How to Farm the Meta (MTA) Token with mStable

Transcript

[Music] hi everyone this is d5 dad this is going to be a tutorial on the new meta token which is a governance token from the m stable team so i've previously done tutorials on mstable the last time i was focused on how you can actually mint a basket of stable coins referred to as musd and

then how you can save that with the native interest rate on the mstable app so you can see here i have i had minted 25 musd i saved it and now it is earning about 24.23 percent averaging the daily ap wise over the last seven days so that's powerful but what's coming is this governance token and so some of the highlights i want to walk through here first off uh the pool next wednesday july 15th at 1400 utc is going to uh be initiated in the balancer pool for

this mta token so it'll be two point basically 2.7 million mta tokens along with 400 000 musd uh just a reminder musd is equivalent to a dollar or equivalent to one of the four stable coins that m stable handles and so that has an implied value then of 15 cents uh per mta token and that's based on the fully diluted mta market capitalization of 15 million us dollars so so far all pretty simple i'm really only just calling this out just because

i think it doesn't make a whole lot of sense to mine for the mta token unless you have a sense of what it might be worth and so the value here based on that balancer pull that kicks off actually you know allowing folks to be able to gain exposure to this mta token starts at 15 cents uh another thing to keep in mind is that you are able to next wednesday you would be able to actually buy that mta token but i'm going to focus here today on how do i actually earn the mta token currently though you can swap musd with ether or musd with usdc in balancer

so here is the balancer pool you can see that it's 50 musd 50 usdc and i am currently a liquidity provider with basically 12 and a half musd and 12 and a half usdc so the purpose behind this mta token uh there's three major points here and i think most of them are pretty standard in terms of like what would this token uh be used for in terms of its utility so first off uh mta there's going to be a staking mechanism so when we look at the m stable app there's currently mint musd you can save and earn the native interest rate you can swap tokens which

is really the whole point of this app is to enable one to one zero slippage swaps between uh true usd uh tether dye and usdc and then lastly of course redeem is if i wanna basically burn my musd and get back whatever stable coins are in the pool uh there will be a fifth tab that is earn earn would mean that let's pretend that i have been let's pretend that i've earned some mta by being in the balancer pool here and then i can choose to use the future earn tab to stake and so i'm basically putting up that collateral and it's there

to uh it's there to act as like a contingency plan if the underlying collateral which is one of the four stable coins fails and so this would help us to keep the musd peg and then future m stable assets uh which i'm really not aware of what assets those will be but they claim that there's more assets coming other than musd uh okay so that's that's one so that that'll be a new option coming with this mta token to to earn more of it but also you are my understanding is that if you were to stake that you would be risking that it could be used to to

re-collateralize musd if there were some sort of black swan event and one of the four stable coins failed okay then next up is uh it's used up for decentralized governance super standard stuff just means that folks who hold meta the mta token will be able to vote on all system parameters cool and then the last one is uh this kind of goes hand in hand with the governance utility this helps to bootstrap liquidity and m stable so people are incentivized to right now be a liquidity provider in this balancer pool with musd and usdc because they will earn the mta token it's

very similar to the concept that we've all become familiar with when we look at the comp token uh one other detail i found here is 20 million mta will be emitted via ecosystem rewards to directly incentivize those that provide resources to bootstrap the minting of m-stable assets and to fund their liquidity and utility that means that there is going to be a total supply of 100 million mta eventually their 20 million of that 20 will be used to incentivize liquidity providers like myself in the balancer pool now although i've minted musd previously

which allowed me in the m stable app to use the save function to earn the native interest rate that is currently 24.23 i'm gonna basically start fresh here with balancer because this is a completely separate activity for me to earn the mta token and i'm gonna be able to earn a proportion of the 50 000 mta tokens that are distributed weekly to the liquidity providers in this balancer pool and so this pool has about 18 million in liquidity and whatever proportion of that liquidity i own which in this case is just about 25 25 divided by 18 million is what i would

earn of the 50 000 mta tokens which works out to about let's double check and see what it is 25 divided by 18 million multiply by 50 000 multiply by an implied value of 15 cents per token and i'm earning about one cent a week okay so you get the point i've i've got a very small amount of money here but uh i think it's important to think through those numbers ahead of time and decide whether or not this is worth someone's time to you know become a liquidity provider okay in order for me to become a liquidity

