Summary
This proposal seeks approval to list mBASIS as a collateral and borrow asset on Euler Base market. This addition will provide users with access to an innovative, delta-neutral yield-bearing strategy, enhancing the diversity and utility of Euler’s Base market.
Motivation
About mBASIS
mBASIS is a tokenized basis trading strategy designed to deliver yield across varying market conditions. By dynamically allocating notably across BTC and ETH perpetual futures, mBASIS generates consistent yield without taking on directional market exposure. Managed by a licensed asset manager, mBASIS integrates professional risk management with the composability and accessibility of DeFi.
Why mBASIS on Euler Base?
- Institutional-Grade Strategy: Provides Euler users with access to a professionally managed, delta-neutral strategy that generates yield in bull and bear markets.
- Enhanced Liquidity: Increases the utility and adoption of stable assets and other tokens within the Euler Market on Base.
- Composability: Integrates seamlessly into Euler’s DeFi ecosystem, offering users new opportunities for collateralized borrowing and lending.
Risk parameters
Loan-to-values (LTVs)
- LTV for borrowing RWA assets with mBASIS: 0.90
- LTV for borrowing ETH-denominated assets with mBASIS: 0.80
- LTV for borrowing BTC-denominated assets with mBASIS: 0.80
- LTV for borrowing mBASIS with RWA assets: 0.90
- LTV for borrowing mBASIS with ETH-denominated assets: 0.80
- LTV for borrowing mBASIS with BTC-denominated assets: 0.80
Supply & borrow caps
Given those parameters are correlated with the liquidity profile of the assets, here is a summary of mBASIS’ liquidity:
Acquiring mBASIS
mBASIS can be atomically minted seamlessly with no minimums when acquired with stablecoins like USDC.
Daily atomic limits are evolving alongside the TVL and are set at 10m mBASIS per day.
Asynchronous minting is also available, processed as soon as possible, and may take up to 7 days.
Redeeming mBASIS
mBASIS can be atomically redeemed for USDC seamlessly with no minimums.
Atomic redemptions occur through the mBASIS redemption vault. This smart contract endpoint provides investors access to two atomic liquidity sources:
- Direct redemption using USDC set aside within the mBASIS redemption vault.
- Redemption via mTBILL liquidity providers: Midas partners with providers who maintain on-chain mTBILL token reserves for mBASIS trades. These mTBILL tokens are then instantly redeemed for USDC through mTBILL’s deep liquidity pool.
Asynchronous redemption is also available and usually takes about 7 days.
As of January 28, 2025, the instant redemption capacity stands at 2.85m USDC, with 923k USDC on Base representing over 25% of the circulating TVL.
The protocol aims to maintain instant liquidity at 10% of mBASIS TVL, with a 24-hour replenishment capability (see the “redemption capacity over time” report)
Permissionless liquidation
mBASIS functions as a permissionless token that can be liquidated seamlessly, ensuring smooth operations and eliminating bad debt risk. This frictionless redemption process makes mBASIS particularly attractive for lending protocols.
Independent Oracle
The mBASIS price oracle updates weekly and requires approval from both Midas and Ankura Trust (the verification agent) before updates are propagated on-chain, ensuring decentralized control. This dual-approval system helps guarantee that mBASIS values accurately reflect the portfolio, strengthening trust and transparency for Euler Base Lenders and the broader DeFi ecosystem.
Caps Suggestions
Based on mBASIS’s liquidity profile, we suggest an initial supply cap of 5,000,000 mBASIS and a borrow cap of 2,000,000 mBASIS.
Interest rates
- Target utilization: 0.25
- Target APY: 7%
- Max APR: 90%
Governance
Given Euler’s recent move to an optimistic governance framework, no formal on or off-chain voting is required for this proposal to pass. However, we encourage the Euler DAO and community members to provide feedback, share suggestions, and voice their opinions on this initiative. Community input will, as always, be crucial to ensuring that the Euler Base market remains relevant, competitive, and risk-managed.
Implementation
Unless any concerns are raised or the DAO would like more time for consideration of this proposal, the mBASIS market on Euler Base will be implemented by the Euler Foundation.