Staking

⚙️ Meta Governors earn MTA to compensate them for their work, responsibility and risk

What?

To incentivise sound decision making, Meta Governors are paid when mStable grows securely and partially liquidated as part of Re-collateralisation.

To participate as a Meta Governor, holders must stake their MTA. MTA holders who choose to stake their MTA would be partially liquidated in the event of a Re-collateralisation. In return, those who stake are rewarded for their risk in redemption fees that the platform collects.

This staking reward will be a floating value, derived from platform redemption fees and the amount of MTA staked. We expect the staking return to increase as the mStable platform matures, with return approaching an equilibrium that reflects the perceived risk of a re-collateralisation event taking place, opportunity cost of that MTA, and some liquidity premium.

Example

Our user has 1000 Meta that they wish to stake. As soon as this user stakes their Meta, she begins to earn rewards from redemption fees on the platform. Her staked Meta entitles the user to a share of fees equal to their portion of MTA staked relative to the total amount staked. Our user stakes her 1000 MTA over a month, with 1 million MTA staked in the total system, during a month where 50,000 MTA in fees are collected from mAsset redemptions. She calculates her return with the following formula:

return=s/SFmreturn = s/S ⋅ Fm

where:

  • s = amount of MTA staked by user

  • S = Total amount of MTA staked in the system

  • Fm = MTA denominated redemption fees collected over the month

Substituting our values in, we can calculate our user's staking return:

return=1000/1,000,00050,000=50return = 1000/1,000,000 ⋅ 50,000 = 50

Our user staked 1000 MTA for a month, and received a 5% monthly return (c.80% implied annual ROI) for doing so.

  • Cost: Gas, opportunity cost of MTA

  • Risk: partial liquidation in event of a bAsset losing its peg

  • Reward: Staking return (c.80% annualised)

*It is worth noting that since the amount of MTA staked in the system, return will be dynamic, changing in response to MTA being staked and withdrawn. Our example assumes a fixed amount of total MTA staked in the system for simplicity.

Contents
What?
Example