Ecosystem

๐Ÿ”„ Contributing mStable assets on DeFi Apps earns you Meta

Part of what makes DeFi so powerful is its composability. In DeFi, lending services, derivatives markets and exchange functionality can be mixed and matched with tokenised assets to create novel systems and applications.

Our ecosystem rewards aim to incentivise users to contribute mAssets to this broader DeFi ecosystem.

MTA will be paid to users that โ€˜lock-upโ€™ their mStable asset in utility generating services, such as liquidity and lending pools. The remaining 25% of the open rewards pool has been allocated to this incentive.

Much like the Minting rewards, tranche amounts are increasing in the first year, then gradually decline over time.

Ecosystem rewards (in blue) over time vs. Minting rewards

Example

After our user minted 1000 mUSD in the previous example, she can earn further rewards for contributing to the DeFi ecosystem by depositing her newly minted 1000 mUSD into an approved DeFi app. For this example, our user will deposit all of her mUSD into a lending service at 5% APY.

mAsset contributions to any of these DApps are weighted equally in terms of rewards (ie. a 1000 mUSD contribution to a lending, derivative or liquidity market will earn an identical amount of MTA). As users can add and withdraw funds as they wish, the monthly Ecosystem reward pool tranche is paid out to users based on a time weighted value.

Our user locks her mUSD in Compound for 15 days (half the time of the 30 day tranche window), before withdrawing it to spend. The ecosystem reward pool for this tranche is 100,000 MTA, and across three DeFi apps 500,000 mUSD in total has been contributed by mStable users in the form of mAssets over the month.

Our user's Meta reward can be calculated with the following equation:

reward=(ta/TA)โ‹…Rreward = (ta/TA)โ‹…R

where:

  • t = Time user's mAssets are locked in a DeFi appยน

  • T = Total reward tranche time (1 month)

  • R = Ecosystem reward tranche amount

  • a = Amount of mAsset user contributes to ecosystem platform(s)

  • A = Total mAsset volume contributed by all users to DeFi apps over tranche windowยฒ

Substituting our values in, we can calculate our user's rewards

reward=(15โ‹…1000)/(30โ‹…500,000)โ‹…100,000=100reward = (15โ‹…1000)/(30โ‹…500,000) โ‹… 100,000 = 100

After 15 days, our user is eligible to claim 100 MTA in rewards.

  • Cost: Gas, opportunity cost

  • Rewards: 0.14mUSD in interest on Compound, 200 MTA payout with 1 year lockup.

Footnotes

  1. This example quantifies time in days for simplicity, when implemented time measurement will be more granular (ie by blocktime)

  2. Also a time weighted value