Synthetic Assets on Tezos: Youves Review
July 22, the ubinetic team has launched their synthetic assets platform youves in beta. Right now, one can issue the stablecoin uUSD or engage in farming and staking of the governance token YOU.
We have reviewed the current functionality of youves, released a uUSD with tez as collateral, and calculated the profitability of staking.
What is youves and synthetic assets
Youves is a platform for issuing synthetic assets on the Tezos blockchain. Those are tokens whose price is pegged to the cost of tokens on other blockchains, fiat currencies, company shares, commodities, or literally anything else.
The synthetic asset issuance mechanism is different from wrapping tokens through crosschain bridges. Wrapped tokens are backed by actual coins stored on another blockchain: thus, to release a wrapped wLINK one has to block one LINK on the Ethereum blockchain. Synthetic assets, on the other hand, can be collateralised by any coins as long as the cost of the collateral is higher than the cost of the issued tokens.
In theory, issuing a synthetic Bitcoin on Tezos goes as follows:
- The issuer sets up oracles to get Bitcoin prices from several exchanges.
- Then they create a vault and a uBTC token, which is followed by determining the collateral factor applicable to the synthetic Bitcoin.
- Users deposit tez in the vault and issue the synthetic uBTC.
- The vault’s smart contract continuously receives new Bitcoin prices from the selected exchanges and revises the price of issuing new uBTC.
- As a result, the Tezos blockchain now has a token that is worth 1 BTC and collateralised by tez.
At the moment, one can only issue the synthetic stablecoin uUSD at youves. We are confident, though, that the developers will later add other synthetic assets. DOGE on Tezos all the way!
How to release a uUSD
In order to release a uUSD you have to own at least 1 tez. Go to the youves website and click Start Minting.
Specify how many tez you want to deposit in the vault and how many uUSD you need to release. The maximum collateral factor is 300%, which means that for each $1 in tez you get 33 cents in uUSD.
You will have to pay a 1.5% fee to release a uUSD. It will be used to reward the developers.
Now select the baker that youves will delegate your tez. The baker will add 5.3% annually to your deposit.
Having done that, click Mint Now and confirm the transaction in your wallet. In a few minutes, you will receive uUSD, and youves will open the vault control page.
You will get governance tokens YOU for keeping your deposit in the vault. The page will allow you to withdraw YOU to the wallet, control your deposit, as well as release and redeem uUSD.
How to use the youves account
Youves offers you to lock uUSD in the pool to earn 5.14% per annum. The mechanism seeks to maintain the overall collateral factor above 300% and regulate the stablecoin’s exchange rate. In order to pool your uUSD, go to Saving, select how many uUSD you wish to lock, and confirm the transaction.
Earn more by staking YOU
You can buy YOU at an exchange or earn them for holding the issued uUSD. The tokens are used for the platform governance. You can lock YOU in the staking pool for nearly 6% per annum in uUSD. To do that, go to Staking, select the desired amount of YOU and confirm the transaction.
Additional Profit: Buying Out Users’ Stablecoins
If the vault’s owner allowed the collateral factor to drop below 200% other users can increase it on his or her behalf. For that, they are entitled to a reward of 12.5% of the amount of redeemed stablecoins in tez. The platform will take the reward from the vault owner’s deposit.
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