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Treasury-Owned Liquidity

Unleashing the power of Treasury-Owned Liquidity!
We’ve all seen it before. A project launches with much fanfare, only to fizzle out soon after due to a lack of liquidity. It’s a problem that plagues many DeFi projects, but it’s one that can be avoided with treasury-owned liquidity.
It's no secret that many projects rely on liquidity providers to help them get off the ground. By offering rewards in the form of tokens or other incentives, these projects are effectively renting liquidity from users who are motivated by the potential rewards.
However, this model of misguided incentives can quickly become unsustainable. Liquidity providers more concerned with farming incentives than with the long-term success of a project, will sell their rewards and remove their liquidity as soon as the incentives are no longer attractive. This can leave a project worse off than it was before.
That’s why we’ve decided to forgo that path altogether. We’ve developed a more robust incentive structure that involves our protocols unique asset utilization algorithm and purpose-built AlphaVaults, HydraVaults and StableVaults. The end result will be a continual generation of liquidity that is treasury-owned - which means it can never be withdrawn on a whim.
So not only are we avoiding all the negative externalities associated with liquidity mining programs, but we've created a more sustainable approach that incentivises participation whilst also ensuring the ecosystem has the deep liquidity it needs to thrive.
This creates a self-perpetuating feedback loop that will boost confidence in the sustainability of the protocol with a growing level of exit liquidity. Put simply, as more users participate in the protocol, more treasury-owned liquidity will be created, increasing confidence for more people to participate. It's a virtuous cycle that we believe will have a lasting impact on the health and growth of our ecosystem.
👉 Learn about how our Price Stability Model (PSM) provides stability and ensures exit liquidity remains high.

FAQs

The protocol generates liquidity through deposits into its AlphaVaults, HydraVaults and StableVaults as well as through the accelerated growth of treasury-owned liquidity with every deposit.
  1. 1.
    AlphaVaults -> If the value of the backing asset, bYSL, is higher than the borrowed asset BUSD, the difference will be utilized to generate USDy-BUSD liquidity by minting USDy, with the liquidity pool tokens being transferred to the Treasury.
  2. 2.
    StableVaults -> 100% of deposits are used to create an equivalent of 150% USDy-BUSD treasury-owned liquidity.
  3. 3.
    YSL-BUSD HydraVault -> 60% of BUSD deposits are used to create an equivalent of 75% USDy-BUSD and 45% YSL-BUSD treasury-owned liquidity.
  4. 4.
    xYSL-BUSD HydraVault -> 60% of BUSD deposits are used to create an equivalent of 75% USDy-BUSD and 45% xYSL-BUSD treasury-owned liquidity.
  5. 5.
    bYSL-BUSD HydraVault -> 37.5% of BUSD deposits are used to create an equivalent of 75% USDy-BUSD treasury-owned liquidity.
  6. 6.
    USDy-BUSD HydraVault -> 60% of BUSD deposits are used to create an equivalent of 120% of USDy-BUSD treasury-owned liquidity.
  • Once the pre-minted allocation for a HydraVault has been used up, the deposit process will revert to the standard model.
  • The amount of pre-minted tokens allocated to each HydraVault varies, so it's possible that one HydraVault will deplete its supply at a greater rate than another.
  • The event will only run for a limited period depending on the demand and the supply of tokens.
To help boost the liquidity of our treasury-owned liquidity, we invite users to deposit BUSD into our HydraVault during our Liquidity Propulsion Event. 22.5% of the BUSD deposited will be used to pair with an equivalent value of pre-minted tokens, providing a significant boost to the liquidity of our protocol's representative pools. While depositing BUSD during this event does not provide any direct benefits to the user, it does greatly benefit the overall health and growth of the protocol.
Only two of our four HydraVaults will have a limited supply of pre-minted tokens.
  • YSL-BUSD -> pre-minted allocation of 65,348 YSL
  • xYSL-BUSD -> pre-minted allocation of 4,785 xYSL