mStable – a new DeFi protocol unifying stablecoins, lending, and liquidity into one robust standard – officially launched its beta on Ethereum mainnet.
1/ Today, I'm excited to announce that @mstable_ has gone live on the #Ethereum mainnet (in beta) ??
mStable is a protocol that unites stablecoins, lending and swapping into one robust standard.
Let's explore what you can do with mStable today ??https://t.co/eKtZeuacQc
— Anthony Sassano | sassal.eth (@sassal0x) May 29, 2020
The mStable protocol aims to address fragmentation between same-peg assets, lack of native yield with other stablecoins, and incurring an impermanent loss when leveraging with Automated Market Makers (AMMs) like Uniswap for liquidity.
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.
Protocol’s Native Token $MTA
The last piece of today’s launch also highlights the protocol’s 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.
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.
To learn more about MTA and the role of governance, feel free to visit the official docs.
Closing Thoughts
The launch of mStable provides users with a single, unified protocol for accessing stability, savings, and liquidity for a basket of stablecoins. With the rapid growth of stablecoins on Ethereum, the addition of mStable as a new alternative for accessing a range of money verbs (like savings, swapping, etc.) in a single application is rather intriguing for the broader ecosystem.
As we continue to watch competitors try and knock off Dai, it’s interesting to see if any of these protocols can steal significant market share from the leading lending protocol in Maker.
In the coming months, we should expect to see more details on the MTA governance token as well as the protocol iterating beyond its Beta launch.
To stay up to date on all things mStable, make sure to follow them on Twitter or join their Discord!
