mStable V2

mStable V2 is no longer the legacy multi-stablecoin AMM described by earlier research. Its current Ethereum product is mPT-sUSDe: an automated vault that deposits Pendle PT-sUSDe into Aave, borrows USDT, converts the proceeds into more PT-sUSDe and redeposits it, with bots targeting about 7.5x looped exposure and handling rollovers. The DefiLlama endpoint reported about $3.10M on 2026-08-15. The v1 leveraged-looping dossier controls because liquidation, rate, oracle, maturity and automated-deleveraging risk are integral to the live product, regardless of size.

Review triggers: events that reopen the verdict
• Ships a separately named product whose contracts prevent borrowing and recursive redeposit, with current positions, authorities, incidents, capacity and proposed-size stressed redemption independently verified

Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-15.

The research file

Current product and mechanism

mStable says its late-2025 relaunch deliberately focuses on one product, the mPT-sUSDe Pendle vault, rather than the legacy basket AMM. The integration deposits fixed-maturity PT-sUSDe into Aave, borrows USDT against it, swaps the borrowed asset for additional PT-sUSDe and redeposits it. Official integration documentation describes repeated looping to a target around 7.5x, so leverage is the current product mechanism rather than a hypothetical future feature.

Current observation and perimeter

The DefiLlama protocol API read on 2026-08-15 classified mStable V2 as CDP and reported approximately $3.10M on Ethereum. Its adapter discovers dHEDGE pools managed by the published mStable manager and counts their token holdings together with Aave aToken and debt positions. That accounting boundary is consistent with a managed leveraged vault, not a multi-asset AMM pool.

Control, loss and exit applicability

dHEDGE contracts hold the vault positions while mStable bots rebalance capacity, roll maturities and manage leverage. Aave borrow caps, collateral parameters, oracle prices and USDT funding costs can constrain the loop; PT-sUSDe also depends on Ethena and Pendle through maturity. A holder can therefore lose through liquidation or adverse deleveraging even if the underlying synthetic dollar remains near par, and a normal share redemption depends on an orderly unwind of debt and collateral.

Why the shared dossier decides

The v1 leveraged-looping dossier controls because the advertised return is amplified by recursive borrowing and redepositing. Audit coverage and automated monitoring do not remove leverage, oracle, utilization, rate or unwind paths. Reopen only for a separately named unleveraged product whose contracts prevent borrowing and recursive redeposit, with current authorities, positions, incidents, capacity and proposed-size stressed redemption independently verified.

Class rule

The leveraged looping class is outside the approved structures, so every protocol in it is not approved until the rule changes. The rule is about the structure, not an adverse finding about this protocol, and it is not a client instruction. The events that would reopen it are listed with the memo.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• mStable — protocol relaunch · primary · accessed 2026-08-15
  Supports: current relaunch, mPT-sUSDe, Pendle, Aave, Ethena, automated leverage
• mStable — current Pendle vault mechanism · primary · accessed 2026-08-15
  Supports: single current product, PT-sUSDe collateral, USDT borrowing, looping, rollover
• mStable documentation — integrations · primary · accessed 2026-08-15
  Supports: Aave deposit and borrow, PT-sUSDe redeposit, 7.5x target leverage, liquidation and oracle risk
• mStable documentation — architecture and contracts · primary · accessed 2026-08-15
  Supports: dHEDGE vault contracts, capacity bot, rebalance bot, rollover bot, pause controls
• mStable documentation — security and risks · primary · accessed 2026-08-15
  Supports: audit perimeter, Aave looping risk, Pendle maturity risk, Ethena dependency
• DefiLlama — mStable V2 survey record · secondary · accessed 2026-08-15
  Supports: current TVL, Ethereum perimeter, CDP category, survey observation
• DefiLlama adapter — mStable V2 managed pools · secondary · accessed 2026-08-15
  Supports: mStable manager, dHEDGE pools, Aave assets and debt, adapter accounting

Inherited controls

The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.