youves YOU: Stablecoins and Synthetic Assets on the Tezos Blockchain

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2 years ago
Topics: Crypto, Cryptocurrency, Youves, Tezos, You, ...

*obligatory not financial advice*


What is youves?

Youves is like the Tezos version of Maker and its DAI stablecoin. It allows the creation of a stablecoin called uUSD by borrowing them and using XTZ as collateral. But it also allows its users to mint other synthetic assets like a token called uDEFI that works as an index for 5 of the biggest DeFi tokens across the crypto market. Other assets like a synthetic gold pegged token will also be added soon and other collateral options like wrapped BTC will be added too.

uUSD is well established in the Tezos ecosystem and is available on every Tezos DEX and it is also used to mint other synthetics on youves. The dApp allows decentralized collateralized loans in uUSD by locking XTZ as collateral. Such loans are useful if you need money but don't want to sell your XTZ because you are bullish on it, or for leverage trading were you use your coins to get uUSD that you can use to buy more coins.

Your collateral needs to have a value of at least 200% of your borrowed uUSD, which is quite a lot but it guarantees that every minted uUSD is backed by enough coins. Should the value of your collateral fall below 200%, it becomes open to liquidation, which means that other people can use their uUSD to pay back your loan and make a profit with your collateral. This ensures that all loans will be paid back one way or another before the uUSD isn't fully backed.

The other asset that is currently available on youves is uDEFI, this is a token that works an index for UNI, CAKE, AAVE, LINK and LUNA, and so it’s basically a DeFi ETF. It allows its holders to diversify their investment across multiple DeFi tokens while only buying and holding one. Minting uDEFI also works by taking collateralized loans, but you have to use uUSD as collateral. This means that uDEFI is over-collateralized with uUSD and borrowing it is basically shorting the DeFi sector, which makes minting it yourself also rather risky. But you don't need to mint it yourself, you can also buy it on multiple DEXes like PlentyDeFi and Quipuswap.

Both uUSD and uDEFI can be held in a savings pool on youves for a variable interest rate. The assets on youves don't follow their pegged price perfectly and it can sometimes happen that it’s trading for a slightly higher or lower price on a DEX. The savings pool helps to stabilize the price by using its funds for "conversion rights" that let the holders of synthetics trade tokens with the savings pool for their targeted price in exchange for a fee. The rates you can earn are variable and depend on how many funds are in the savings pool and how much is being converted. Currently you can get about 12% APY on uDEFI and 15% APY on uUSD. However, there is an unlocking period of six weeks for both assets.

The platform is constantly implementing further assets and features. Soon there will be a token called uXAU that is pegged to gold which will also be minted with uUSD collateral. Soon it will also be possible to use other tokens as collateral for uUSD like XTZ/tzBTC liquidity pool tokens. The protocol already offers many great tools for crypto traders, youves is probably the only place where you can get a +10% APY on a DeFi ETF in a decentralized way and it is improving even further.

The YOU Token

YOU is the governance token of youves. It is used for voting on proposals but it can also be staked to earn a share of the interest rates that minters have to pay. You can stake it to secure uUSD and receive rewards in uUSD or you can stake it to secure uDEFI for rewards in uDEFI. The APY depends on how many YOU are being staked and you can get an APY for up to +300%. However, this comes with a risk because should all safety measures of the protocol fail and some of the synthetics aren't fully backed it will sell the staked YOU to cover for them. This means that YOU holders can profit from the success of the platform but can also be hurt from its failure and they have an incentive to use their voting rights to do the best for youves.

There is a max supply of 4,680,000 YOU tokens. 11.11% are going to the developers, the rest of the supply is being distributed to users. 66.67% of the supply is being used to reward minters of uUSD and other synthetics and 22.22% are going to liquidity providers for trading pairs of YOU synthetics on the PlentyDeFi DEX. The distribution of YOU started in July 2021 and the token is highly inflationary in the beginning, but the number of new YOU tokens will constantly be halved on a yearly basis until the max supply is reached.

The value of the YOU token depends on how many user youves has and how many synthetics are being minted with it. If the protocol does well it will reward the YOU token holders which would cause a high demand to for the token. There is a max supply and YOU is mostly being distributed to users of youves and it especially rewards early users because the distribution shrinks over time. The market cap is extremely low too meaning that there is a lot of room to grow, but for now it is highly inflationary and it will likely take some time for the token to rise in value.

The YOU token is relatively new and isn't supported by any centralized exchange right now. It can be bought on the Tezos DEXes Quipuswap and PlentyDeFi. The best wallet to use youves and store YOU is the Temple Wallet.


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Avatar for two_sats
2 years ago
Topics: Crypto, Cryptocurrency, Youves, Tezos, You, ...