What Is mStable USD (MUSD)?
mStable USD is an autonomous and non-custodial infrastructure for pegged-value crypto assets. The protocol was created to address three major problems. Significant fragmentation in same-peg crypto assets (there are currently at least 5 major USD pegged crypto assets on Ethereum, for example). mStable provides a solution to these three problems through the creation of meta-assets, which are fully backed by a diversified basket of existing tokenised same-base assets.
mUSD is the first meta-asset that was introduced by mStable. mUSD is USD-pegged crypto asset in its own right, backed by a basket of selected USD stablecoins. The assets currently underlying mUSD include. Each asset within the basket has a set of max and min weights. Currently, these are set to 5% and 65%. This means that no single asset could make up more than 65% of the basket nor less than 5%. This is to protect the basket assets in the very unlikely case of a depeg of the underlying.
mStable USD Storage Key Points
|Coin Name||mStable USD|
|Circulating Supply||41,085,970.46 MUSD|
|Source Code||Click Here To View Source Code|
|Explorers||Click Here To View Explorers|
|Twitter Page||Click Here To Visit Twitter Group|
|Whitepaper||Click Here To View|
|Official Project Website||Click Here To Visit Project Website|
Meta-assets are minted or redeemed on-chain via the mStable smart contracts, which are non-custodial. This means that no third party ever takes custody of a user’s assets. In other words, mStable is a “peer to pool” protocol, where the pool “lives” in a non-custodial smart contract.
Each meta-asset represents a share of liquidity in the underlying asset pool and is a pegged-value crypto asset in its own right. A meta-asset can be used as a medium of exchange, unit of account and store of value.This addresses fragmentation in same-peg crypto assets by providing an single meta Asset per peg which unifies any number of underlying same-base assets.
Each meta-asset is designed to produce an outsized native interest rate when deposited in mStable USD Save contracts. This rate is derived through the mStable contracts autonomously and programmatically lending underlying assets to third party lending protocols, generating interest income. The mStable contracts simultaneously allow for underlying assets to be exchanged or “swapped” for a fee. All interest and exchange income is automatically and programmatically sent to savers.
mStable USD issues assets that are designed to be more secure than the sum of their parts. Each meta Asset diversifies risk between different asset issuers and stability mechanisms, and caps exposure to any one asset. In the future mStable could offer protection against the peg-loss of an underlying asset through use of the protocols native governance token to re-collateralize meta-assets.
Minting new mUSD by depositing one or more whitelisted USD stable coins into the underlying pool and receiving mUSD in return. This can be achieved in the mStable App on Ethereum or Polygon through the Swap functionality.
The mStable USD protocol is governed by holders mStables native Governance token, MTA, who vote on proposals to make important decisions about the protocol.Every participant who interacts with mStable has the option to earn MTA either through staking, for providing liquidity (through Feeder Pools or third-party protocols) or by saving mUSD or mBTC through mStable’s Save contract. MTA is emitted in this way to facilitate decentralised, collective and user-driven governance. MTA can be staked on mStable for participation in Governance and for rewards distribution.
Using mStable Feeder Pools to exchange supported USD stable coins assets for mUSD. This option is also provided through the Swap functionality in the mStable App on Ethereum or Polygon. Deposit your mUSD into the mStable Save contract to receive interest-bearing imUSD which can also be deposited into the mStable “Vault” to earn MTA rewards.
Aside from minting mStable USD or mBTC to utilise in DeFi or generate yield with mStable’s Save, there are a number of other important use cases for the mStable platform which each contribute to the ecosystem mStable’s liquidity pools are used to facilitate efficient Swaps between pegged crypto assets, contributing swap fees to savers.
Arbitrageurs can take advantage of arbitrage opportunities within the mStable pools, generating swap fees and rebalancing the weights of assets in the pools in the process mUSD or mBTC can also be used to provide Liquidity in Feeder Pools to earn fees while supporting additional on ramps to mStable assets from other same-base assets.The next section provides details of each asset created by mStable.