The idea of implementing an new synthetic asset：uXTZ

Ideas
#1
  1. Implement an new synthetic asset uXTZ with XTZ,SIRS,USDT,tzBTC as collateral.
  2. Set the Lending fee of uXTZ to 6.5%.(Initialized value)
  3. Implement an uXTZ savings pool and a XTZ/uXTZ CFMM pool.
  4. Allocate 1% of the Lending fee to the Unifying YOU staking pools and the remaining 5.5% to the savings pool and liquidity pool in a 6:4 ratio.(Initialized value)
  5. Distribute 145YOU/day to incentive the XTZ/uXTZ LP.
  6. Swaping the allocated lending fee and the baking rewards of XTZ automatically into YOU ,just like the Unifying YOU staking pools did .

uXTZ will be a good synthetic asset with rich usage scenarios. for example:

  1. LB users who like to hold XTZ will now be able to get more SIRS by minting uBTC with SIRS as collateral . Then LB users who like to hold BTC also have the same demand and want to mint uXTZ with SIRS as collateral and get more SIRS . Maybe some balanced type users would mint half uXTZ and half uBTC to get more SIRS.
  2. For external users who hold BTC and have doubts about XTZ, they do not need to buy XTZ to enter Tezos DeFi, they can directly mint uXTZ with tzBTC or USDT as collateral , swap to XTZ and enter Tezos DeFi.
  3. For users who want to short XTZ, they can short XTZ by minting uXTZ with tzBTC or SIRS or USDT as collateral,and sell out.
  4. Youves’ synthetic asset engine can realize that uXTZ and XTZ will always be pegged at 1:1，uXTZ holders could get rewards from Savings pool . For me personally, I prefer to use uXTZ that can be pegged 1:1 to XTZ as opposed to ctez that has a growing exchange rate relative to XTZ, because I have to do some math when swap between tokens and ctez.
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#2

I like the proposal and also believe it would work from a traction, liquidity and technical perspective. Also I’d be happy to help with the deployment/wiring as all pieces are already kind of existing (the cfmm needs to accept tez, but that’s a minor change). The only question is: the XTZ in the CFMM would get Baking rewards, what would we do with those? Options I see:

  • pay it to the LP: this has the negative effect that it would constanly “push” the curve. An option that would require some more logic is to automatically swap the baking reward to restore balance.
  • pay it to the unified staking: the reasoning here is that the protocol is already paying with farms users to provide liq, so this can flow back to the protocol.
  • do not delegate: this is kind of stupid…

The selection of the baker can be done by a DAO governance vote so I don’t see any issues there.

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#3

Glad at your reply. In fact , Whichever option is taken to deal with baking rewards, it is only necessary to make the APR of the LP enough attractive relative to the baking rewards. After all, we need to attract enough liquidity.

#4

Another option is swapping baking rewards to YOU, this is a two birds with one stone option. Redistributing most or all swapped YOU to LP providers. YOU staking pool can get a slice of it, this will drive YOU tokenomics organically grow.

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#5

And next？Could it become a YIP proposal？

#6

Yes, let’s set it up.

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#7

Now is a perfect time. As the price of BTC and XTZ rises, the Collateral Ratio continues rises too. And the excess lending capacity is just enough used to mint uXTZ.

#8

This discussion has led to YIP-013, which was accepted by the Youves community. A first uXTZ engine with USDt as collateral is already live: youves

Also live is a uXTZ/tez flat curve dex, a farm and a uXTZ savings pool.

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