YIP-x: Permissionless, arbitrary synthetic framework to create traditional markets on crypto, lock up supply and create demand

Proposals
#1

YIP-x: Permissionless, arbitrary synthetic framework to create traditional markets on crypto, lock up supply and create demand

Basic Summary
We are proposing for YAM to use the tech stack created by Conjure to create, maintain and promote synthetic assets, using YAM as collateral for the assets, to creeate demand for the token due to collateral lockup, provide a strong use case for YAM as a reserve asset for non-crypto assets and allow stocks/commodities/traditional traders to use Crypto as an alternative to brokers, using decentralized systems rather than centralized, without needing to be exposed to Crypto directly.

Abstract - What am I proposing?
We propose for a partnership/M&A in exchange for deep access to the permissionless tech stack built for synths, using YAM as the core collateral asset for the synths and to create a traditional market presence in Crypto.

Motivation - Why am I proposing it?
We made a framework for arbitrary synths as well as an oracle framework to enable these synths, as well as allowing the synths to be collateralized through arbitrary tokens to allow for a highly flexible, high scale infrastructure to bring traditional assets fully onchain.You can take YAM and create a say avocado synth, then use the YAM tokens to collateralize the avocado synth to track real avocados and now you both have enabled a permissionless, non custodial way to trade avocados on crypto networks as well as a large demand sink for YAM to collateralize the CDPs for the avocado synths.

The project (Conjure) being used as the infrastructure was put on standby because we are a 2 man dev only team and werent able to successfully market it and get users to creach a critical mass to make the synths operate optimally, because you need atleast a few users and LPs for the synths to be effective. Yam still has a decent community that’s relatively active, just needs a very strong value proposition and narrative, and making it the reserve currency to underwrite the value for traditional markets to be traded on say ETH using YAM as collateral could be that narrative that we need to make the project have a new, innovative advantage.

Benefits to YAM are that you get a large scale supply sink and supply lock up that grows as demand and trading for the assets increases, and strong use case, while we (Cconjure) get to see the project not be shelved permanantly and be used, and potentially being compensated only for the value we create.

Why this and not the current Synth Platform that was being developed?
-Contracts are done and audited, battle tested with >$1m TVL

  • Docs are done and thorough
  • Oracles and framewor for high scale data are operational ready

We just needed access to users to use the stack, which Yam provides. Fixing both problems for both parties and creating a strong end ecosystem.

Why Synths?
Using a token as a reserve asset to bring traditional asstes onchain is an insanely large opportunity to reduce broker risks as seen with the London metals bs and robinhood, letting noncrypto traders use crypto networks without needing to hold crypto, simply because has guarantees that trades will be executed while in the end just essentially holding the reserve asset in the synth form, creating demand and locking supply as activity increases.

As we bring traditional traders to crypto, we need to provide access to the assets they currently trade, and by making these assets synths, we can effectively enable unlimited liquidity and exposure, do a high scale deployment for many assets using the open oracle framework and the permissionless synth framework, all while having YAM be the reserve asset backing it all, bringing down supply and creating demand that only grows with use.

Specifications - How am I proposing it is accomplished?
There are no technical requirements that we need, and no resource requirements as both the oracle and synth platform are complete, and will easily be completed with all neccessary changes to support YAM as the underlying collateral by us as soon as the proposal passes.

What we have
- Front ends for both Synth creation and oracle creation and maintainance

beta oracle front end
oof.conjure.finance

- Full documentation

- Fully open source

- Production ready node that automates oracle maintainance and upkeep for signers, easy to use, high scale (can do 200+ feed updates in 1 tx) and can easily create new feeds, using arbitrary APIs and sources

- Audits for the Synths by 2 reputable independant auditors

- Synthetic framework which allows for arbitrary oracle sources to be used, as well as multiple oracles to secure the synths (Could be UMA as well the open oracle framewokr as well as any other oracles to keep it decentralized) to create synths for any assets which there can be an API for. Could create stocks, commodities, currencies, other cryptos, food even weather synths, all backed by YAM)

What we need

  • Users and help promoting the tools and assets as well as a strong community base

Proposal for Partnership/M&A
We are open to how we approach the relationship with YAM as effectively this tech stack was shelved due to us not being able to get users or build a community as we had no connections and dont know how to market. But we believe with a decent community the tools are not only innovative but can create insane value as a supply sink, create demand for the protocol token as well as a strong use case as a reserve asset for traditional markets.

