CIP#21 - mUSD as a 5th Meta Pool


See discussion regarding Meta Pools here. This post is to discuss adding a 5th Meta Pool with mUSD.

“Metapools allow for one token to seemingly trade with another underlying base pool. This means we could create for example the following pool: [mUSD, [3Pool]].”

“In this example users could seamlessly trade mUSD between the three coins in the 3Pool (DAI/USDC/USDT). This is helpful in multiple ways:”

“* Prevents diluting existing pools”
“* Allows Curve to list less liquid assets”
“* More volume and more trading fees for the DAO”


mStable USD (mUSD) is a meta stablecoin, backed by a basket of assets (currently USDC, DAI, TUSD and USDT) and governed, protected and incentivised via Meta, the system token. mUSD caps exposure to any one stablecoin through max weights, and protects against failure of any of the underlying assets. mUSD also has a native yield through SAVE which has helped it scale successfully over the last few months (see stats). mStable’s goal is for mUSD to be the reliable base layer to the emerging DeFi system, and intends to scale substantially over the next few years while delivering the required technical pieces of the protocol.

I believe adding mUSD as a (5th?) Meta Pool stablecoin would be great (both in short and long term) for Curve, with no risk exposure to a new market of liquidity and volume, and great for mUSD, who would in turn help incentivise and promote the pool.


This proposition brings major utility to both mUSD and Curve. Currently mUSD suffers from lack of market depth with stable pairs, causing slippage on the on/off ramps of mUSD (currently Balancer is the most efficient for this). Listing mUSD on Curve would allow for the most efficient mUSD swaps and in turn naturally direct its trading volume to the platform.

There are concerns that Meta pool tokens would not provide enough incentive for liquidity. mStable has long had active yield farming pools (see EARN) and would be highly incentivised to direct a large portion of the MTA rewards to encourage deposits on the Meta pool. This would drive both liquidity and trading volume to Curve (& CRV holders).

In addition, with mUSD listed on Curve, the mStable protocol team now have a place to rely on efficient mUSD trades, which can be baked into the dApp and protocol wherever deep liquidity is necessary in the future.


Additional liquidity and volume/revenue for Curve and CRV holders with the addition of a provably liquid asset, capitalising on mStable’s existing yield farming mechanism


Moar tokens on the UI



I’ve heard about this project back in the summer and it sounds interesting.

Some questions coming to my mind :

  • As a “meta-coin” backed by a basket of stablecoins, is it more similar to another stablecoin or more similar the curve LP token DAI+USDC+USDT token itself ? (not sure if this question counts when creating a metapool). I am wondering if mStable should meta-trade against the upcoming yDAI+yUSDC+yUSDT[...] pool instead.

  • Now I am not very familiar with how mUSD SAVING feature works. Is it similar to the compound pool of Curve ? Do you get any dmUSD tokens in return ? If yes, maybe those should be in a Curve pool instead of the “raw” mUSD ? (so they would generate interest)

If also feel like mStable shares a lot with Curve and am wondering if they either compete or complete each other. But I guess this is not relevant to the choice of adding a mUSD pool or not.

Hey there. In answer to your questions:

  • There are definitely parallels to the Curve LP token, however the native yield is earned through the leveraged SAVE feature, and not baked in to the LP token (keeping it at $1). We also prioritise security of the mUSD token and cap risk/provide extra collateralisation value in the system. In those respects we are likely more comparable to other stablecoins.
  • Interesting. Yes it works similar to cTokens. Yes certainly the interest bearing dmUSD would be good, although currently the SAVE contract does not produce a token in return. This was by design, as the primary focus is on bootstrapping the mUSD tokens utility as a stablecoin in its own right (comparable to DAI and the DSR).

Regarding competition, there are points on both sides. We compete in terms of stablecoin liquidity and trading volume (although currently have much different AMMs), but have different ends in sight - Curves focus is providing deep & efficient on chain liquidity, where ours is providing robust and usable stable assets that are intended to be used as a base layer collateral instrument.

What would the effects be of trading against the yPool instead?