Difference between revisions of "MStable (MTA)"

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Basics

"A protocol that unites the asset economy into one standard that is more secure and usable than the sum of its parts. mStable will be going live in the coming months.

mStable is:

  1. A permissionless protocol for unifying, securing and governing tokenised assets.
  2. An SDK for DApps and exchanges to simplify and expand stablecoin user experience.
  3. An open reward pool to bootstrap liquidity, utility and a decentralised community of governors."

History

Audits & Exploits

  • Bug bounty program can be found here. Is live (12-8-2021) and offers as much as 100k for the most critical of findings.
  • Scored a 97% on DeFi Safety (21-10-2020); "​Two audits have been preformed by Consensys Diligence and Bramah Systems. The Audit by Consensys diligence was preformed before deployment. (July 2020) The audit from Bramah Systems was preformed before deployment. (April 2020)."
  • Got downgraded to 90% (12-8-2021):

"mStable is updated to a 90%. An excellent example of a transparent protocol, mStable makes up for what they lack in documentation with top-notch testing, security, and admin transparency."

Bugs/Exploits

Governance

Admin Keys

"Governance can easily be found in the Governance section of their documentation.

a) Most of the contracts are immutable, and few are upgradeable. This is described here.

b) There are defined roles in the governance section of the mStable documentation.

c) The capabilities for change in contracts through voting are described here.

Pause Control is mentioned in "Areas of interest", and recent governance tests are recorded here."

DAO

"mStable will be controlled not by a single entity but by a global community of Meta Governors. Each system parameter will be determined by these users.

To participate in governance, users must stake Meta tokens and vote on proposals. By staking Meta and voting, you become a Meta Governor. The amount of Meta a user stakes is proportionate to their weighting in the vote (if they indeed vote). For staking and governing, Meta Governors receive all mStable redemption fees, proportionate to their stake amount.

A portion of staked Meta will be liquidated in the event of an underlying asset failing. Only after this liquidation, and only if required, will Meta be diluted, up to a point, in order to cover any remaining losses due to a peg break.

Critically, this means that participating and profiting as a Meta Governor is not risk-free: a portion of staked Meta is the first source of recollateralisation value."

  • From their docs (30-5-2020):

"Governance decisions will initially be determined by the core team, but will shift gradually to a community-based proposal system once mStable’s network activity achieves critical mass. The initial protocol contains an upgradable governance module, with the first version facilitating proposals between a closed group of participants whilst remaining visible and transparent. In future versions, the protocol is well placed to capitalise on existing DAO toolsets.

The proposal system will govern the parameters of and execute actions in mStable, encompassing the:

  1. addition/removal of mASSETS;
  2. addition/removal of bASSETS and their max weights,
  3. redemption and minting fees;
  4. selection of oracles (if needed);
  5. upgradability of system modules: Re-collateralisation and Governance"
  • From their blog (21-5-2021):

"At time of writing, mStable uses a combination of discord, our discourse forum, a public Snapshot, and Gnosis Safe and Aragon entities to manage the mStable protocol and its treasury. We are in the process of exploring whether SafeSnap could be brought into mStable’s governance, and there is much work to be done to further refine how we govern the protocol and the public treasury via the ProtocolDAO and mStableDAO respectively. We are soon going to move to more sophisticated and binding tools that give token holders direct control over these multisig addresses.

The project is governed by two DAOs:

  1. The mStableDAO, which manages the protocol’s public token treasury in the long term interest of Meta token holders.
  2. The ProtocolDAO, which oversees and implements changes to the mStable protocol. This applies to mStable on Ethereum and Polygon at present but will expand in future to other chains.

For each of these DAOs, we have brought official CatHerders on board to act as independent representatives for them. On average, 11% of addresses that have staked MTA participate in our snapshot proposals. These 11% of addresses represent around 30% of the total vote weight (vMTA) in the system."

Treasury

Token

Launch

"mStable announced that it will launch its protocol token Meta (MTA) on Balancer at approximately 14:00 UTC on Wednesday, July 15th 2020."

"mStable launched their protocol token (MTA) over the weekend on the Mesa platform (built by Gnosis)."

"The silver lining is that DeFi teams are becoming aware of the underlying issues. Best exemplified by mStable - who was set to launch a similar offering as bZx on Balancer this week - the team elected to delay the offering in order to design a more fair and robust system for their MTA distribution event. In turn, mStable's token offering will be hosted on Mesa, a Gnosis-based DEX offering ring trades and batched orders to prioritize fair pricing over the instant settlement. Investors can place bids before the auction begins (which starts on Saturday, July 18th), allowing anyone to get a fair price, with the chance of the offering concluding within 5-30 minutes depending on demand for the tokens. Equally as important, all proceeds from this auction will go to the mStable Aragon DAO and will only be available once the mStable protocol has achieved a sufficient level of governance decentralization."

Token allocation

  • From their docs (30-5-2020):

"It is a core project aim to ensure a broad Meta distribution. More granular information about Meta's distribution will be released as we approach launch."

