Feb. 2022, Simon@footprint.network

Data Source: Footprint Analytics mStable Dashboard

DeFistable currencystable currencyThe most common, there are currently over 70 stablecoins in circulation. Most stablecoins are pegged to the U.S. dollar, but no protocol can support all U.S. dollar-pegged stablecoins.

Anchoring the same asset will appear in the form of different tokens through different protocols, and users often need to perform swap between these assets. mStable is launched to solve these problems.

What is mStable?

mStableIt is a stablecoin aggregation protocol based on Ethereum. Through smart contracts, a package of underlying assets bAsset (Basket Asset, such as USDT, DAI) is minted into mAsset (such as mUSD, mBTC) according to a certain weight. Currently mintable assets include mUSD anchored by USD and mBTC anchored by BTC.

mStable aims to solve the following 3 problems:

• The tokens anchoring the same assets are too complicated, with high user threshold and poor experience

As at the beginning of the article, if you want to solve the problem of using the same anchored asset in different protocols, you need to constantly convert each other.

• lack of yield on assets

Increase user income through the Save function, and get additional MTA rewards or other platform token rewards for staking.

• Lack of protection against permanent loss of anchored assets

Compared with a single stable currency, mUSD is made up of multiple stable currencies by share, which will disperse the loss caused by the extreme risk of one of the stable currencies. MTA will also activate the protection mechanism to re-anchor the US dollar in the event of unanchoring.

mStable provides a one-stop solution to the above problems through the three sections of Save, Pools and Swap.

1. Save

Users can earn interest after depositing mUSD or mBTC. The highest APY of stablecoins in the past 90 days was 44%, and the lowest was 4%.

orCompoundorAaveThese lending protocols earn, along with fees for users to exchange and redeem on the platform.

Users can choose from 10 different tokens for mUSD storage (including directly depositing mUSD, or depositing USDC, DAI, FEI, ETH, etc.), and also support 7 tokens for mBTC storage. After the user deposits non-mAsset assets, the agreement can be minted directly or exchanged into mUSD/mBTC. After depositing, the user will get the certificate of imUSD / imBTC, and the user can also directly deposit the assets into the Vault to get the token reward MTA of the agreement.

2. Pools

Users provide liquidity for the mStable pool and can earn swap fees. Depositing directly into the Vault also earns MTA rewards, ⅓ of MTA can be earned immediately, and the remaining ⅔ is unlocked linearly after 26 weeks.

Liquidity providers can increase their income by up to 3 times by staking MTA. The current reward APY is as high as 41.3%, but most pools have less than $3 million in liquidity.

Since the two assets of the mStable pool currency pair are anchored to the US dollar stable currency or BTC, the pool basically does not have the risk of impermanent loss.

3. Swap

In Swap, users can quickly exchange, mint or redeem mAssets directly between tokens that anchor the same asset.

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Picture Source -  mStable

according to

1. mUSD

according toFootprint Analyticsimage description

Footprint Analytics - mUSD Token Price

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Footprint Analytics - mUSD Market Cap

Footprint Analytics - mStable TVL

2. MTA

As the governance token of mStable, MTA has the following three functions:

• Motivate the liquidity of mStable

In order to encourage more users to mint mAsset and provide liquidity, 20% of MTA will be used to reward contributors in the early stage.

• Governance platform

Users can participate in the governance of the platform after staking MTA, and have voting rights on the parameters of the platform including exchange fees, reward distribution schemes, bAsset composition and weight.

• As a source of agreed rehypothecation

Provides a protection mechanism for mAsset to maintain a stable anchor. When deviating from the anchoring and insufficient mortgage occurs, the platform will remove the unanchored assets, and buy mAsset by selling MTA and destroy it to make the mortgage sufficient. This is similar to what MakerDAO does with MKR when it is under-collateralized.

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Footprint Analytics - MTA Token Price

Is minting mAssets superfluous?

The development of new things will go from simple to rich, and the breakthrough after the development reaches the bottleneck must return to simplifying. The purpose of the user is nothing more than to obtain higher returns in a simple way. Is it unnecessary to mint a new stable currency in mStable by spending gas fees on the already held stable currency, or is it the progress of the application of stable currency?

The launch of mStable stems from seeing the bloated user experience caused by the various protocols in the DeFi market, and wanted to make a more stable, safer, and more convenient stablecoin, but there is still a long way to go in terms of performance in all aspects:

• From the perspective of safety and stability, the price of mUSD is obviously more volatile than the bAsset mortgaged in its basket. Since most of the underlying stablecoins are centralized stablecoins, mUSD will still be subject to the risks of centralization. Given that the current algorithmic stablecoins are far less stable than fiat currencies and over-collateralized stablecoins, the risk of de-anchoring may be greater if the algorithmic stablecoins are added.

• From the perspective of convenience, mUSD is still missing on many head protocols, and its original intention cannot be realized in use cases.

• From the perspective of the depth of the swap pool, mStable has established two pools, USDC/mUSD and WETH/mUSD on Balancer, and will become the first and fifth largest pools in 2020 through double token rewards. However, with the reduction of rewards, the depth of mStable's pool on Balancer has gradually shrunk.

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About Footprint Analytics:

Footprint Analytics is a one-stop visual blockchain data analysis platform. Footprint assisted in solving the problem of data cleaning and integration on the chain, allowing users to enjoy the zero-threshold blockchain data analysis experience for free. Provide more than a thousand tabulation templates and a drag-and-drop drawing experience, anyone can create their own personalized data chart within 10 seconds, easily gain insight into the data on the chain, and understand the story behind the data.

Footprint Analytics official website: https://www.footprint.network

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The above content is only a personal opinion, for reference and communication only, and does not constitute investment advice. If there are obvious understanding or data errors, feedback is welcome.

Copyright Notice:

This work is original by the author, please indicate the source for reprinting. Commercial reprinting needs to be authorized by the author, and those who reprint, extract or use other methods without authorization will be investigated for relevant legal responsibilities.