Y2K Finance overview
Y2K Finance is a completely novel DeFi platform built on Arbitrum with the aim of allowing users to protect or profit with pegged assets (or basket of pegged assets) from deviating from price. anchored value of that property.
Currently Y2K has three main products:
Let's find out what these products stand out with Holdstation.
Features of Y2K Finance
The platform creates Vaults, where users can create positions to hedge, speculate and hedge against the risk of price fluctuations of fixed-price assets. Currently supported asset classes are stablecoins like $USDC, $USDT, $DAI, $MIM, $FRAX.
Positions in this product include two types of Vault that allow users to deposit $ETH into the Vault for terms like Weekly Epoch or Monthly Epoch:
- Hedge Vault
User deposits $ETH into Vault by deadline (Weekly/Monthly) and receives Tokens in the form of ERC-1155 as deposit receipt. This can be seen as an insurance against the de-peg events of the property they desire. If, during that time, assets are de-peg, depositors to this vault will get a share of the rewards (according to market share in the Vault) from the deposits from Risk Vault users. Conversely, if the asset is not de-peg, the sender will lose the above amount entirely.
Basically, the person who deposits money into the Hedge Vault is the party who buys insurance for the property.
- Risk Vault
Depositors into Risk Vault will create insurance for the Hedge Vault and have to pay the Hedge party if there is a risk. Conversely, if there is no de-peg risk, the person who deposits money into this Vault will receive a portion of $ETH from the Hedge Vault side. Like the Hedge Vault side, Risk Vault users also receive ERC-1155 tokens.
Basically, the person who deposits money into the Risk Vault is the party that sells insurance for the property.
Basically this is a product for users who want to create a position or exit a position without having to wait until the deposit term expires. Currently, Y2K Finance is using the Order Book mechanism through its smart contract. 0x Protocol to create this product in beta and will release in the future.
Not yet officially announced, but revealed from the project, Tsunami can be seen as a Lending platform for pegged assets.
How Y2K Finance works
Users of both Vaults deposit $ETH into the smart contract and receive NFT with the following parameters:
- $MIM Vault
- 1 week deposit term
- Initial Value $MIM = 0.99$
$MIM depeg case
- The Hedge side receives the insurance payout from the Risk side and the hedge money is transferred to the platform's Treasury (minus 5% of the platform fee) – Profit Hedge
- Risk side receives premium from Hedge side (minus 5% of platform fee) – Risk Loss
$MIM no depeg case
- Hedge party deposits will be put into the Platform Treasury – Hedge Loss
- The Risk side receives a part of the premium from the Hedge party's deposit amount – the Interest Risk side
In two cases on Treasury platform will receive money platform fee from Risk Vault sender, and Hedge Vault side only need to pay platform fee when $MIM depeg.
The current investor of Y2K Finance is New Order, which was raised through a crowdfunding round, the amount of money raised has not been disclosed.
The future roadmap of Y2K will include the following stages:
- Supports stablecoins like USDC, USDT, MIM, FRAX, DAI on multi-chain
- Launch of a rebase mechanism to prevent location dilution in the vault
- Launching Wildfire
- Launching Tsunami
- Add stETH and wBTC
- Supports Exotic stablecoins like USN (Near), VST (Arbitrum)
- Autocompounding $Y2K token
- Launch of fixed arbitrage trading vault
- Launch of options trading
- LP y2kTOKENS
- Updating more...
- Name: Y2K Finance token
- Ticker: $Y2K
- Type: Governance token
- Contract: Updating...
- Chain: Arbitrum
- Total supply: Updating...
- Initial circulating supply: Updating...
Distribution and vesting schedule
The allocation category of $Y2K allocated by Y2K Finance is as follows:
- 30% for liquidity mining
- 35% for the project's Treasury
- 15% for development team (locked for 9 months with 10% unlocked, and vested linearly for 2 years)
- 10% for New Order Treasury (for incubation purposes)
- 5% for investors (locked for 6 months with 10% unlocked, and vested linearly for 2 years)
- 5% for IFO
Y2K Finance owns a tokenomics design with most of the total supply devoted to paying rewards to users with 30% going to reward activities through users locking their positions in Vaults. After the end of the IFO activity with 5% of the total supply, the initial inflation of the token is quite risky for holding. 35% of the total supply is for the project's Treasury, investors should regularly check the Treasury address to have the best strategy for their investment. However, if the project works well, the revenue is steady. You can watch to buy $Y2K at the time of $vlY2K coming out because then the demand for $Y2K lock will increase, creating buying force for the token.
In addition, the team holds 15% of the total supply with a 9-month lockout period with 10% unlocked and linear vesting within 2 years, a vesting period is not very long we should also be careful about this
Although the only investor at the moment of Y2K Finance is New Order and 5% of the total supply is for investors. However, information about other investors has not been disclosed, maybe these are angel investors or some other investment fund.
The remaining 10% is allocated to New Order's Treasury for the purpose of incubating projects launched on New Order. More information will be updated.
Y2K Finance owns $Y2K which is the platform's utility token, used for two core products of Y2K Finance, Earthquake and Wildfire.
Currently, $Y2K token has usecases such as locking $Y2K, receiving $vlY2K, enjoying revenue from the platform's transaction fees (30% from transaction fees), administration, and rewards for users. Specifically:
- Revenue from platform fees
+ 5% fee from deposit in Hedge vault
+ 5% Risk vault deposit fee when a depeg event occurs (no charge if the asset remains peg level)
- Reward users through lock time in farming, the longer the lock, the higher the reward, and for specific vaults, etc.
- Governance: Own governance rights, participate in voting on proposals to add new asset classes and derivative products
$vlY2K will have the following features:
Increase the rewards in the Vault
The longer the lockout period, the greater the percentage of revenue shared
Governance of the platform through voting
Sell your voting rights to parties wishing to participate
Create/Exit voting positions through the secondary market in the future
In the author's subjective opinion, Y2K Finance is essentially an options trading platform for pegged assets. Users who participate by depositing in two vaults of Y2K Finance, 'Hedge' and 'Risk', are both at high risk of not being able to exit their positions immediately. Current products are all stablecoins with high risk of price manipulation, so product access is difficult and demand is not high.
However, this is a very unique product that makes the DeFi ecosystem more diverse. With the total amount of locks on the platform growing to 11 million USD in the first epoch, the community's interest in this novel platform can be seen.
We should wait for the finished products and the time when the $Y2K token is released to have a more objective perspective. If investors want to participate in Vaults on the platform, they should consider and allocate capital along with careful risk management.
The information, statements and conjecture contained in this article, including opinions expressed, are based on information sources that Holdstation believes those are reliable. The opinions expressed in this article are personal opinions expressed after careful consideration and based on the best information we have at the writing's time. This article is not and should not be explained as an offer or solicitation to buy/sell any tokens/NFTs.
Holdstation is not responsible for any direct or indirect losses arising from the use of this article content.