mUSD - Strategic Pivot for Protocol

This topic has come up before, but would breathe new life into the protocol. It would essentially be our own version of DAI/MIM but within Terra ecosystem, allowing users to borrow a stablecoin at 0% interest for leverage within the terra ecosystem. Now that there is astroport we could incentivize UST/mUSD in the stable invariant pool. To keep the peg strong we could shift a majority of MIR emissions over to that pool to incetivize liquidity. This would allow users to go levered long on stocks, as well as go levered long on aUST (basically a degen box without ever leaving Terra). By simply listing this asset and redirecting emissions it would be a huge strategic pivot for the benefit of MIR holders.

If we don’t like the idea of more degenbox behavior, we could choose to not have aUST as collateral for this specific mint. It would still add a ton of value to the Terra ecosystem to have a debt based stablecoin native to the Terra chain.


Any thoughts on how to regulate the amount of mUSD issued? Abracadabra and Alchemix both throttle the issuance of their stablecoins in order to help maintain the peg

Honestly I would love to see it moderated through a dynamically set interest rate, informed by peg. So if its at peg zero percent interest, but if it goes below peg interest rates ratchet up exponentially to increase demand for the currency, if above peg a negative interest rate is charged. I imagine this is a bigger undertaking though as the current mAssets don’t appear to have an interest rate parameter. However, maybe this should be introduced to all mAssets to help them get closer to peg. This could be more effective than using the short farming and would reduce need for MIR emissions.

Another idea… do we think Band Protocol is equipped to do US CPI? That could be better for multiple reasons…

  1. It’s slightly less desirable to short (a degen box is less profitable here)
  2. It doesn’t compete with UST
  3. Frax is launching their own FPI soon. If we have mCPI we can export the product to other chains (which on the back end drives demand for UST).

being able to long a stock using aUST is my number one issue! we need to get this solved immiediately. It would greatly affect people who want to build long term portfolios on mirror

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