Integrations

The external DeFi protocols mStable builds on and how they fit into the system.

mStable combines the strengths of proven DeFi protocols into simple, automated token products. Each integration plays a specific role in the strategy stack.

Ethena (sUSDe)

What it is Ethena issues USDe, a synthetic dollar backed by a delta-hedged perp strategy. When staked, it becomes sUSDe, a yield-bearing stablecoin that distributes funding and staking rewards.

Why mStable uses it

  • Provides a credible, yield-bearing stablecoin as the base layer.

  • Yield from sUSDe is the foundation that mStable builds on with Pendle and Aave.

  • Adoption and liquidity of sUSDe are growing rapidly.

Risks

  • Funding dependency: relies on perp market funding rates.

  • Depeg risk: if USDe diverges from $1.

  • Protocol risk: Ethena contracts and hedging mechanics.

Learn more: Ethena Docs

Pendle Finance (PTs)

What it is Pendle splits yield-bearing assets into two parts:

  • PT (Principal Token): redeems 1:1 at expiry.

  • YT (Yield Token): claims the yield until expiry.

mStable focuses on PTs. By buying PT sUSDe, you lock in a fixed yield until maturity.

Why mStable uses it

  • Turns floating yield into fixed, predictable returns.

  • At PT expiry, bots roll into the next series to keep exposure continuous.

Risks

  • PT liquidity can thin out near expiry.

  • Slippage during rollover.

  • Reliance on Pendle contracts.

Learn more: Pendle Docs

Aave

What it is Aave is a lending market where users can deposit collateral and borrow against it.

Why mStable uses it

  • PT sUSDe is deposited into Aave as collateral.

  • Bots borrow USDT, convert back into PT sUSDe, and redeposit.

  • This looping increases exposure up to a target ratio (~7.5x).

Risks

  • Liquidation: if health factor falls.

  • Borrow caps: access is limited when markets fill.

  • Oracle risk: Aave price feeds.

Learn more: Aave Docs

dHEDGE Infrastructure

What it is dHEDGE provides the underlying smart contract architecture that mStable builds on.

Why mStable uses it

  • Battle-tested contracts used by other managers (Toros, dHEDGE vaults).

  • Modular design to plug into Pendle and Aave.

  • Non-custodial, permissioned automation layer for bots.

Risks

  • Smart contract dependency.

Learn more: dHEDGE Docs

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