“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