𧡠Stablecoins are supposed to be stable! But we know that's not always the case.
@y2kfinance offers an innovative suite of structured products to enable users to hedge/speculate against de-peg risk.
Built on #Arbitrum. My walkthrough and bull thesis for #Y2KFinance π /1
@y2kfinance offers an innovative suite of structured products to enable users to hedge/speculate against de-peg risk.
Built on #Arbitrum. My walkthrough and bull thesis for #Y2KFinance π /1
β What are structured products?
Financial instruments customized to meet specific investment goals by combining various assets or indexes in a specific structure.
They are often designed to address certain specific opportunities and/or risk profiles. /2
Financial instruments customized to meet specific investment goals by combining various assets or indexes in a specific structure.
They are often designed to address certain specific opportunities and/or risk profiles. /2
π #Y2KFinance is a suite of structured products designed for exotic peg derivatives.
Allows participants to hedge or speculate on the risk of a pegged asset (or basket of pegged assets), deviating from "fair implied market value" /3
Allows participants to hedge or speculate on the risk of a pegged asset (or basket of pegged assets), deviating from "fair implied market value" /3
π 3 initial products:
π Earthquake: Insurance bonds against de-peg risk.
π₯ Wildfire: secondary market to trade on top of Earthquake.
π Tsunami: CDO with GLP style revenue share model.
Let's take a look at each product and how they interact. /4
π Earthquake: Insurance bonds against de-peg risk.
π₯ Wildfire: secondary market to trade on top of Earthquake.
π Tsunami: CDO with GLP style revenue share model.
Let's take a look at each product and how they interact. /4
π Earthquake vaults are based on catastrophe (CAT) bonds, which pay out when a predefined disaster risk is realized.
They apply this concept to #stablecoins and other #DeFi derivative products, so users can hedge against the risk of these assets de-pegging (losing value). /5
They apply this concept to #stablecoins and other #DeFi derivative products, so users can hedge against the risk of these assets de-pegging (losing value). /5
π To use an Earthquake vault, users deposit $ETH collateral and receive y2k (ERC1155) vault tokens in return.
Earthquake vaults support hedging against de-pegging of $FRAX, $USDC, $USDT, $MIM and $DAI, with options for weekly/monthly expiries.
More assets in the future. /6
Earthquake vaults support hedging against de-pegging of $FRAX, $USDC, $USDT, $MIM and $DAI, with options for weekly/monthly expiries.
More assets in the future. /6
π₯ Wildfire is a secondary market built on top of Earthquake vaults.
Users can enter and exit positions in real-time using an order book.
Trades are made using signed transactions and are finalized on-chain using 0x Protocol contracts. /7
Users can enter and exit positions in real-time using an order book.
Trades are made using signed transactions and are finalized on-chain using 0x Protocol contracts. /7
π₯ A user might deposit $ETH in an Earthquake vault and receive vault tokens.
They want to take profits at a certain price, so can list a limit order on the Wildfire order book.
This can be purchased with the taker redeeming underlying assets/yield at end of epoch. /8
They want to take profits at a certain price, so can list a limit order on the Wildfire order book.
This can be purchased with the taker redeeming underlying assets/yield at end of epoch. /8
π Tsunami works similarly to the #GMX GLP model.
#Y2Kfinance takes collateral deposited by liquidity providers and combines it into a large pool.
Users can provide liquidity to Collateral-Debt Obligation (CDO) #NFTs. /9
#Y2Kfinance takes collateral deposited by liquidity providers and combines it into a large pool.
Users can provide liquidity to Collateral-Debt Obligation (CDO) #NFTs. /9
π Those who provide liquidity for the CDO NFT tokens receive a share of earnings from liquidation events, just like the #GMX's GLP model.
It seems almost a pre-requisite these days to go for a #RealYield revenue model, but in this case it seems to make sense. /10
It seems almost a pre-requisite these days to go for a #RealYield revenue model, but in this case it seems to make sense. /10
πͺ $Y2K is the utility token of the #Y2Kfinance ecosystem and the underlying flagship products.
$Y2K can be locked for vlY2K which for: governance, protocol revenue sharing (30% of fees), and direction of emissions /11
$Y2K can be locked for vlY2K which for: governance, protocol revenue sharing (30% of fees), and direction of emissions /11
πͺ $Y2K can be locked for 16 or 32 weeks. Locking for 32 weeks doubles the rewards received vs. a 16 week lock.
Currently around 40% of supply is locked which is a pretty promising statistic. /12
Currently around 40% of supply is locked which is a pretty promising statistic. /12
π So why might #Y2KFinance prosper?
1οΈβ£ $UST de-pegged. A lot of people lost a lot of money and confidence was shaken. This offers a way to hedge against that risk.
2οΈβ£ This may entice #DeFi participants back if they can hedge against this risk (crucial for big players). /13
1οΈβ£ $UST de-pegged. A lot of people lost a lot of money and confidence was shaken. This offers a way to hedge against that risk.
2οΈβ£ This may entice #DeFi participants back if they can hedge against this risk (crucial for big players). /13
3οΈβ£ #DEX perps is over-saturated and this is an innovative new structured product filling a unique niche. Can gain market share.
4οΈβ£ And it takes the #GMX GLP #RealYield model and applies it in a way that makes a lot of sense to me. Should be sustainable. /14
4οΈβ£ And it takes the #GMX GLP #RealYield model and applies it in a way that makes a lot of sense to me. Should be sustainable. /14
π€ For more @y2kfinance and #Arbitrum alpha follow:
@0xMiguelBits
@0xTnoon
@blocmatesdotcom
@SmallCapScience
@thedefivillain
@LouisCooper_
@FungiAlpha /15
@0xMiguelBits
@0xTnoon
@blocmatesdotcom
@SmallCapScience
@thedefivillain
@LouisCooper_
@FungiAlpha /15
π¨βπ« I'm a fan of innovative new options/derivatives/structured products that offer a unique use case and can drive #DeFi forward.
#Dopex is another interesting solution (also on #Arbitrum) and you can check out my treahd on them here:
#Dopex is another interesting solution (also on #Arbitrum) and you can check out my treahd on them here:
https://twitter.com/CrossChainAlex/status/1605911236591423490/16
π¨βπ« Increasingly complex (but useful) #DeFi products can take some time to properly understand.
If you want to make it in DeFi it's worth putting in the time to understand these things properly.
Start your own @y2kfinance research journey here: linktr.ee/y2kfinance /17
If you want to make it in DeFi it's worth putting in the time to understand these things properly.
Start your own @y2kfinance research journey here: linktr.ee/y2kfinance /17
π If you enjoyed this thread give me a follow: @CrossChainAlex
And if you like the sound of #Y2KFinance then give this thread a re-tweet and help spread the word.
And if you like the sound of #Y2KFinance then give this thread a re-tweet and help spread the word.
https://twitter.com/CrossChainAlex/status/1606627594341961729/18 /18
https://twitter.com/_/status/1606627594341961729
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