"As seen with Compound and the SAFG model, mStable is taking a similar route with the launch of the governance token, an Open Rewards Pool, and staking rewards. 20,000,000 MTA (20% of the total supply) will be distributed via an open reward pool to directly incentivize those that provide resources to bootstrap the minting of mStable assets, and to fund their liquidity and utility."

  • From their blog (26-6-2020):

"Current Investors: 6.5%

Reserved for future sales & growth: 26.0%

Reserved for Public Rewards: 20.0%

Reserved for Institutional Rewards: 5.0%

Rewards yet to be allocated: 20.0%

Team, Advisors & Future Team: 22.5%"

Utility

"native governance token, $MTA. With governance quickly emerging as a critical piece to a protocol’s success and long-term sustainability, mStable is electing to launch the MTA token in order to coordinate decentralized governance by incentivizing stakeholders to act in the best interest of mStable and secure the system against loss."

  • From their docs (30-5-2020):

"The Meta token aims to coordinate decentralised governance by incentivising stakeholders to act in the best interests of mStable. Meta holders are incentivised to maximise the overall growth, use and stability of mStable given:

  1. Meta Governors must stake to earn. Optimal earnings occur when mStable grows securely: A percentage of bASSET interest, swap and redemption fees are sent to staked Meta in compensation for their risk and work in Governing the system.
  2. System instability risks a portion (5-10%) of staked Meta liquidation and/or dilution and subsequent loss of value (see re-collateralisation). "
  • From their blog (26-6-2020):

"mStable has a protocol token, which will have three core functions:

  1. To act as the ultimate source of re-collateralisation (insurance).
  2. To coordinate decentralised governance.
  3. To incentivise the bootstrapping of mStable asset liquidity, utility and a community of Governors. Ecosystem rewards begin today: contribute to our Balancer mUSD/USDC pool to earn a share of 50,000 MTA per week, along with any BAL rewards that are paid out to this pool.

Function 1 and 2 will be baked into MTA in Phase 2 of the protocol. Currently, only function 3 is live."

Token Details

EARN

  • EARN (3-8-2020) consolidates all of mStable’s incentivised liquidity pools into one place, and lets anyone track their Meta rewards in real time.

Stablecoin

Coin Distribution

Tech

  • Whitepaper can be found [insert here].
  • Code can be viewed [insert here].

Implementations

Other Details

"mStable is a smart contract system built on Ethereum. Whilst mStable is built to cater for a multitude of tokenised assets, this explanation will focus on our first asset, mUSD.

To mint an mStable asset you send any of the underlying assets to the smart contract of that asset. For the USD asset, the underlying stablecoins could be USDC, TUSD, USDT, USDC, GUSD, DAI, and so on.

For example, if you send 100 DAI to the mUSD contract, you will receive 100 redeemable mUSD back. Minting costs you nothing — in fact you will be rewarded for doing this. Your mUSD is, in theory, more secure than your DAI as it’s backed by several other stablecoins as well as by the mStable system token Meta. The process is the same for mGLD, mEUR, mBTC and so on.

Each mStable asset is able to rebalance. This means that if a great new stablecoin comes to market, it can be added in. It similarly means another can be removed, or their relative maximum weights changed. If you redeem your mStable asset, you have to pay a fee in Meta. Overtime, this fee will be become very low to encourage use of the system.

mStable assets are 1:1 backed and completely on-chain

Aside from fragmentation, stablecoins have had difficulty scaling due to having collateral held off-chain or requiring sometimes extreme levels of over-collateralisation.

Fiat backed stablecoins are 1:1 backed but their assets are held off-chain, ironically requiring more trust than fiat. Virtually every DeFi product must be overcollateralised — for example, Synths backed by SNX currently require a minimum of 750% collateralisation."

Mint

"mStable allows anyone to use one or a combination of the supported USD stablecoins – including DAI, TUSD, USDT, and USDC – to mint the protocol’s stablecoin, mUSD, at a 1:1 ratio. Users can simply access the protocol with a web3 wallet (like MetaMask) and specify the amount of mUSD you wish to mint.

In certain cases, users will only be allowed to multi mint with a basket of stablecoins instead of one specific asset, specifically when one asset hits its “max weight” or debt ceiling. The max weight is imposed as a safety limit to protect the system in case of any bugs and loopholes with the protocol. In the long-run, the mStable team plans to remove these limitations as well as allowing users to mint mUSD using other major crypto assets like ETH."

Save

"mStable’s “Save” mechanism allows anyone to earn a native APY by locking their mUSD into the mStable Savings Contract. The protocol leverages a combination of the interest accrued from lending the assets on Compound and Aave as well as swap fees generated on mStable. The combination of these two mechanisms *should* provide depositors with an above-average interest rate for mUSD savers."

Swap

"mStable also lets users swap underlying stablecoins with zero slippage. The protocol charges a 0.3% swap fee along with the normal Ethereum network transaction fees.

Similar to minting, there are certain temporary restrictions where swaps on mStable will be limited, which will occur when any attempted swap drives the underlying stablecoin past its “max weight”. If this happens, users will be required to wait for the system to change, or swap the stablecoins with another available pair."

Fees

Upgrades

"mStable launches new, composable version of mUSD Save: The mStable genesis team released mUSD Save V2 — a tokenized savings account."

