mStable Launches Feeder Pools
Today, the first of many incentivised feeder pools (or fPools) were deployed on mainnet as per this Meta Governor proposal.
This post goes through their functionality and how they will stimulate growth and mAsset utility.
“Feeder pools” are composed of 50% any pegged asset such as BUSD, GUSD, UST and 50% mAsset such as mUSD.
mAssets are the default trading pair of all fPools, and efficiently bridge liquidity from each fPool to the main mAsset pool. They provide an entirely new environment to grow mStable, and generate new opportunities for LPs to earn MTA and trading fees.
fPools provide efficient mAsset on/off ramps, generate additional swap volume, leverage mAsset’s Save utilisation rate, and enable mStable to add any number of pegged asset to the protocol — massively increasing mStable’s ability to scale.
Additionally, fPools provide a place for other projects to incentivise their own liquidity and benefit from MTA token emission. If you would like to incentivise your USD or BTC pegged asset with MTA, please message us on our discord!
- Read How to use feeder pools
Provide liquidity and start earning on these pools:
By contributing liquidity to an fPool, the liquidity provider will receive:
- Swap fees into the bAsset specific to that fPool
- MTA rewards
- Possible interest from lending out fPool assets, including the mAsset trading pair
- Possible liquidity rewards from project’s that wish to incentivise their own stablecoin on mStable
4 feeder pools and the imBTC Vault are funded to the following amounts:
- bUSD feeder pool 20,351.6 MTA
- GUSD feeder pool 20,351.6 MTA
- tBTC feeder pool 20,351.6 MTA
- hBTC feeder pool 20,351.6 MTA
- imBTC Vault 10,175.8 MTA
TOTAL MTA — 91,582.2 / week
What do fPools do?
fPools introduce a new invariant for 2-asset stablecoin AMMs that shows similar properties as Stableswap, but can be solved with a lower number of operations. You can read more about it in the fPool mStable Improvement Proposal.
These fPools provide important benefits to mAssets by:
- Providing free
mAssetswaps (effectively allowing users to ‘mint’ mAssets with any pegged asset)
- Leveraging the
mAssetSave rate by providing an internal source of demand for mAssets from within mStable
- Feed swap fees back into the
imAssetby supporting trades between fAsset > mAsset bAssets
fPools maintain the bulk of functionality from mAssets:
- Same interface for Mint/Swap/Redeem
- Ability to deploy fAsset/mAsset onto third party lending platforms to generate yield
- Ability for Meta Governors to enable a governance fee, which extracts a % of total pool revenue
- Governed by vMTA holders
There are a number of core differences between fPools and mAsset pools
- fPools produce LP tokens that increase in value, rather than inflate in supply, creating a new universe of composable yield tokens generated by mStable
- Swaps into mAssets do not apply a fee, making fPools the most efficient place to trade mAssets
- fPools are always composed of 50/50 fAsset/mAsset, and use an invariant derived optimised for trading 2 assets
- fPools will soon be permissionless, i.e. anyone will be able to create them.
- fPools are separate contracts from the mAsset pool and so do not impact the risk profile of mAssets. This means that any pegged asset can be added without impacting the integrity of mAssets.
Feeder pools scale mStable. By supporting an unlimited number of pegged assets, DeFi’s meta asset protocol is now more accessible than ever before.