✔️ TDP 31 - Pre-Approve MTA for Market Making

Simple Summary

After $mUSD was listed on Coinbase last month, it has become apparent that any major CEX listing of mStable assets need also to be accompanied by a market making service to ensure liquidity for that asset on launch day. This is a requirement from the exchanges as a pre-condition to listing on their platforms.

With this in mind, it is proposed to earmark the use of up to 2,000,000 MTA from the TreasuryDAO to serve as a loan to a trusted Market Maker should MTA get listed on a major centralised exchange. The term of this loan would be for a window of service during the first few months of bootstrapping MTA liquidity for that specific CEX.

Abstract

When mUSD got listed earlier last month on Coinbase Pro, there was a request by the exchange to provide sufficient liquidity for the trading pair. This was provided to a Market Maker on very short notice and with significant overhead by the core contributor team.

In order to avoid any similar bottlenecks in the future, it is proposed to earmark up to 2,000,000 MTA from the TreasuryDAO to loan out to trusted Market Makers over a previously agreed amount of time in order to bootstrap the MTA market on the exchange in question.

A major exchange is classified as a Top 10 exchange in the ecosystem, e.g. Binance, Coinbase, Kucoin, etc…

A major market maker is classified as a Top 10 trusted party in the ecosystem, e.g. Wintermute Trading, Kairon Labs, Alameda Research, GSR, etc…

If approved, these funds would be sent to the Funding subDAO, so that they can be deployed quickly should the need arise.

Motivation

Historically, when a new market is opened on a major CEX, a certain amount of liquidity needs to be provided by professional market makers in the ecosystem. Since we do not know the exact time and date if or when MTA will get listed, we should prepare ahead of time, as failure to provide a sufficiently liquid market could result in a delisting from the exchange.

Specification

Proposed workflow

1.) The earmarked MTA will be sent to the mStable Funding subDAO upon resolution of the vote.

2.) A market maker deemed trustworthy by the mStable core contributor group will be selected for this venture prior to the CEX listing taking place and be announced once selected in the official forum.

3.) Upon listing on the CEX, the earmarked MTA will be sent to the previously selected Market Maker for a window of service until the market is deemed established by the core contributor group, and then returned back to the Funding subDAO.

Next Steps

Pending no significant changes to its content, this proposal will be taken to a Snapshot vote on Monday, the 20th December 2021 .

Voting will be open for a 5 days window to give adequate time for a concurrent discussion. Governors can change their vote at any time should the discussion sway their decision. We look forward to hearing what MTA token holders have to say and seeing how they cast their votes.

2 Likes

Fully in support of this.
The mUSD loan used for Coinbase Pro listing has been then used to power the following on Coinbase.com. Earmarking tokens is fundamental to react quickly to exchanges process

Having been involved in the process to secure an mUSD loan to help a market maker provide liquidity for the mUSD launch on Coinbase, I am in favour of this proposal. If we are serious about getting $MTA on a major centralised exchange, this is something we should have ready to go and must have in the back pocket.

I think we can also explore other options like Tokemak, but that would be a separate consideration.

Thanks again Steph for presenting this to us all.

I am in full support of this and excited to see mStable pursue a CEX listing for MTA.

Supporting this and will vote FOR.

Completely support this

Very handy if MTA gets listed on a CEX.
What would be the downsides of doing this? Can the treasury get considerably less MTA back?

Thanks for the positive feedback everyone. The voting for this TDP will go live in a little over 1 hour! :sunglasses:

@juan some core contributors have done this before, so they’ll most likely be much better able to comment on this than I am!

1 Like

Hi all,

This TDP has resolved in favour and the 2M MTA have been successfully moved into the Funding subDAO.

3 Likes