Proposal: mStable Treasury Swap

The purpose of this document is to provide a high level summary of mStable for the proposed treasury swap.

Proposed swap high level notes:

  • Tokens to be held for a minimum of 12 months.
  • Exchange rate set by a 30 day moving price average.
  • Target acquisition size of 250,000 MTA tokens.

1. Utility to Threshold DAO

Joint Marketing

Feature:
This would be the first treasury swap for the Threshold DAO and signal to other DAOs we are open for business.

Benefits
Joint marketing campaign.

Staking in governance.

Feature:
MTA tokens can be staked to vote with the mStable Emissions Controller to direct emissions to the tBTC v2 Feeder Pool.

Benefits:
Increases the APY that TBTC holders can earn. Participation in governance earns MTA rewards (~14%).

Currently the tBTC v2 Feeder pool receives approximately 0.25% of rewards.

Purchasing 250,000 tokens would buy sufficient vote weight to increase that to approximately 3%. Note that this would change with additional partner staking.

Assuming constant price and reward allocations it would take approximately one year for the initial investment to be distributed as rewards to stakers in the feeder pool. Note that this is a ballpark calculation and excludes any increase in vote power from staking.

MTA Staking Notes:

  • Vote weight receives a multiplier based on time staked and quests completed.
  • 3 week cooldown period + 2 week unstaking window.
  • Withdrawal fee of 7.5% for the first 3 weeks that decays over 48 weeks to 0%.
  • Earn a share of monthly staking rewards (approximately 20% APY).
  • MTA staking rewards unlock over time
  • MTA rewards for feeder pool vaults
    • 1/3 of MTA rewards are claimable immediately
    • 2/3 of MTA rewards are streamed linearly after 26 weeks

2. Utility to mStable

Staking to generate additional income for the DAO

Feature:
T tokens could be staked to generate revenue for the mStable DAO Treasury either in the coverage pool or as a network operator.

Benefits:
Diversification of DAO income streams.

Joint Marketing

Feature:
This is an opportunity to build on the existing partnership with shared governance and treasury diversifications.

Benefits
Joint marketing campaign.

3. mStable Summary

The mStable community independently added a tBTC v2 feeder pool, see the proposal and forum post.

Feature Details
Fully Diluted Tokens 100,000,000
Inflation none
Emissions See Spreadsheet
Circulating Supply 28,505,551
Audits Consensys Diligence, Bramah Systems, Certik, PeckShield, DeFi Safety: 97% Score
Fees 0.02% swap fee between stable assets. 0.02% redemption fee from mUSD or mBTC to the underlying assets.
Features You can earn by putting mUSD or mBTC into the save vaults.
Protocol Risks Permanent loss of the peg for one of the assets in the basket.

4. Comparable Treasury Swaps

Balancer DAO treasury swap. On the 13th of December 2021 20,000 BAL tokens were swapped for 334,000 MTA with a 1 year hold time.

4.1 mStable DAO Summary

Staking PCV

Feature:
Asset Management SubDAO to explore liquidity provision opportunities on the 80/20 BAL/WETH Pool on Balancer Protocol.

Benefits:
Treasury diversification. LP fees.

Staking in Governance

Feature: Leverage Balancer Protocol to direct emissions and incentivize liquidity in its pools.

Benefits: Increase APY for mStable pools on Balancer.

4.2 Balancer DAO Summary

Staking in governance.

Feature:
MTA tokens can be staked to vote with the mStable Emissions Controller to direct emissions.

Benefits:
Increases the APY for Balancer pools. Participation in governance earns MTA rewards (~14%).

FAQ

Q: How are token prices determined?
A: Global average price as recorded on CoinGecko for the day in question.

Q: What day does the 30 day moving price average start?
A: Once the proposal has been passed in both DAOs.

Q: What date does the token hold period begin?
A: On the date that tokens are exchanged.

Q: Why not do a larger transaction?
A: This is the Threshold DAOs first treasury swap and will be a learning experience. If the swap proves successful and governance power in mStable generates the expected value for members of the Threshold Network DAO then the treasury would evaluate putting forward a second swap to accrue additional gauge weight.

Q: Can the quests in mStable to increase vote weight be done by the DAO?
A: Yes this can be completed with Wallet Connect.

2 Likes

Global average price as recorded on CoinGecko for the day in question.

CoinGecko systematically misprices (underprices?) T since it does not account for the T - ETH Curve pool, which is currently the primary market for T.

I couldn’t see an easy way to get the historical data from Curve.

If we allow a week on the forum and then a week to vote, CoinGecko should correctly price T after Binance has T available for trade on the 25th

Distribution of T will be completed by 2022-02-25 03:30 (UTC) at the latest before trading of T is opened.

We could allow a couple of extra days to allow for things to settle?

1 Like

Snapshot vote
https://snapshot.org/#/threshold.eth/proposal/0x43973b3527eb404bddf7d34fda8218251f991ee1ee3925f8a6600951d1a46ea9