mStable is one place that comes to the mind when there is a need to combine stablecoins with lending and swapping. Although there are similar protocols that offer this, mStable promises to be much better than the others.
mStable is understood in different ways because of it cuts across several applications. It brings tokenized assets together so that people can trade and borrow. In addition, it is believed to be a source of encouragement to both present and potential stablecoin users. There are claims that slippage swaps do not exist. mStable gives interest to those who have retained their mStable assets for some time .Apart from lending, users can have a say on the future of the protocol.
With mStable, investors have been privileged to use the token called mASSET to do carry out orders on tokenized assets. The value of one mASSET corresponds to that of its primary asset which may be paper money, virtual currencies, stocks, and indices. mASSETS were designed to depend on the value of some tokens. This attribute makes the token useful for savings. Two other main functions of mASSETS include minting and swapping.
More profits are available to mStable holders who want to help the mUSD/USDC Balancer pool to grow.
CEO, James Simpson, was the first person that made the world know that there was something called mStable in February this year. mStable is being handled by a Berlin-based software firm known as Stability Labs.
mStable was meant to correct the anomaly that was brought about by stablecoins. They include:
· Splitting of assets even though they come from one source.
· High demand for native yield vs little available for supply.
· Account spamming and hacking
As more and more people keep joining DeFi, the debate on which token should be preferred gets hotter. Stablecoins primarily serve to backup the value of the US dollar but apart from this, tokens should still have other purposes to fulfill apart from serving as a backup to the value of USD.
Besides, it is risky to decide on one token because if anything bad happens, it will be all loss. Trying to maintain the value of an asset and keeping it fixed for a long time has some disadvantages that can ultimately lead to the loss of the asset. But when these assets are brought together to represent one thing under mASSET, the risks are reduced and the system is made to last longer.
mASSETs were created to SAVE, MINT, and to SWAP. Each of these functions shall be explained but before then, it is important to explain what bASSET means. bASSET literally means ‘basket asset’ or the opposite of mStable. It is a unit of mASSET.
One mASSET can be used to mint without giving out collateral. One bASSET can go for one mASSET so users who want mASSETs can accumulate their bASSETs. As an illustration, 20 USDC can be used to get 20 mUSD.
There are profits for those that mint mUSD and other mASSETs. The present rewards will soon be reviewed upwards.
The mASSET contract has a provision known as ‘Redeem’ for undoing the command to mint. In such a situation, the users who have changed their minds can decide on the bASSET to get in return while the mASSET is later on seized from circulation.
Some bASSETs can be replaced for an equal amount of another bASSET. For these supported bASSETs, there is no limit to the amount you want to swap so long as weight requirements are followed. Nevertheless, you should expect a fixed charge for any swap you want to do.
If users should get bASSETS equal to the amount they are swapping, it is important to sustain the equilibrium. This made mStable to start up what it called maximum weights for every bASSET, which means each bASSET contributes a fraction to the entire mASSET and it should not be exceeded. However, if it is exceeded, the regulations are changed for minting, swapping ,and redeeming so that the equilibrium can be maintained. As an illustration, if the fraction of a bASSET allowed is 0.45 and this is reached, any other activity around other mASSETs is modified so that this fraction is not exceeded. The bASSET contribution will reduce once again and the whole system reverts to normal.
There is no mASSET that does not gain profit on mStable. The profits made depend on how each bASSET performs and fees paid for operations. Profits are made when mStable lends bASSETS to DeFi companies looking for liquidity such as Compound Finance and Aave. The fees incurred while swapping to these platforms are paid by those that own the mASSETS. As a result, those who own mASSETS have a share of what mStable generates as profits. mASSETS that are not used for savings can be channeled into buying and selling offline. mStable has brought all these measures into play so that its users can smile more often to the bank than their contemporaries in other DeFi companies.
mStable has its own token which it called Meta (MTA). The token was created for three basic needs:
· To be the place where re-collateralization starts from
· To take decisions through voting
· To make mASSET liquidity more robust
In mStable, re-collateralization becomes essential when a bASSET no longer correlates with 1 USD. If that happens, the governors decide on withdrawing it. The governors use their MTAs to buy back the mASSET that supported the bASSET so that they are burned until what is left corresponds to the others in the basket. This is how the re-collateralization will be done by the time the second phase of mStable is introduced.
mStable governors are those who use their MTAs to take decisions that affect the whole system including modifying risks. Because their MTAs are at stake, they earn when bASSETS are swapped or redeemed. Some key decisions mStable governors take include:
- mASSETS that should stay or leave
- bASSETS that should stay or leave
- Fees for operations
- General upgrades.
In a bid to encourage the usefulness and availability of mASSETS, mStable released 20 million MTAs into a pool for rewards. To gain some of these MTAs, a user can decide to lock some mASSETS so that mStable can use them for business such as lending for interest. Depending on the quantity of mASSETS each user locks, MTAs will be accumulated every month. Those who take part early in this will enjoy more interests for more than one year but the rewards will reduce as the released MTAs gradually finish.