Thread by @0xsurferboy

1/21
To find a glimmer of hope in the bear market, you need to follow stablecoin trends.

Following this trend will lead you to Y2K Finance (@y2kfinance)

The Ultimate Guide to Y2K Finance🧵

2/21
Before I dive in, a quick mention to @BanklessHQ since I wouldn't have found @y2kfinance and written this thread without them.

Here's what I'll cover:
- Stablecoin trends
- Overview of Y2K
- Thesis

3/21
2022 saw a significant rise in stablecoin hodlers

When the total crypto market cap dropped, the stablecoin market cap is bound to drop. But stablecoin dominance paints a different story:

4/21
This rise in stablecoin hodlers is attributed to people selling off/unstaking and parking funds in the form of stablecoins.

This dry powder sitting on the sidelines can be redeployed when investor confidence returns. But when is that?

5/21
Liquid-staking derivatives like stETH or mSOL have also gained in popularity and so have yield-bearing token-backed stables like DAI. (Partly attributable to UST's collapse)

Crypto-backed stablecoin dominance:

6/21
After UST's depeg sent stETH to the ground, investor confidence in pegged assets in general took a huge hit.

7/21
Y2K (@y2kfinance) might have a solution:

An insurance-like product that lets users hedge/speculate on the depegging of any pegged asset, not limited to stablecoins.

8/21
Y2K is a @neworderDAO-incubated project. New Order is a DAO that builds projects from the ground up and offers funding for projects.

These are a few of their portfolio projects:

9/21
Y2K's primary products consist of:
- Earthquake: (explained in next tweet)

- Wildfire (TBD): A secondary marketplace letting users trade vault tokens before the end of each epoch.

- Tsunami (TBD): Platform specializing in CDO products.

10/21
TLDR of how Earthquake works:

- Users can deposit $ETH into the "Hedge vault" or the "Risk vault"

- "Hedge" depositooors bet the asset depegs below a strike price

- "Risk" depositooors bet the asset doesn't reach the strike price

- Premium/collateral payout as follows:

11/21
Upon depositing $ETH into vaults, a corresponding ERC1155 Hedge/Risk vault token is minted.

Each supported asset and listed strike price mints a unique vault token.

12/21
Y2K has its native $Y2K token with a max supply of 20M.

It's current price / circulating supply sits at $0.61 / 1.2M.

$Y2K is the governance token that will be used to define important parameters of the Y2K ecosystem.

13/21
$Y2K can be traded in a 80-20 Y2K-wETH Balancer Pool:

14/21
In addition to $Y2K, they have $vlY2K which are essentially LP tokens for providing liquidity to the 80-20 Y2K-wETH Balancer pool.

Lockers can accumulate the following:
- Larger share of governance power
- Protocol revenue share (50% of fees)

15/21
These tokens must be locked for either 16 or 32 weeks.

32 week lockers receive 2x more protocol fees and governing power.

Governance power distribution:
Vanilla $Y2K - 1 vote
16-week locked $Y2K - 5 votes
32-week locked $Y2K - 10 votes

16/21
Fee distribution:
5% fee on hedge vault deposits, and risk vault if a depeg occurs
- 70% of the 5% goes to treasury and 30% is redistributed back to lockers.

0.25% fee from premiums & collateral - 70% of it goes to lockers and 30% is redistributed back to the protocol

17/21
My concern regarding Y2K lies in its token distribution and the $SQUID token jr-looking chart. It seems 94% still sits in the treasury?

18/21
My thesis:

As a network effect-reliant project, it needs both hedgooors and riskooors for this "insurance program" to work. Y2K could have the power to reignite investor confidence once its incentives are more attractive.

19/21
FWIW tho, $Y2K doesn't seem to be a rug token despite the ol' saying "if utility = governance, run"

20/21
field-testing @crypthoem's hook. wen dis thread viral?

21/21
I hope you've found this thread helpful.

Follow me @0xsurferboy for more threads on untapped crypto topics 😊

Like ❤/Retweet the first tweet below if you can 🙏

Tagging fellow gigabrains who may be interested 🔥

@DefiIgnas
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@crypthoem
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@neworderDAO

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