ARC: Listing proposal of mStable assets: mUSD and imUSD

Listing proposal of mStable assets on Aave: mUSD and imUSD

To the Aave community, the mStable genesis team would like to submit a new ARC asset onboarding proposal for two mStable assets: mUSD and imUSD.

mStable is building autonomous and non-custodial stablecoin infrastructure, and leverages lending income with trading fees to produce higher yielding, more capital efficient assets. It was created to tackle three major issues facing stablecoins today:

  • The fragmentation of same-peg assets
  • The lack of native yield
  • The lack of protection against permanent capital loss

About mUSD and imUSD

mUSD is a diversified meta-stablecoin that tracks the US dollar. It is available and liquid on Curve and Balancer and is increasingly being integrated across the broader DeFi ecosystem: 1inch, ARCx, Rari Capital, OpenDAO’s Open Market and many more.

imUSD is a tokenised and composable representation of mUSD deposits in mStable’s Save v2 contracts, a best-in-class savings account for DeFi. We envision imUSD would only offered as a collateral option on AAVE, and not be used for borrowing.

mUSD is currently only supported on CREAM’s Iron Bank.

imUSD is not yet supported on any major lending markets.

Benefits of adding mStable assets on Aave:

  • Diversification of stablecoin assets: mUSD is a meta-stablecoin with risk minimisation characteristics and censorship resistance. Adding mUSD would decrease aggregate risk in the Aave ecosystem
  • Once mUSD support is live, ~7M mUSD could be deployed from mStable’s Save v2 contract to seed the market for borrowing, increasing Aave’s TVL.
  • imUSD would be the first collateral yield bearing asset (pure USD yield) to become available for use on Aave.
  • Pave the way for future mStable assets on Aave: We have just released mBTC, and intend to release other stablecoins such as mEUR and mETH in future. mUSD and imUSD integration would set the stage for further collaboration between mStable and Aave’s ecosystems in future should that be desirable for the Aavengers.

Useful links

Audits/Security reviews:

A full list of our audits and security reviews can be found here in our docs https://docs.mstable.org/protocol/security#auditing

Risk Score

We are happy to defer to the Risk team to evaluate mUSD and imUSD, but after an initial assessment of the Aave’s risk framework we feel they would sit somewhere between C to B-

Thanks for your consideration Aave community! We look forward to hearing your responses.

Added Specifications:

What is the link between the author of the AIP and the Asset?
Part of the Genesis team.

Provide a brief high-level overview of the project and the token

mStable is a protocol that unites stablecoins, lending and swapping into one robust and easy to use standard. It is governed and secured by a protocol token, Meta, and is used to create “mStable assets”, which are tokenized representations of some value peg, such as USD in this case. The mUSD stablecoin can be used by a holder to earn interest from locking it in the “SAVE” section of our app, which resembles traditional savings accounts.

Explain positioning of token in the AAVE ecosystem. Why would it be a good borrow or collateral asset?

mUSD brings a risk minimised meta stablecoin not only with a large number of native yield farming opportunities but also with the ability to convert it into the underlying. This produces demand and also gives borrowers the opportunity to reduce the pressure on other leading stablecoins by borrowing and then converting to the underlying. (In addition to all the points we mentioned on forum etc)

Provide a brief history of the project and the different components: DAO (is it live?), products (are they live?). How did it overcome some of the challenges it faced?

mStable was begun in Melbourne, Australia, in late 2018. It was initially designed to address the fragmentation of stablecoin markets and the challenges to adoption and use that arose from this.
On July 18th, 2020, 2.66 million MTA were sold in an open public auction. The proceeds of this auction were collectively pooled in the mStable DAO.

In terms of challenges faced, one I think worth highlighting is raising capital for a “defi” project before DeFi was a prominent investment thematic. We overcame this by operating very lean, and focusing on the code above all else.

Another challenge would be balancing the shipping product at a fast pace, whilst managing security. We do this through multiple strategies such as consistent audits, guarded launches, and a bug bounty program on immune.fi.

