Starbank Academy— MetaStable Pools

Starbank
2 min readApr 28, 2022

Starbank Finance, which is based on Balancer V2, is releasing several types of pools. These pools consist of:

· Weighted Pools

· Stable Pools

· Meta Stable Pools

· Liquidity Bootstrapping Pools

Each of these pools employs a different strategy which means it’s important for the investor to understand exactly what they’re getting into. We will be covering each one of these pools to explain how they work.

What is a meta stable pool?

Meta stable pools can be seen as an extension of regular stable pools. They are almost the same thing, but meta stable pools are specifically for a pair of tokens that correlate in price but aren’t pegged. The best example of these would be wrapped tokens. WETH and ETH correlate in price since they’re the same token, ones just wrapped. For this reason, they would make a great pair for a meta stable pool.

Perks of a meta stable pool

Supports tokens that accumulate fees

Unlike regular stable pools, meta stable pools support tokens that can accumulate fees and slowly diverge from the other token in the pair. They are able to do this because the tokens are not pegged in the meta pool, they just correlate. This allows growth of one of the tokens as it collects fees.

Staking & Providing Liquidity

One possible advantage to using a meta stable pool is that you can get rewarded for staking a token and get rewarded for providing liquidity at the same time. This can increase your rewards since both staking and providing liquidity each have their own APY.

Arbitrage-less

One final perk of stable pools is they don’t experience arbitragers. In a normal liquidity pool, arbitragers help keep the pool in balance by taking advantage of price differences. Well, they aren’t needed with stable pools since the two tokens should trade at roughly the same price.

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