provider in this pool first off i've already done this but you would click here to connect to a wallet and so it could be portis a wallet connect compatible wallet or in my case it's metamask okay so once i've connected my wallet i'm gonna go ahead and click on add liquidity and this is where in uniswap i would normally have to think about having an equivalent portion of musd and usdc because this pool is 50 50 usdc and musd and so i might

you know click here and if i hit maximum and i've got 50 usdc it indicates i need 49.98 musd the good news for me is that there is a really convenient option here to deposit a single asset so i click on that and i do have usdc i'm going to deposit another 25 usdc and when i do that it's going to split my 25 usdc 5050 so that it'll come out as about 12 and a half musd and then 12 and a half usdc and then it'll get added to the pool and hence my my share of the liquidity has grown and

which allows me to earn more of the mta token so i'll go ahead and unlock the usdc token and just the usuals this is the first of two transactions so i'm gonna click edit to check what the gas price is that looks good according to the eth gas station dot info this transaction will push through just fine and then i'm going to check what permission i'm giving i want to give permission to only move 25 usdc uh it's just a preference of mine because i don't like giving unlimited approval in case somehow someone got uh malicious control of these smart

contracts they could technically then move any of my usdc in my wallet and that's it we're good to go so i'll hit confirm here and we'll be back in just a few minutes once i'm ready for the second transaction okay i'm back about five minutes later the usdc approval transaction has gone through one thing i might have missed in the last screen share there is i want to make sure that i click this before i had highlighted the musd but once you click this aside from the fact that i clicked this to unlock my usdc i then can specify how much i'm going to deposit and if i were to have not clicked the

little unlock button what would happen is when i put in the 25 here and i click add liquidity it would prompt me to to work through that first approval transaction so it's pretty um it's pretty dummy proof okay so let's click add liquidity all easy now that we've given approval to move 25 musd or i'm sorry usdc let's go ahead and check my gas one more time or my gas price so currently gas prices okay it's just a little bit higher i'm going to put it through at 21.

actually let's do 22. okay there we go so i'm going to pay uh 22 gway which is totals out at a dollar 40. uh just uh noting that despite the fact that i'm doing this more as like an experiment with small amounts i think it's very important that you always know what you're paying here and think about am i going to earn more interest here or earn more yield with mta token than a dollar forty and if the answer is less then this probably doesn't make sense for someone all right i'm back just a minute later

the transaction has gone through you can now see that instead of a total of 25 uh dollars of liquidity i now have a total of 50 of liquidity so that's 25.13 musd 25.14 usdc the balancer pool here took my 25 usdc and then it split it into half usdc half musd and so now i own a little bit more of the pool which is great because now it means that i can earn double as much mta as i was earning before

so that's really it uh unless i was wanting to get out of this position in the future which would require me just to go here and click on remove liquidity where i could say hey let's remove 100 of it i could go about it that way i'll end up with 25 musd 25 usdc i could also choose to exit the pool in one asset so it's basically the reverse of what i just did want to highlight just a few risks before i go so first off there's smart contract risk i'm exposed to the smart contracts of balancer and to m stable because i'm

using the musd token the other thing is i would be slightly concerned if someone came in and traded millions in usdc for musd that could cause me impermanent loss if i were to then exit the pool right after that because it would it would uh definitely do damage to the one-to-one like trading ratio between musd and usdc at least until some someone came in and helped to restore that balance so that's something else but it's quite an edge case that i really shouldn't have to be too worried about another thing is i i am always concerned

about admin keys and you know governance risks so balancer does have a you know a balancer token uh and so that bal token uh that is used now to vote on upgrades and proposals to the balancer protocol and so that's something else i guess i would think about but again i'm not too worried about that okay so that's all i've got for you today i hope this is helpful just as a recap i am earning three different forms of yield so as a liquidity provider and balancer i'm earning a portion of this 0.05 pull swap fee which can be applied then to the trading volume so 0.05 percent of in this case 270 000

of trade volume today is what the fees were and then i'm earning uh a smaller fraction of that of course because i only own fifty dollars in a nearly 18 million dollar liquid pool another thing is uh i am earning the mta token so again that'll be the new governance token and that should have an implied value of 15 cents at least to start until buyers and sellers step in and then they can decide depending on how much they buy or sell what the price is next week and then the third form is the balancer governance token so once a week i will automatically have the bal token

sent to my wallet according to how much liquidity i'm providing on balancer uh other than that let me know if you have any questions i hope this is helpful and i'll see you next time [Music] you