[Proposal] Take a MTA position to redirect rewards to Balancer Pools

Hi, Balancer community,

I’m Théo, core-contributor at mStable.

mStable is a Decentralised Stablecoin Ecosystem composed of a capital-efficient AMM and a high-yielding savings account product.
I am reaching out today to discuss a partnership opportunity arising from the upcoming launch of our Emission Controller.


mStable is about to release its version of the Gauge controller, inspired from Curve’s, which will dictate rewards distribution over the next 5 years (~35m MTA).

As we speak, two Balancer pools are receiving MTA rewards:

  • One on Mainet [MTA / WETH Balancer pool]
  • One on Polygon [MTA/WETH/WMATIC Balancer pool]

Balancer & mStable have been maintaining a long-standing relationship: mStable was one of the first user of Balancer in August 2020 and had the biggest pool at some point there.


We thought it would be highly beneficial for Balancer to take on an MTA position and vote for those pools, thus directing higher rewards that will inevitably attract more liquidity to the pools.

This is an opportunity to go a step further with shared governance and treasury diversification while bringing significant extra TVL to Balancer. It is also a nice way to do a joint marketing campaign highlighting both protocols


We see several options to do this:

  • Buy MTA on the open market
  • Buy discounted MTA through the current Olympus Pro Bonds offering
  • Contemplate a DAO<>DAO token swap for the purpose


  • mStable will be emitting 35m MTA over the next 5 years. The amounts redirected per pool will be proportionate to votes
  • Balancer could opt to stake their MTA. They would be then eligible for subsequent boosts in MTA rewards, following this scheme. In addition, staking would give Balancer the opportunity to become a delegate and get some additional votes (i.e extra MTA reward) due to Balancer strong brand awareness in DeFi.
  • In the case of a swap, the MTA from the mStable Treasury DAO would be exchanged for the equivalent USD value of BAL, using the 20 days smooth moving average price at the time that voting ends. Currently 1 BAL = 13.6 MTA. Price feed will be [[BAL/USDT] (Chainlink) and [MTA/ USD (Chainlink)

Why now?

  • MTA is cheap and when the launch of the Emissions Controller will lead to a lot of competing interests. Getting an early exposure to MTA right now could be a smart economic bet
  • The 500k MTA / Olympus Pro-Bond Program will expire in 6 weeks. It’s an ideal opportunity to buy some MTA at a discount
  • The Convex /Curve way of getting inflation is becoming very competitive and unaffordable. This would be a cheaper way to make pools more attractive

Happy to hear your thoughts about this and answer any questions you might have


Really appreciate you taking the time to write this up. It says the max payout on the bond is 9000 MTA - is that just per tx? Never bonded with OHM before so forgive the noob question :sweat_smile:

I am very interested in further exploring this proposal. What would be your preferred option in terms of forming the partnership?

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Love the idea and appreciate how mStable has been a consistent and long-time partner of Balancer (since the early days of our V1)!

BTW I’m also really interested in your implementation of the Gauge controller as this could be one of the foundations for the implementation of Balancer’s BPT locking mechanism already approved by governance.

Regarding the 3 options, I would probably lean towards the DAO<>DAO token swap as it’s probably the simplest/cleanest and we have recently the precedent of other such swaps that were well received by Balancer governance.

Curious to hear more opinions =)


Thanks a lot for your comments on this
Addressing here @DavisRamsey @Xeonus and Fernando remarks

About Olympus Bonds
Indeed, the max you get per bond (i.e per tx) is 9k MTA as you get to buy only one bond at a time. We’re at the moment discussing with the Olympus team to see if we could raise this 9k upper limit.

Side note on multiple bond purchases
If the current bond is still vesting, buying another bond of the same type will reset the vesting period. This means any unclaimed rewards from the previous bond, vested or otherwise, will start vesting from period 0 again.

Prefered partnership
In that framework, considering the tradeoffs as well as our longstanding relationship, we think a DAO2DAO swap would be the best option


Hi guys,

Echoing Theo here (I’m from the mStable team too), that we’re excited by this proposal and think it brings long term synergies to both projects. @TheofromStable has answered the outstanding questions, but I’ll be here too to help with responses.

As a signer of the mStable Treasury DAO, I’m inclined to think a token swap would be beneficial. I’m happy to give more context on how mStable currently handles its operations, protocol, and treasury management processes via its DAOs at present if need be.


I too think DAO<>DAO is the best option. Buying on the open market, depending on size, is going to cause the price to run up unless you really spread it out. The bonding mechanism would be a fair amount of operational overhead on our side with that 9k limit. Leaving DAO<>Dao as the most feasible option.

Unless I breezed past it, we’re you suggesting an amount of MTA that you were looking to exchange in this arrangement?

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Hey @TheofromStable & @jwpe! Thanks for taking this initiative and doing the write-up. I recently created the DAO Agreement Process as part of the Balancer Grants DAO to streamline agreements between DAOs. I would be happy to jump on a call with you and some other folks from mStable to move this potential DAO Agreement forward and collaboratively fill in the DAO Agreement template.

Please take a look at the DAO Agreement Process here.

Feel free to continue using this thread. If you have any questions that aren’t answered in the DAO Agreement Process feel free to ping me on Telegram or Twitter @LuukDAO!


