Summary
This proposal seeks approval to list mEDGE and mMEV as a collateral on Euler Yield market on Ethereum. This addition will provide users with access to an innovative, yield-bearing strategy, enhancing the diversity and utility of the Euler Yield market on Ethereum.
Motivation
About mEDGE and mMEV
Both tokens are designed to track delta-neutral DeFi crypto yields, aiming to maintain a balanced exposure to the market while generating returns. This strategy seeks to adapt to various market conditions by leveraging opportunities with optimized risk-reward profiles.
Why mEDGE and mMEV on Euler Yield?
- Institutional-Grade Strategy: Provides Euler users with access to a professionally managed, appealing delta-neutral strategy.
- Enhanced Liquidity: Increases the utility and adoption of stable assets and other tokens within the Euler Yield market.
- 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 stablecoin assets with mEDGE or mMEV: 0.90
- LTV for borrowing ETH-denominated assets with mEDGE or mMEV: 0.80
- LTV for borrowing BTC-denominated assets with mEDGE or mMEV: 0.80
Supply & borrow caps
Given those parameters are correlated with the liquidity profile of the assets, here is a summary of mEDGE and mMEV’s liquidity:
Acquiring mEDGE or mMEV
They can be atomically minted seamlessly with no minimums when acquired with stablecoins like USDC, USDT or DAI.
Daily atomic limits are evolving alongside the TVL and are set at 10m per day.
Asynchronous minting is also available, processed as soon as possible, and may take up to 2 days.
Redeeming mEDGE or mMEV
They can be atomically redeemed for USDC seamlessly with no minimums.
Atomic redemptions occur through their respective redemption vault. The smart contract endpoint provides investors access to two atomic liquidity sources:
- Direct redemption using USDC set aside within the mEDGE and mMEV redemption vault.
- Redemption via liquidity providers: Midas partners with providers who maintain on-chain token reserves fulfilling atomic redemptions.
Asynchronous redemption is also available and usually takes about 2 days.
As of February 13, 2025, the instant redemption capacity stands at 940k USDC for each token
Midas aims to maintain instant liquidity at 10% of a token TVL, with a 48-hour replenishment capability (see the “redemption capacity over time” section).
Permissionless liquidation
mEDGE and mMEV function as a permissionless token that can be liquidated seamlessly, ensuring smooth operations and eliminating bad debt risk. This frictionless redemption process makes those tokems particularly attractive for lending protocols.
Oracle
The token prices update weekly. The portfolio appraisal is performed between Midas and the risk manager (respectively Edge Capital and MEV Capital). Price updates are propagated on-chain weekly, with the objective to increase the frequency over time. This approach guarantees that mEDGE and mMEV prices are accurately reflecting the portfolio.
The portfolio is transparently shared at midas.app.
Caps Suggestions
Based on the existing liquidity profile, we suggest an initial supply cap of 5,000,000 mEDGE and 5,000,000 mMEV.
Governance
Given Euler’s 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 Yield market on Ethereum 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 mEDGE and mMEV tokens on Euler Yield will be implemented by the Euler Foundation.