mStable Governance: Staking V1 Launch

derc
derc
Sep 25, 2020 · 4 min read

This is the first of a series of mStable Governance posts that will be released over the next two weeks. These posts will cover staking, the technical specifications of staking, the mStable DAOs, the rough consensus process, the mStable Grants program and more. Today, we are releasing staking V1 and this post is a brief introduction.

Summary

Access the Governance App Here

Introduction

mStable is building an open and decentralized financial protocol based around stablecoin liquidity pools, for an unlimited number of applications.

To achieve these goals, we cannot do it by ourselves.

We need a large and decentralized stakeholder base with robust governance to make key system decisions while building the ecosystem and community alongside us.

Our Meta distribution program earlier this year helped bootstrap a community of governors through our ecosystem rewards program. To date, more than 1.37m of MTA tokens have been distributed from our EARN pools since we began allocating out rewards on June 29th this year.

Today, we are taking our efforts one step further with the announcement of Meta Staking V1.

Why Participate

With the ultimate goal of decentralization and bootstrapping a community of governors, Staking V1 will introduce a form of decentralized governance and allow Meta holders to participate in key decision making over their protocol.

This will initially be done on our Snapshot page, where users with MTA token balances can signal their preferences on-chain.

Meta stakers will be able to vote on proposals after they have passed through the rough consensus process (more information on this in a later post).

Staking V1 will give Meta holders an important voice in shaping decisions made by the protocol and the direction that mStable will take.

Staking V1 Rewards

Staking V1 will offer a chance for participants to earn MTA rewards that are subject to a multiplier. The longer a participant opts to lockup their MTA for, the higher this multiplier will be on both their voting weight and their token reward.

The reason for this is simple: MTA holders that signal their long term commitment to the protocol should be rewarded as this action bolsters system security. Why are long-term aligned MTA governors so critical? To be governed responsibly, those that propose protocol changes and vote to see them implemented must have downside risk. Without a lock in with decreasingly weighted vote power, mStable’s protocol could be attacked by short-term MTA holders or borrowers seeking to adversely push a sub-optimal outcome.

Meta holders must stake MTA in the staking contract — for a minimum of one week or a maximum of one year. Since we envision the migration to Staking V2 happening in this time, there will be no option to stake beyond the initial one year date. Once the migration to Staking V2 begins, all locked MTA will be released, and able to be ported over to the V2 contract.

In return for staking, users will receive MTA rewards and vMTA, which represents their voting weight for proposals.

Approximate multipliers on MTA and voting weights are as follows:

1 week: 0.5x
1 month (4 weeks):
1x
3 months (12 weeks):
1.4x
1/2 year (26 weeks):
2.5x
1 year (52 weeks):
3.6x

The multiplier is applied from the moment you stake and vested continuously over the staking period.

Your voting weight, however, decays over time. The staking contract bakes in incentives that place the highest voting weight at the beginning of the stake term. For example, if you lock up 100 MTA for 1 week, then your effective voting weight would be 50 MTA locked up for a month.

The maximum lock-up period available to stake will decrease as time passes, i.e. after 1 month, the maximum lockup is now 11 months, after 6 months, the maximum is 6 months, and so on until Staking V2 is launched.

This reward structure is thoughtfully designed to give our long-term supporters, community members, and eventual governors a boost in their MTA holdings before Staking V2 comes live.

mStable

Building autonomous and non-custodial stablecoin infrastructure.