YIP: Treasury providing liquidity for uSTONKs and additional $YAM rewards for uSTONKs and uGAS

Treasury providing liquidity for uSTONKs and additional $YAM rewards for uSTONKs and uGAS

Basic Summary

Degnerative.Finance is about to list uSTONKs synthetic that tracks an index consisting of ten stocks that are most commented on r/wallstreetbets. uGAS-JUN21 is going to switch to a quarterly expiration to increase liquidity on a single synthetic. Both synthetics will launch on March 8th.

This proposal

  1. yUSD in the treasury (~$910,000) to mint uSTONKs synthetics tokens on degenerative.finance. Then provide liquidity in order to mine UMA tokens.
  2. Provide an additional total of 50,000 $YAM tokens as rewards over 3 weeks after March 8th for Minters and LPers of uSTONKS and uGAS-JUN21 to promote an active and strong market.
  • This will be a trial run for future liquidity mining rewards for synthetics on Degenerative.Finance.
  • $Yam rewards will be provided from the incentive mining pool that has been already setup for farming incentives. No additional YAMs will be minted beyond what has been allocated for the incentive pool.

Abstract

Yam will offer additional 5000 $Yam Tokens first week and 10,000 $Yam next two weeks for Minting + LPing uSTONKS. Same rewards will also apply to uGAS-JUN21.

We will be using around $900k of the treasury to Mint and LP uSTONKS. Initially it will be high CR ~4.

Using the yUSD in the treasury for degenerative.finance has several benefits:

  1. Minting uSTONKs and providing liquidity will support the ecosystem for degenerative.finance. The higher the liquidity the more the potential volume and usage for uSTONKs.
  2. By providing liquidity, the treasury will receive UMA rewards.
  3. Minting uSTONKs requires stablecoin USDC as collateral and LPing uSTONKs requires USDC to pair. Ultimately there is no price risk, only impermanent loss risk and liquidation risk.

Specifications

The plan for the uSTONKs mint+lp treasury proposal:

  1. $910k yUSD in treasury will be unwrapped into USDC.
  2. Deposit $600k USDC to mint $150k of uSTONKs at a CR of 4.
  3. Pair uSTONKs with $150k of USDC and deposit on AMM
  4. Deposit remaining $150k USDC into our general expense multisig to add collateral to our minted position in case it gets low because the price of uSTONKs goes up too much.
  5. Purchase additional $10k uSTONKs to cover any possible IL
  6. If CR hits 2 we will add $150k USDC from general expense multisig in order to protect position.

The plan for additional $Yam rewards distribution.

  1. Rewards will start on March 8th as soon as contracts are available and up on Degenerative.Finance
  2. Additional UMA Rewards and YAM rewards will be airdropped for minting and LPing either uSTONKS or uGASJUN21
  3. UMA and YAM rewards will be distributed on the regular monthly rewards distribution which will be April 7th + 3 days on-chain proposal.
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https://snapshot.page/#/yam.eth/proposal/QmZtZgrMQWR2UubsCefQyRiD3YqXuBvq5jQWQfk8bDvjwi

Posted up for snapshot.

A model for the APR at various prices is available under this link: APR at various prices for uSTONKS and uGAS - Google Sheets

Screenshot below. These APRs for early minters are more enormous!

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