As such we have 3 proposals

  1. Merge the projects creating either a new token or an allocation for YAM and bring the tech stack as an exclusive feature for YAM (can copywrite the stack to prevent forks as the codebase was built from the ground up and not forked)
  2. Partnership, having Conjure provide the development and tools, and helping create and maintain the Synth framework while YAM is responsible for helping to market and create awareness and connections, and grab users, Conjure would take a small fee on the Synths minted
  3. KPI option/acquisition, should the protocol not be used then no compensation will be given, but if YAMs market / market cap increases 100x then the protocol will acquire the tech stacks for a reasonable amount based on the value created through the tech.

Poll to Measure Sentiment

  • Support - The Synthetic Framework should be used for YAM Synths
  • Do Not Support - We should not use this framework
  • IF SUPPORT - Potentially look at a merger to bring the Synth infrastructure as a core YAM feature and project
  • IF SUPPORT - Partnership only, provide marketing and access to the community for the YAM Synths using the Synth Framework
  • IF SUPPORT - Acquire later based on performance and value created, buying out the protocol to be absorbed into YAM

0 voters

1 Like
#2

As to the liquidity and interest problem. I think that the community needs to understand that the Synths will need to be marketed to both Crypto and noncrypto users in a new way. Synths for crypto based assets simply have too much competition as theres many gas based tokens, as well as PUNKs based tokens, causing low demand for these synths that have been created for YAM before. We need to advertise the Synths more towards traditional tradersand bring them onto crypto for their current activites and current assets and crypto traders who want traditional asset exposure, this both will create a new market in traditional assets on crypto networks which removes central risk like brokers not fulfilling ordrers (robinhood/london metals) but also gives them access to assets they may not have had access to (because they may not have brokers that provide these assets / crypto users may want to hedge crypto risk but not have traditional brokers ).

The grind will be hard at the start to establish these markets but once established and growing YAM will benefit through the high scale demand for the assets and the demand for YAM to collateralize. It will create a reserve asset for a market thats 100x the size of crypto, while enabling that market to be ported onto Crypto networks.

Further tools like L2s can be used to bring down the fees to transact these assets and trade them, increasing the value proposition.

Ultimately the value and benefit for YAM will be insane if theres even small adoption, as every Synth is locked up YAM, creating both demand as well as reducing supply and scaling with adoption of the Synths. So resources may need towards marketing and users and growth but the benefits will more than offset the costs

#3

Thanks for posting this @PR0. Some interesting ideas here that are worth discussing and considering more closely.

The synths space is a hard nut to crack, and I see this as an opportunity to see if there are ways that we can utilize an open source and flexible real time oracle to augment our current product offerings for Synths. I need to ponder it more, but on first blush, a hybrid model for synths that can take advantage of real time price data and get the security of a robust but slow oracle like UMA could yield interesting results. It is the direction that I would vote to explore if this moves forward.

Regarding using YAM as the collateral asset for synths, there is a chicken and egg problem here. While I have no problem with YAM being a collateral for Synths, making it the only collateral limits the size of the markets that we can create and feels like it just ends up being a worse SNX. This is a problem that we have struggled with for our previous synths, where they weren’t useful unless there was deep liquidity and we had a hard time doing that without spending a lot to get people to provide it. Using YAM would limit that even more.

This isn’t really an issue with the contracts themselves so shouldn’t change the main conversation.

#4

The YAM use for collateral would not be a requirement, any token would be able to be used, but by locking up YAM it serves 3 purposes.

  1. It creates a sink for supply and grows for YAM aligning the incentive for people to promote it to increase adoption for the token rather than say a USDC synth which probably actually creates no value for holders.

  2. It allows YAM to be productively used and not just held, with the Synths able to be used for LP, market making, speculation or with other defi platforms like DAI is used which is just a USD synth.

  3. Allows for capital to be unlocked without tax events, as these are loans people can mint say a yUSD token, swap that to USDC and cash out the capital, without needing to pay tax on getting the USD into your bank account using your YAM assets. It also allows you to keep exposure to the asset and not need to sell, while being able to pay rent

1 Like
#5

That’s right！the problem that yam has always had is that there is no empowerment。