mStable made the announcement in a blog post on April 27. It added that it chose the Polygon platform, formerly known as Matic.

The launch offers another source of USD and BTC liquidity, a purpose-built DeFi-native savings account, and two meta-stablecoins.

mStable is the latest in a lengthening list of DeFi protocols migrating to or launching versions on Layer 2 networks. The primary reasoning behind this is to avoid the congestion on the Ethereum network.

Hybrid stablecoins launched

The protocol essentially unites stablecoin, lending, and swapping into one platform governed by its native token, MTA. It uses a collection of autonomous, decentralized, and non-custodial smart contracts built on Ethereum it issues mStable assets called mAssets.

The platform also has an automated market maker. This gives liquidity providers the option of minting a risk-minimized mAssets or a yielding tokenized savings account (imAsset), backed by a diversity of crypto assets.

Polygon was chosen for its high-throughput capabilities. It also has strong links to Ethereum and the ability to attract liquidity from big names in DeFi like SushiSwap.

The launch introduces a meta-stablecoin called mUSD. It’s backed by DAI, USDT, and USDC. These will all be programmatically lent to Aave’s Polygon deployment—which has already attracted over $1 billion in collateral.

A swap function will allow users to swap between the three stablecoins with virtually no network fees. mStable’s Save accounts will also be available on Polygon.

There are more offerings in the pipeline including totally free transactions through a platform called Biconomy. This bridge will connect mStable liquidity from ETH Layer 1 to Polygon. It also includes strategies to incentivize liquidity called feeder pools.

MTA token price update

The stablecoin protocol’s native governance token, MTA, has traded relatively flat over the past 24 hours. It’s gained just a percent or so, currently trading for $2.44 according to CoinGecko. It reached a local high of $4.75 in early February of this year.

It’s never been able to reclaim the all-time high of $11 in late August 2020, however, and is currently languishing 78% down from that peak.

Protocol liquidity currently stands at $58 million according to DeFi Pulse which also reports that total value locked (TVL) hit an all-time high of almost $75 million in August 2020.