Search…
4⃣
USDy
USDy has a vital role within the ecosystem as the protocols reward token.

What is USDy and its benefits?

By serving as the protocol's reward token, USDy acts as an incentive for users to participate in various aspects of the ecosystem.
The best part is that our protocol has been specifically designed to generate protocol-owned liquidity for USDy at various points of interaction. In other words, unlike other protocols that purely rely on liquidity mining to grow liquidity for their reward tokens, USDy will be self-sustaining - as more new users utilise our protocol, more protocol-owned liquidity for USDy will be generated autonomously!
This self-perpetuating creation of USDy liquidity in combination with our protocols Liquidity Stability Model (LSM) will ensure there is always a continual growth of exit liquidity for USDy. This, in turn, will help ensure users are confident in their participation - creating a positive feedback loop that further incentivises new users to utilise the protocol. The end result is an ecosystem that is not only stable but also self-sustaining - something that's essential for long-term growth.
👉 Learn about the The Three Pillars that support our ecosystem

Salient features of USDy include:

USDy Counterfort Mechanism (UCM)

The UCM is designed to help stabilise the health of the ecosystem by providing counter-pressure to sell forces of USDy. UCM features a minimum mint price for USDy, as well as a buy-back and burn function for USDy that is triggered when it's trading below the predetermined mint price.
The buy-back and burn function will only be activated when the pool price for USDy is trading below the USDy mint price - currently set at $0.25. The mint price is set at a predetermined level and can be adjusted by the development team if the need arises.

What price will be utilised for minting USDy?

When USDy is trading at or below $0.25, the protocol will utilize the predetermined mint price to mint new USDy. If the pool price is greater than the mint price, the protocol will use the pool price to mint. This means that, no matter what, the protocol always uses the greater of the two prices to mint USDy.
  • Pool price > mint price, the protocol will use the pool price to mint USDy.
    • When USDy is trading greater than the mint price - the pool price is utilised by the protocol when minting USDy.
  • Mint price > pool price, the protocol will use the mint price to mint USDy.
    • When USDy is trading less than or equal to the mint price - the mint price is utilised by the protocol when minting USDy and the buy-back and burn function is triggered.

How will the buy-back and burn operate?

  • The USDy buyback and burn function will only be activated by the protocol when USDy is trading below the predetermined USDy mint price. It will only be deactivated once USDy is trading greater than or equal to the predetermined mint price.
  • By implementing this buy and burn measure, the UCM will help counter the downward sell pressure on USDy. When activated the following aspects of the protocol will be utilised to reduce the supply of USDy:
  1. 1.
    USDy transaction tax - 100% of the USDy collected from the tax will be burnt.
  2. 2.
    YSL transaction tax - 100% of the tax will be used to purchase and burn USDy.
  3. 3.
    xYSL transaction tax - 100% of the tax will be used to purchase and burn USDy.
  4. 4.
    BSHARE transaction tax - 100% of the tax will be used to purchase and burn USDy.
  5. 5.
    MetaVault Rehypothecation - 100% of the BUSD acquired will be used to purchase and burn USDy every 8 hours.
Last modified 17d ago