mStable (MUSD) is an effort to create better stablecoins or same-peg crypto assets.
mStable is an autonomous and non-custodial infrastructure that supports pegged-value crypto assets. They built mStable to solve three problems, fragmentation in the stablecoin sphere, lack of yield from stablecoins, and lack of protection from permanent capital loss in pegged crypto assets.
Consequently, mStable is developing a new class of same-peg crypto assets they call meta-assets. A diversified basket of tokens or same-base assets will back the same-peg crypto assets.
mAssets or mStable (MUSD)
They call mStable (MUSD) a peer-to-pool protocol that lives in a non-custodial smart contract. Hence, they will mint or redeem meta-assets in non-custodial smart contracts. They claim meta Assets are redeemable for underlying assets.
Theoretically, each meta-asset represents a share of liquidity in an underlying asset pool. Yet each meta asset is a pegged value crypto asset in its own right. They claim you can use a meta asset as a medium of exchange, a unit of account, and a store of value.
The hope is the meta-assets will prevent stablecoin fragmentation by providing a single Meta asset peg to unify underlying same base assets.
mStable (MUSD) Yielding
They claim each-meta asset can produce a native interest rate when you deposit it in mStable’s Save Contracts.
Individuals can receive the rate by autonomously and programmatically lending underlying assets to third-party lending protocols. The hope is this will generate interest income.
Plus, you can swap mStable contracts for underlying assets for a fee. They claim mStable can automatically and programmatically send 90% of interest and exchange income to savers.
They claim each meta-asset can diversify exposure between asset issuers and stability users. The hope is that mStable can cap exposure to assets at 50%.
The mStable Tokens
Holders of mStable’s native governance token, MTA, govern the mStable protocol by voting.
Everybody who participates in mStable can earn MTA by staking or providing liquidity through Feeder Pools through the Save Contract. To explain, the Feeder Pools are third-party protocols. Users provide liquidity by saving mUSD and mBTC tokens.
To elaborate, the mUSD is a same-peg crypto asset built on the Ethereum (ETH) blockchain that contains Tether (USDT), USD Coin (USDC), DAI (DAI), and sUSD (SUSD) stablecoins. Hence, mUSD is a stablecoin they back with other stablecoins. Another version of mUSD built on the Polygon POS-Chain contains USDT, USDC, and DAI stablecoins.
The mStable Ecosystem
In contrast, the mBTC is an Ethereum same-peg crypto asset that cointains tokenized Bitcoin (BTC). In other words, mBTC is a stablecoin backed by various tokens that contain Bitcoin. Currently, mBTC contains renBTC, WBTC, and sBTC.
They claim mUSD can generate yield with Save, facilitate efficient pegged-crypto asset swaps, and contribute to savers. Plus, mUSD could create arbitrage opportunities within pools by generating swap fees and rebalancing the weights of assets. Additionally, they claim mUSD and mTBC can provide liquidity in feeder pools with same-base assets.
mStable products include an mStable Automatic Market Maker (AMM) that swaps Bitcoin (BTC) assets and stalbecoins with low slippage. AMMs build markets. Save offers earn yield powered by decentralized finance (DeFi) lending markets and swap fees. MTA provides governance.
mStable’s backers include DeFinance Capital, Alameda Research, Three Arrows Capital, DACM, Antony Sassano, Kain Warwick, Eric Conner, Zhuoxun Yin, and Andrew Kang.
What Value does mStable (MUSD) Have?
They claim mStable’s ecosystem offered an all-time volume of over $7 billion, $36.7 million in Total Locked Value and a 882 active governors on 11 October 2022.
Conversely, CoinMarketCap named mStable the 395th largest cryptocurrency, with a 99.01₵ Coin Price on 11 October 2022. CoinMarketCap gave mStable (MUSD) a $40.679 million Market Capitalization, a Fully Diluted Market Capitalization of $40.679 million, and a 24-Hour Market Volume of $11,162 on 11 October 2022. They base those numbers on a Total and Circulating Supply of 41.086 million MUSD.
In contrast, CoinGecko gave mStable a $1 Coin Price, a $27.191 million Market Capitalization, and a 24-Hour Trading Volume of $273,063 on 8 October 2022. They base those numbers on a Circulating Supply of 27.180 million MUSD. CoinGecko ranked mStable as its 568th ranked cryptocurrency on 11 October 2022.
Unfortunately, no CoinMarketCap data for mStable BTC (MBTC) is available because it is an untracked cryptocurrency. However, CoinBase gave MTBC a $39,205.56 Coin Price on 8 October 2022.
However, CoinGecko gave the mStable Governance token or Meta (MTA) a 9.9₵ Coin Price, a $4.925 million Market Cap, a $586,163 24-Hour Trading Volume, a $9.859 million Fully Diluted Market Valuation, and a $36.690 million Total Value Locked on 11 October 2022. They base those numbers on a 49.953 million MTA Circulating Supply, a 100 million MTA Total Supply, and a Maximum Supply of 100 million MTA. The Meta (MTA) was CoinGecko’s 1138th ranked cryptocurrency on 11 October 2022.
Is mStable (MUSD) a Safe Stablecoin?
I consider mStable a derivative or synthetic asset because other stablecoins back it. However, mStable could offer more liquidity because of the feeder pools.
I think there will be a high demand for synthetic assets such as MUSD because of the high price of the US dollar. For example, the Euro was trading at 97₵ to the US Dollar on 11 October 2022. Similarly, the Rupee was trading at 82.83 to the US Dollar on the same day.
Consequently, I think many people will move their savings into US Dollar based investments. Many of those investors will turn to stablecoins and other synthetic assets to access the dollar. Hence, there will be a strong demand for synthetic assets, such as mStable (MUSD).
All speculators need to examine mStable (MUSD) and competing products such as Vai (VAI) and Synthetix’s sUSD (SUSD). I think we will see an enormous boom in such products as the dollar rises, and other currencies sink.
Furthermore, I think the political and economic chaos the Ukraine War is unleashing will derive demand for same-peg crypto assets. Speculators need to examine mStable and similar products in order to profit from that demand.
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