How to Earn Interest Saving Stablecoins with mStable

Transcript

hi everyone this is d5 dad so today i'm going to show you how to use a new application called mstable m stable allows you to mint musd which is it is a stable coin that is essentially a basket of other stable coins so we've got true usd dye usdc and tether keep in mind what you're looking at here is my own dashboard so these reflect how much this reflects how much dye and usdc i have in my own wallet not what's actually in the pool but the idea behind it is that with these stable coins if the dollar peg would ever fail on one of them it would be pretty disastrous

for anyone holding that stable coin and so what has been proposed as a better way to hold stable coins is to hold a basket of them and in this case again that's referred to as musd so if we go to the swap function this is really like the utility that is driving uh m stable aside from that you know basket of stable coins anyone can come here uh connect their metamask or whatever wallet is that you use and you can uh trade at zero slippage one to one between stable coins so i can go from true usd to die the only thing i'm losing here is a zero point one percent

fee so on a hundred on a hundred uh dollars or stable coins i am uh losing ten cents and so that's that's one thing that folks might just end up using this for there's 4.3 million dollars of liquidity in this right now and so someone could come in here and just trade between coins however i will say caveat to this is that this just launched i think in the last month and uh one of the drawbacks to this is that it's going to be difficult to keep uh these ratios more even or to in this case keep die supplied because when you can trade one to one

um there's a lot of arguments to go back and forth here but i mean long story short uh there's less of an incentive to provide die here when it's it's clearly more in demand and so right now i would argue that if anyone were to deposit die into this pool as a liquidity provider there's a good chance it's going to get sucked out by another liquidity provider who's going to withdraw that but i think in the long term if this works out it's really really powerful because who doesn't want one-to-one stable coin swaps instead of having to see that rate fluctuate a bit and know that you're losing a bit when you go between these different

stable coins that are supposed to be one dollar each so what i'm going to do today is i'm going to show how to mint the musd token then i'm going to show how to save it so i'm going to earn this native interest rate of 28.34 and then in the future i will show how to uh earn the the new governance token mta it stands for uh meta so that's the governance token that's being distributed uh weekly by the m stable team they're distributing 50 000 of these meta tokens it's very similar to the way compound works very similar to the way balancer works

okay so this is my dashboard i i haven't minted any musd yet but once i mint with some dye or usdc or both i will have musd and if i were to save that i could then earn the native interest rate with metastable okay so i'm now going to mint some musd and i'm going to do it with just my usdc i'm going to do 25 usdc so let's go ahead and first thing i'm going to do is give approval for the app to move my stable coins and we're going to go ahead and edit this because i want to see if i can get

the transaction fee lower so i'm checking per usual i'm checking eth gas station dot info on my phone it looks like currently the lowest gas price is around 22.1 gway so this would have not pushed through my transaction i think so i'm going to move this to maybe 23 way okay the other part of this is i don't want to give unlimited permission to move my tokens just in case someone maliciously got control of these smart contracts so i'm going to change this to just 25.

notice it was essentially at unlimited before so that that to me is very very dangerous okay that's it so we've got a lower gas price we've got permission to move 25 usdc we can hit confirm all right cool so i've gotten confirmation here that i've approved uh i've approved the m stable app here to to move my usdc so now i should be able to mint by clicking here i'm just going to double check here again so i'm starting with a balance of 0 musd i'm minting 25 musd using 25 usdc and if you if you had

wanted to mint with other tokens here you just flip the switch here and then you would have those different amounts specified so here's my my meta mask okay so i am just checking each gas station dot info one more time looks like the prices are still the same so i'll put this up at 23 or 23 gwai um i want to note something here that i'm about to pay about two dollars in

gas and i would say that normally i'm working with a little bit larger amounts of stable coins so you just want to think about like what am i ultimately earning here and how much am i paying in that gas because if this in this case with 25 uh stable coins i mean i have to earn back now at least two dollars in interest before i break even and two dollars divided by 25 is 8 so the interest rate is higher here but again i think it's just mindful to think about how much gas you're paying and how that

ultimately eats away into my profits okay so we just got confirmation i've minted my 25 musd okay so now that i've minted my musd i'm going to go ahead and earn the native interest rate which is around 28.34 over the past seven days so that's cool that's really high and uh despite the smart contract risk in using this despite the fact that the pool is drained of dye and so if i want dying in the future here uh i'm probably not going to be able to get it

just because it looks like other liquidity providers are actually pulling that out as soon as died deposits i'm going to go ahead and approve this and then i'm going to have a second transaction that's going gonna actually spend or i guess save my musd in the app so we're going to allow it to move my musd tokens i'm gonna adjust the gas per usual and currently the eth gas station dot info says that 23 way will get it done i'm going to also check the permission

here i'm going to set the permission uh at i guess 50 here just for now again i just don't like leaving anything as unlimited all right i i gotta say i love this part of the m stable um user experience or whatever the ui whatever you want to call it i love the the confirmations it's really nice and i don't see that in a lot of defy apps so you can see here even below you approve the musd save contract to transfer musd it's beautiful crystal clear exactly what i'm doing i'm ready to now deposit my 25 musd oh one other thing here i'm going to

reject this a moment i just noticed something here you're depositing 25 musd this amount can be withdrawn at any time without a fee okay cool i just saw a fee and was wondering what that was always good when there is no fee all right i'm gonna bump this up to 23 gway and it's going to cost me 57 cents and there we go so i'll be back once this confirms but that's it that's how easy it is for me to deposit stable coins convert them into uh this musd and then use the native interest rate of of

m stable all right there we go so transaction is confirmed uh really cool to see it all actually work and i think the last thing i want to do here is just go to the the dashboard and so we can see now actually let me go ahead and refresh this to see if this updates very cool there we go so i did have 25 musd i minted it from 25 usdc the musd represents a basket of these

four stable coins that can be swapped one to one by others that use the swap or like trading feature and then i'm earning uh interest or i think another way to think about it is i am earning like a market making fee um just because traders are paying a small amount of you know money for each one of those swaps between stable coins so if i were to go to uh the save function here we go we just flip that to withdraw and i could say i'm going to withdraw it

all so i'm not going to do that right now i am going to leave it and uh let's pretend let's pretend that i did withdraw my 25 musd from this uh interest earning save function i would then take the musd here and this is where i could ultimately redeem my musd for uh however much i want of these stable coins so good good to you know just be aware about how to get out of this ultimately i don't like to put money into something without knowing how i can ultimately get back out of it so that's everything i've got for you

today on mstable uh just a reminder this is a very new application they are in beta which the word beta is always uh um it's it's unclear what exactly is beta versus alpha versus ready for anybody to use it but that means there's always smart contract risk and so if there were a bug discovered here that i always think of the worst case scenario would allow someone to drain funds that means that my you know my 25 musd would be uh at risk here so i'm always thinking i need to be very careful and think about if this money were lost would i be able to

move on from that but otherwise i'm happy to take on that risk because i think that there is a lot to earn here from trying to earn 30 percent about 30 apy another thing i i'm not exactly sure what sort of admin key risk is here i'm betting and guessing that there is most teams have a pause function and they have other sorts of um other sorts of things they can do with an admin key so uh that's another thing i need to be concerned about uh we already talked about the liquidity crunch i guess is what you might call it in here the fact that uh

when you look at the breakdown here of the different stable coins there is no dye at this point or it's almost zero percent so that's another thing like i if i were to deposit dye which i deposited usdc but if i deposited die probably not going to get back that die using this uh but that's all the risk i can think of right now i hope this is helpful and let me know if you have any questions you