Staking

"Staking v2 Live on mStable: You can now earn MTA rewards, swap fees, and Balancer tokens in v2 of the mStable staking system."

  • From their docs (30-5-2020):

"mStable will be controlled not by a single entity but by a global community of Meta Governors. Each system parameter will be determined by these users.To participate in governance, users must stake Meta and vote on proposals. By staking Meta and voting, a user becomes a Meta Governor. The amount of Meta a user stakes is proportionate to that user's vote weighting.

For staking and governing, Meta Governors receive a portion of mStable revenue proportionate to their stake amount.

Critically, participating and profiting as a Meta Governor is not risk-free: a portion of staked Meta is the first source of re-collateralization value. A portion of staked Meta will be liquidated in the event of a bASSET failure, for example. Only after this liquidation, and only if required, will Meta be diluted, up to a point, in order to cover any remaining losses due to a peg loss.

Meta Governors make all system decisions. If they make the wrong decisions, they should be the hardest hit. If they make good decisions, they should be rewarded the most. These tight incentives direct Meta revenue directly to those who have the chosen to take the most responsibility and risk in the system." 

Oracle Method

Privacy Method

Their Other Projects

Roadmap

  1. "Protocol upgrades including adding permissionless, Factory Feeder pools. This means anyone will be able to create a stablecoin liquidity pool on mStable
  2. Product improvement like targeting new EVM compatible ecosystems, more Quests/Gamification, and making Save easier to integrate.
  3. Immediate MTA emission reduction and the launch of a new Emission Controller to direct MTA incentives.
  4. Protocol DAO and Treasury DAO Signer elections and a Treasury DAO Bond program"

"Phase 1

This is the initial implementation of the mStable protocol, and facilitates the core functionality surrounding mASSET usage, while also setting the framework for the transition into later phases.

3/5 Gnosis Multisig, primarily controlled by core team members and close affiliates.

Phase 2

Due to Meta price discovery and fair token distribution achieved through the rewards mechanism, it is feasible to begin to introduce both a more decentralized version of governance, and enable the re-collateralization functionality.

Phase 2 sees the introduction of Re-collateralization into the system through the Recol module, and the introduction of staking into the actual functionality of the system.

Company Aragon DAO orchestrated by an initial council of Governors - both core team members and community stakers. Instead of merely introducing external governors in the system, there are additional intermediary steps we can take to make the transition easier (such as limiting vote proposals to a specific group, such as core team and investors at the beginning).

  • Deploy a Company Aragon DAO integrated by an initial council of Governors:
    • The DAO will have a Token Manager app using a custom token that will be distributed between the initial governors of the council allowing them to vote
    • There will be a Staking app as a middle layer in charge of ensuring that only Governors that have staked some Meta token are allowed to vote
    • The re-collateralization will use the Voting app built-in in the Aragon DAO
    • The Governor will be the Agent app of the DAO allowing the DAO to call the mStable system when decided by the council
  • Transfer the Governor address to the council DAO

Phase 3

At a high level, this phase sees the introduction of a Company Aragon DAO using the Meta token as the exclusive governance token. The allows us to capitalise on the wide distribution of the Meta token and the maturity of both the protocol and Aragon networks.

There are a number of intermediary steps we can take throughout this deployment, but at a high level, the transition stages are as follows:

  • Deploy a new company Aragon DAO governed by the community:
    • The DAO will have a Token Manager app using the Meta token as the governance token
    • There will be a Staking app as a middle layer in charge of ensuring that only governors that have staked some Meta token are allowed to vote
    • Tweak the Voting app to decide which conditions need to take place in order to be allowed to submit Voting proposals
    • Implementation of delayed upgrades, i.e. 1-2 week implementation buffer before key system parameters are decided upon
    • The re-collateralization will use the new Voting app built-in in the Aragon DAO
    • The Governor will be the Agent app of the DAO allowing the DAO to call the mStable system when decided by the community
  • Transfer the Governor address to the community DAO"

Usage

Projects that use or built on it

Pros and Cons

Pros

Cons

"yield optimiser, full team, raised rounds of venture funding, investors got in ground floor prices. Largest incentivised parties that will do things to increase value of the network: team + advisors."

Competition

"mStable is a pegged asset swapping protocol that shares many similarities to Curve. It has a basket for each asset (USD, BTC, etc.) and has tokens pegged to that asset inside the basket. Both mStable and Curve serve the unique market of swapping pegged tokens for one another. mStable claims to offer “zero slippage swaps.” This is because of the protocol’s model prices each asset in a basket against every other on a one-for-one basis. Effectively, this means 1 USDT can be swapped for 1 DAI, even if the price of a single DAI is 1.02 USDT in the open market. Hence, prices on mStable are independent of the market, creating a ton of unique arbitrage opportunities. Curve, on the other hand, incorporates the active market price for an asset.

Smaller trades may be more cost-effective on Uniswap thanks to the difference in gas, but larger trades are better on Curve. mStable only has the edge over Curve in a scenario where there is a large enough spread between prices on Curve and mStable to justify paying extra in gas."

Team, Funding, Partners

Team

Funding

Partners 

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