critical that we hear from these parties but also the community / core contributor at large.

Regarding your points, there’s clearly a lot in your message. I think @dimsome can give some light on the decentralization points but more generally, I want to ensure we focus on the key goal of my post which is to gauge whether the community agrees that we should decide to choose between the three routes provided (an acquisition, a shutdown or to continue) given the head winds the project faces.

Depending on the chosen route, we would as a community need to look into specifics about how that looks and what that means. You’ve brought up many points that I think should be considered after a vote on the future routes has taken place.

Would be great if you could confirm if you think we should vote on those options as a community. I’m very keen to jump into each of your specific points depending on the winning option.

3 Likes

James, sad to see you leave mStable. Secondly thank you for brining this up, it would have been an easy path to just continue and potentially run down the treasury to nil.

I don’t know what the right answer is and I think the path forward probably should be voted on by MTA holders after the core team have provided their input on the different paths forward.

As I see it option 1 and 2 could really just be one option. Try to find an acquirer and if that doesn’t succeed given a sufficiently tight deadline then shutdown and return treasury funds to MTA holders.

I do believe option 3 is viable. This is how I see options 3 potentially working out:
Cut cost dramatically by reducing team size to 3 full time (front end, back end and smart contracts). Incentivise community (through MTA or otherwise) to help out with new vault strategies, organic marketing, community management etc. This should results in a runway of at least 3 years. I do think MTA tokenomics should be prioritised in this scenario. Small buy-back, staking for higher vault yield etc. To make the product more attractive, yields could be super-charged by letting users mint mUSD for leverage, multi-chain vaults could be part of roadmap etc.

1 Like

I agree with Henrik that the first two options could be combined into one option to ensure that there is a clear path forward once a decision is reached. I think it would make sense to move to an initial vote with two options which might look something like this:

1/ Continue with the status quo, with the expectation that a further proposal will be made promptly to discuss options for significantly reducing costs to give mStable the best shot at surviving the bear market and finding success.

2/ Search for a buyer for the project for a fixed period (suggest 1 month) and if a suitable deal cannot be made in that time, move toward a full shutdown of the project.

I also want to say that I fully support James decision to raise this topic as I believe decisive action is required to get the best outcome for MTA holders.

I think by now everybody knows what “continuing with status quo” means. There should already be a consensus that this is not working. So what you purpose can be translated;
1/ Let the project slowly die(in a year).
2/ Try to sell it and if not successfull in 4 weeks then kill it.

i already see from James’ post in discord also that there is no real energy or wish to give it a one last push for success, WITH SOME RADICAL MOVES. I wished that this discussion could be around “we have 1-1.5 years of resources to continue. How can we make this work?”. But it seems like people with real voting power have already decided that this is dead. So it is all about how to close this thing.

I don’t know if that’s a fair summary of the first option. As Henrik and others have suggested, there are a number of potential paths that involve scaling back the team and development to extend the runway. The biggest challenge here may be agreeing on decisive action given that no one has expressed willingness to step in to lead this type of change.

I’m sure there are a lot of people who would like to see the project continue in some way. I don’t think it would be reasonable to accept a shutdown/sale as a foregone conclusion before consensus has been demonstrated through a vote. Any governance proposal should involve an option to maintain the status quo.