mStable Telegram AMA Recap
On 15 December 2020, the mStable team took to mStable’s Telegram community to answer questions received via Twitter and a live Q&A segment. Thanks to everyone who participated!
Here are the highlights of the responses provided by James, Alex and Onur in what turned out to be a lively session that covered everything from mStable’s origins to its long-term future as autonomous and non-custodial stablecoin infrastructure.
First, we asked Alex, Onur and James to quickly introduce themselves.
Alex: Hey there. I’m the lead protocol developer here at mStable. I have been an Ethereum developer since 2017 after seeing blockchain as a way to revolutionise financial tools and access. Before that I was primarily in web development. I like writing clean code.
Onur: Hi all! I’ve been working in crypto for almost 3 years now. In my previous life, I was doing scientific computing and applied math in academia.
I did R&D on validator economics with CasperLabs before I joined mStable this September. I’m super excited about DeFi and building financial applications.
James: Hi I’m James Simpson, co-founder and lead at mStable. After studying economics and politics at university in Australia and China, I worked as a management consultant in Melbourne, Australia and Shanghai. After that I moved to work as the investment analyst at a multi-strategy crypto hedge fund in Australia called Apollo Capital, then started mStable 😄
The Basics
Question: Can you describe what mStable is?
James: mStable is a non-custodial and autonomous stablecoin infrastructure protocol. mStable unites same peg assets within an AMM and generates optimised meta assets that unite the underlying, are designed to be risk minimised and also generate an outsized yield for savers.
We plan to build out mStable wherever there is stablecoin liquidity and bake in more and more use cases into the meta assets as time goes on. This is just the beginning. 💪💪
mUSD Price Stabilisation
Question: mUSD is backed to USDC, DAI, TUSD or USDT at a 1:1 ratio. Price stabilization is also a difficult problem to keep mUSD around 1$. So what happens when mUSD raises up or down away from 1$? What are the mStable’s solutions for mUSD stabilization?
Alex: mUSD deviates temporarily above and below the $ mark due to the underlying assets price deviations. At the moment the system is naturally priced just under the $1 mark because the cheaper assets fill up a larger portion of the basket. When price deviates up or down, natural arbitrage would happen on a secondary market to bring the price in line with the underlying collateral.
The AMM will produce a much more stable price once the AMM is upgraded to the ICSMM (MIP-6) due to the basket distribution being more even and thus less impermanent loss. In addition, the system will continue to cap risk of permanent loss through max weights etc.
Global Expansion
Question: What your plans in place for global expansion, are mStable focusing on any market at this time? Or focusing on building and developing or getting customers and users, or partnerships? Can you expand on this?
James: mStable is naturally global given that it is an open, non-custodial and decentralised protocol, so in theory it is currently global.
That said, we believe there are specific markets that would benefit from having mStable’s products available to them. For example, mStable sponsored ETHGlobal and the winner of the mStable prize was a Venezuelan team that built a dApp on SAVE. Apart from that, we will be releasing a multi-language version of the dApp, landing page and governance proposals.
In terms of partnerships, the core team is working on several within DeFi, CeFi and even with other chains.
COVID-19 Impacts
Question: COVID-19 has slowed many economies around the world, but as a crypto business has it affected you negatively or positively? Secondly, are you still on track to achieve your targets as the roadmap says?
James: Thanks for the question. Covid has impacted the global economy very negatively. Meanwhile DeFi and Bitcoin have grown from strength to strength. I can’t say I know the reasons for this, but as a team I feel we have navigated the inevitable challenges a pandemic presents.
We are working hard to deliver on the roadmap. A proposal to tokenise the SAVE contract came forward after the community responded really positively to that. We are also on track to deliver our new custom built AMM for mBTC and then later mUSD as well as significant gas improvements.
Keep an eye out for these protocol improvements and their proposals as we are super excited to show them to you all.
Here are some of the MIPS:
On Liquidity
Question: Liquidity is a major challenge for decentralized exchanges, how does mUSD solve this problem?
Onur: mUSD provides one of the highest USD yields in the world so there is a natural incentive here for users to add liquidity into the protocol. Our new AMM will make this liquidity provision process even better, allowing mStable to guarantee liquidity in all major stablecoins, target different basket weights, increase composability, usage and hence swap fees — increased swap fees lead to higher returns for SAVE users, leading to higher demand for mUSD, ultimately increasing liquidity.
We also incentivize liquidity providers with liquidity mining programs. You can see the current incentives in our EARN product. One of the purposes of MTA is to incentivize adding liquidity, as well as participating in governance.
Community Driven Decision Making
Question: What is the role of the community in the governance of the your crypto ecosystem in order to be able to call it community driven? Which members of the community can participate in the decision making?
James: mStable is governed by MTA holders who have staked their tokens to participate in the community-based proposal system. Anyone can participate in the mStable governance process by joining discussions in either the Discord or public forum. Ideas are then formalised and proposed to the community for on-chain signalling by MTA holders.
Here are the current votes open (as of 15 December 2020): https://snapshot.page/#/mstable
Ultimately, mStable is an open protocol where users are empowered. Users earn all fees on the protocol (100% of income generated on mStable currently goes to savers), all users will be able to earn MTA and MTA will increasingly move to the centre of every decision and action on the mStable protocol. We are really excited to propose staking v2 which will significantly increase MTA power and utility within mStable.
At this point we opened things up for a live Q&A, and the team chose which questions to answer from the numerous that were posted.
mUSD provides one of the highest USD yields in the world so there is a natural incentive for users to add liquidity into the protocol.
Roadmap
Question: Could you please provide some info about your roadmap and how mStable is progressing so far?
James: Check out the most recent blog post here.
SAVE v2 was put forward (and wasn’t mentioned in the roadmap post) because the community was very keen to see that happen. You can read about this proposal here: https://mips.mstable.org/MIPS/mip-5
In the coming months, mStable will look very different if all proposals pass:
- SAVE v2
- New AMM
- mBTC
- Staking v2
- Recollateralisation
- Gas upgrades
- Business Development partnerships 💪
Smart Contract Risk
Question: Smart contracts are prone to failure and many projects fall victim to this, costing users money. How reliable and secure is your smart contract? Have is it been audited through any of the parties?
Alex: Over the past few months there have been a number of unfortunate attacks happen. mStable contracts have been audited twice — most recently by Consensys Diligence, and we prioritise security as much as possible. We have had an active bug bounty offering up to $25k for finding bugs in the mStable contracts which has been live since July 14th. In addition to formal audits and this, we fully test all of our contracts with 100% code coverage, and also simulate all deployments and upgrades both on testnets and mainnet forks before changes.
mStable’s Name
Question: Where does the “mStable” name coming from and what does the logo represent?
James: mStable is a shortening of “Meta Stable”. We liked the name because the m is in the protocol token Meta as well as at the beginning of every mAsset; mUSD, mBTC, etc.
The logo has the m sit above a think line — this line represents the mStable liquidity pools and the m represents the meta assets that are created!
Incentives for Liquidity Providers
Question: What incentives do long-term liquidity providers receive? What is the principle of the mStable governance token? How can users be part of the mStable governance model?
Onur: Those are good questions!
- It’s on our roadmap to add time-weighted reward distribution to liquidity providers. That means LPs that have provided for a longer time will receive higher rewards.
- You simply stake MTA, and that gives you voting power. You then vote on proposals. Your voting power is directly proportional to the amount you stake and the duration you lock up.
- You only need to stake MTA in order to take part in mStable’s governance. You can also join our Discord and participate less directly.