Thanks a lot for your answer @LuukDAO. I just took a look at your gDoc and I’m starting to fill it up as we speak.

@zekraken The question of an amount of MTA suggested is still open and pending on our side, I will have some news on this later today or tomorrow.

I’m happy to hear anyone’s suggestion on an amount/range Balancer could consider swapping.


Hi @DavisRamsey @Fernando, Xeonus, zekraken and Balancer team,

On a side note, we filled and shared the Partnership Agreement BalancerDAO gDoc with Luuk.
Here are a few thoughts from our side on how we could perform the DAO2DAO token swap

Amount & rationale

We think swapping between $300k and 500k worth of MTA against the equivalent USD value of BAL (using the 30-Day VWAP) is an amount that reflects both our longstanding relationship and the strong optimism we feel towards the BAL Token. This amount would offer real treasury diversification for both protocols as well.

Brief overview of benefits

  • Taking an MTA position would allow Balancer to redirect MTA inflation towards its pools via the upcoming mStable Emission Controller. This will inevitably attract more liquidity and strongly increase the Protocol TVL
  • This would be a cheap and opportunistic way of making the pools more attractive, without using the currently very competitive Convex system
  • Balancer could opt to stake their MTA. They would be then eligible for subsequent boosts in MTA rewards, following this scheme
  • This is an opportunity to go a step further with shared governance as well as a nice way to do a joint marketing campaign highlighting both protocols

Timeline & process

The mStable Emission Controller will be officially launched next Monday. We don’t want to miss this opportunity nor the momentum of the launch and would hope a DAO2DAO token swap could occur before the end of the year.

We have drafted a first version of a timeline.

  • Before Friday 3rd of December → Discussion and agreement on the swap amount and terms, government proposal published on both sides for the DAO2DAO swap allocation
  • Monday 6th of December → Government proposal vote live on both forums
  • Monday 6th of November → mStable Emission Controller Launches
  • 13th of December → End of both proposal vote, hopefully successful
  • From Dec 13th onward → Tokens can be swapped on-chain

We know this is quite an aggressive timeline but we think we think moving fast with governance could give Balancer an actual lead position on the first Emission epochs.

Happy to hear your thoughts about this and to answer any questions with jwpe

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Hi @TheofromStable,

sorry for coming late to the conversation.

I’m a big fan of Mstable myself so very happy to see this partnership going forward.

What is a token swap number you would consider acceptable? personally I would lean towards a 50kBAL (again, personal opinion).

Thanks for your answer
Hope the above will help answering :slight_smile:

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15-20k BAL seems fine to me. Is Luuk going to handle posting the proposal to MTA or did you already do that?


I agree, the 20k range seems like a good starting point. Look forward to the union.


@DavisRamsey @zekraken
Thanks a lot for your interest and your support in this.
This 15-20k BAL range is a very good starting point indeed

On the mStable side
We’re preparing an RFC on our governance forum as we speak, hoping to turn it into an official proposal on Friday and then a vote on Monday

On the Balancer side
We’ve filled Luuk’s gDoc, how should the swap proposal be handled governance-wise?
Will the Balancer team publish a proposal? Is there anything else expected from our side?

we should try to vote at the same time (have the votes end at the same time). price is locked in at the time the vote ends. unless there’s another idea that’s been floated around how to do that.

Let’s see what @LuukDAO thinks about how to proceed as this is kinda his area. I’ll drop a poll around proceeding with 20k BAL.

  • Proceed with DAO2DAO swap for 20k BAL
  • Do not proceed (state why in a reply)

0 voters


Hey @DavisRamsey @LuukDAO

Thanks for the poll and the timeline alignment.
Things are running smoothly on our side: we just published the RFC on our forum with the 20k BAL figure so that people can comment until Friday. We expect the vote to follow

Regarding the pricing method, we would lean on a 7-days VWAP as it would eliminate price risk and smooth-out price volatility. Open to discussing this.

Looking forward to making this happen, let me know if you need anything from our side

7 day vwap at the time the vote ends right? the Fei swap we did used 20 day smooth moving average, which I could pull up on my tradingview chart and confirm the pricing. what’s the source you use for 7 day vwap? or is that functionally the same as 7 day smooth moving average?

Also, I’m not sure we can vote this weekend. @LuukDAO hasn’t chimed in on whether his role in this is complete or not. We might need to give this another week and aim for next weekend.

@TheofromStable and the mStable team has started filling in the agreement here:Partnership Agreement BalancerDAO <> mStable - Google Docs

In the proposal, a 30-day VWAP is suggested. Looking at the volatility of both tokens over the past weeks, I think a 30-day smooth average is better at smoothing out price volatility.

Are there any other comments we would like to resolve besides locking in 20K BAL and deciding between the 7-day or 30-day average?

If all comments are resolved the next step would be updating the agreement with the definitive numbers and posting this for vote ideally next week Monday to align this with a potential vote by the mStable DAO.

I’m curious whether there are some mutual use-cases we would like to implement or explore with the BAL / MTA or another token pair. A potential mUSD stable pool might make a lot of sense.

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@DavisRamsey @LuukDAO
The 20 or 30-day smooth average is great at smoothing out price volatility, both definitely work for us. Regarding the timeframe, the end of votes makes sense.

Keen to explore other additional mutual use-cases like an mUSD pool. Let’s talk about that on different channel :slight_smile:

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