Basket Adjustment

⚖️ mStable can alter bASSET maximum weights according to new market conditions or information.

Governance controls the addition/removal of bASSETS and sets their maximum weights.

A Basket Adjustment occurs when Governance chooses to change the maximum weight of a bASSET.

Secondly, a basket adjustment can occur when a bASSET is deemed unfit for inclusion. In this case, Governance can purge that bASSET entirely.

Standard Basket Adjustment

Occurs when:

  • A bASSET'S max weight is changed by Governance.

The basket adjustment mechanism allows Forging and Swapping demand to do the heavy lifting:

  • Minting validity remains the same. This means that if Governance lowers the maximum weight of a bASSET so that it is below its current collateral level, minting is temporary disabled with this bASSET until it is below its maximum weight.

  • The weight is lowered through allowing free swaps into that bASSET and only allowing multi-proportional redemption.

  • Users are not allowed to swap out of an overweight bASSET.

Adding bASSETS

Governance has the power to add bASSETS to a mASSET contract and dictate its maximum weight.

Removing bASSET

The removal of a bASSET is deemed complete when its collateral level and max weight = 0. See Expedited Rebalance below.

Expedited Rebalance

It may be deemed necessary by Governors to expedite an adjustment and ultimately remove a bASSET entirely. This will be possible through liquidating the given bASSET through a two phased auction mechanism described in Re-collateralisation.