Please note that this may contain out of date information about the state of the mStable protocol. See docs.mstable.org for up to date information.
This article runs through each of the functions of mStable’s protocol token Meta (MTA), along with its role in bootstrapping a community of Governors through our ecosystem reward program — which begins today! Jump to the end of the article if you want to read about rewards.
- Go to app.mstable.org/mint to mint mUSD.
- Go to this pool on Balancer and add liquidity, equal parts mUSD and USDC.
- The mStable team will take a random snapshot to allocate 50,000 MTA per week in the first month, proportionately to liquidity contribution. This is in addition to any BAL rewards or fees generated by this pool.
Get started: mStable’s first ecosystem reward pool
Please note that MTA doesn’t yet exist. It will be created in the coming weeks: in the meantime, users are able to earn it as detailed below.
Our software is still in beta, and whilst it has been audited, we cannot guarantee contract security. Please don’t contribute more than you can afford to lose and use this at your own risk.
- Investors and partnerships: 20.2%
- Current team and advisors: 15.5%
- Reserved for Public Rewards: 51%
- Reserved for Institutional Rewards: 6.7%
- Mesa auction and BAL pool seeding: 3.2%
- Future contributors: 3.5%
The distribution of MTA is heavily weighted towards users that contribute to mStable asset liquidity and utility (over 50% of supply is allocated to rewards in total). The total supply of MTA is 100 million.
Meta (MTA) Functions
mStable has a protocol token. It will be proposed that MTA has three core functions:
- To act as the ultimate source of re-collateralisation for the protocol. (This does not exist yet)
- To coordinate decentralised governance.
- 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 will be proposed to be baked into MTA in Phase 2 of the protocol.
Function 1: Re-collateralization
mStable aims to create assets that are stronger than the sum of their parts.
Currently, most pooled stablecoin products compound risk for their liquidity providers (LPs). If an underlying stablecoin permanently loses its peg, users are incentivised to fill the pool up with that stablecoin completely, redeem anything of value, and ultimately drain all value from the pool, potentially leaving the LPs with naught.
Long term, we feel users will want this risk to be managed.
mStable works to achieve this through first setting maximum weights for each underlying asset. A max weight caps the exposure a LP has to that asset. Should an underlying asset reach its max weight, it is no longer able to be minted with or swapped out. Likewise, on the redemption side, when a max weight is hit, users are only able to redeem multi — meaning the full basket at its current proportions. This means that in the event of a permanent loss, users can only fill the basket with a failed asset to a maximum degree and can only redeem the net asset value (NAV) of the basket. This mechanism caps risk.
If a collateral asset permanently loses its peg, mStable will be able to purge that asset and recover lost value by selling MTA for the outstanding mStable asset.
Function 2: Meta Staking & Governance
Governance is an emerging yet critically important area in cryptocurrency-based mechanism design. The MTA token aims to coordinate decentralised governance. Meta Governors must stake to earn. They would receive earning in return for their work governing.
The initial protocol contains an upgradable governance module, with the first version facilitating proposals between a small group of participants that make up the mStableDAO and the ProtocolDAO. All processes will always remain visible and transparent to the wider community. Meta Governors will soon vote directly on whether or not to pass and implement proposals.
The proposal system will govern the parameters of and execute actions in mStable, including but not limited to:
- addition/removal of mStable assets;
- addition/removal of baskets assets and their max weights;
- Swap fees
Meta governs mStable. Each system parameter will be determined by these users. To participate in governance, users must stake MTA and vote on proposals. By staking MTA and voting, a user becomes a Meta Governor.
Function 3: Community incentives — starting today!
Today, we are announcing the first part of the reward program: ecosystem rewards.
- Ecosystem Rewards begin today, 26 June 2020
- The majority of MTA’s supply will be emitted via the Ecosystem and other rewards to directly incentivise those that provide resources to bootstrap the minting of mStable assets, and to fund their liquidity and utility. This has a dual benefit of creating a fair and wide distribution of the MTA token.
- This reward pool is open to anyone.
The First Pool: Balancer mUSD<>USDC pool
- Our first pool can be found here, on Balancer.
- The pool is an mUSD<>USDC pool, 50/50 weighted, with a 5 bps trading fee.
- The first month of rewards will have 200,000 MTA allocated to our pools, beginning with exclusively this one. Each week, a member of the mStable team will take a snapshot at a random time and allocate 50,000 MTA to the addresses who have contributed liquidity, on a proportionate basis. A file will be dropped in our Discord channel each week, detailing the rewards.
- Balancer also has its own rewards so any BAL that is given to this pool will be distributed entirely to users: this means you can earn MTA and BAL at the same time, as well as any trading income from the pool itself.
- We have built a smart contract that will coordinate a number of ecosystem pools (liquidity, lending etc.) which will be released after this first month.
- MTA’s token generation event is expected to be within the next month. The first 3 weeks of Meta reward tokens will be unlocked within 24 hours of Mesa genesis event concluding. More information about this will come in the coming days and weeks.
Distribution of Meta
Robust governance, in our view, implies a large and decentralised stakeholder-base. Long term, a single entity or a small group of closely aligned entities would centralise mStable and potentially create dangerous single points of failure. It is a core project aim to ensure a broad MTA distribution.
mStable rewards are our first significant step in this direction. These rewards pay those who contribute to mStable’s liquidity and utility. This has been designed in the spirit of generalised (liquidity) mining, whereby users are rewarded for their work in contributing to the growth of mStable.
This is just the beginning. A lot more information is forthcoming about each aspect of Meta in the near future. Thanks for reading and happy farming! ;)