How is the asset currently used?
mUSD is currently used as a stablecoin and lending asset. When saving mUSD in the SAVE section of the app, the asset converted into imUSD, a high-yield bearing token. This whole process is completed autonomously by mStable’s smart contracts and the user interacting with those smart contract.
mUSD is in the few cryptodollars offering reduced risk and volatility in the DeFi space.

Emission schedule: None. It is minted from underlying.

Token permissions and upgradability: Upgradability is performed through a 5/8 gnosis safe multisig, with some core team, and some external industry experts. In addition, there is a 1 week delay between when the upgrade is proposed and when it can be executed - giving users the chance to opt out from an upgrade. In addition, changes are only made after they have been proposed and voted on through snapshot. Learn more about mStable’s governance over our medium posts titled: Governance Update.

Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)

Contracts date of deployments, number of transactions, number of holders for tokens
mUSD token deployed: https://etherscan.io/token/0xe2f2a5C287993345a840Db3B0845fbC70f5935a5

5.1K holders
230,852 transactions

Market Cap

$48,219,278

24 Hour Trading Vol

$1,819,241

24h Low / 24h High

$2.28 / $2.47

Circulating Supply

20,718,805 / 100,000,000

Fully Diluted Valuation

$232,731,944

Max Supply

100,000,000

17 Likes

It is worth noting 2 other positive circular effects resulting from a potential listing of mUSD:

  1. mStable is set to create and incentivise feeder pools for mUSD, which are 50/50 pools composed of [fAsset, mAsset], e.g. [bUSD, mUSD]. These pools are expected to be deeply liquid, and the assets in which can and will be lent out wherever possible to increase pool APY. Which an active market for mUSD, there is potentially 10’s of millions of liquidity waiting to be deposited here in the short term.

  2. mStable has been an avid liquidity provider to Aave since Aave was at $5m TVL. Over the course of the past 6 months, assets in the mUSD basket have been lent on Aave markets. Adding mUSD as a market on Aave will only have a positive effect for mUSD overall TVL, and thus will provide not only more mUSD deposited through the SAVE contract (as mentioned by Fauve above), but also from the underlying mUSD collateral (USDT, sUSD and TUSD).

It is also worth considering how an efficient market could cause more positive circular effects with the ability to borrow mUSD at a reasonably low rate through Aave, and the opportunity to earn high yield through deposits into mUSD’s savings account.

9 Likes

100% in support. Mstable has been a friend to Aave and Aave to mstable for a long time now.

This initiative is a natural fit and of mutual benefit to both.

10 Likes

Fully support this.

  1. imUSD - passive interest bearing. (Stable that increases in value)
  2. mUSD - Basket representation of stables
  3. MTA - mstable token.

imUSD is very cool and it would be the first collateral source that keeps going up in value as it passively accrues interest.

8 Likes

100% support this. Can only show my reiterate the great points made above.

4 Likes

I am in full support of adding Mstable.

4 Likes

I am in full support of this initiative.

4 Likes

mStable are OG’s. They’ve got a quality stablecoin derived from a basket of stables and are doing very interesting things with their mBTC asset. Their team have consistently been building throughout 2019, to the August DeFi mania, all the way to now. To not take this proposal into consideration would be actively avoiding more TVL into AAVE due to the pure amount of hype, interest, trust, and value mStable has generated for DeFi.

Don’t bet against them.

3 Likes

Fully support this. Let me know if I can help

4 Likes

I fully support this proposal, which I see as a win-win for Aave and Mstable in our increasingly interconnected DeFi ecosystem.

4 Likes

fully 100% in support. Mstable has been a support to Aave and Aave to mstable for some time now.

with DEFI on the raise great to see colab

4 Likes

Mstable is a MUST. Fully support.

3 Likes

Definitley support the integration of mUSD/imUSD, its a no brainer

3 Likes

Fully support this proposal

2 Likes

Win-Win…Let’s do it!

2 Likes

Completely support this proposal!

2 Likes

Fully support. Benefits both Aave and mStable. mUSD decreases peg risk and encourages capital efficiency.

1 Like

mUSD good project… id love to see it on AAVE

2 Likes

I fully support this

1 Like

Aave :handshake: MTA

1 Like