Betting on the stability of pegged assets is a unique way to earn profits in DeFi.
What's new in @y2kfinance V2 and why I'm bullish 🧵
For a quick refresher, Y2K is an exotic risk market for pegged assets, such as stablecoins, LSDs, and more.
You can think of their core product "Earthquake" vaults as CAT bonds for DeFi.
Get up to speed if you're unfamiliar👇
twitter.com/pt1mfv_/status/1643365935104012291?s=20
Their vision is to build a comprehensive product stack for anyone seeking exposure to the performance of these pegged assets.
What's new in V2:
✅ Automatic epoch rollovers
💵 New $vlY2K revenue stream
🤝 Open Source Codebase for Earthquake!
🔮 Greater Oracle provider selection
Previously, users had to withdraw and redeposit to/from the Earthquake vaults manually every epoch. This meant standing by for a deposit window, instead of doing the things you love doing.
This is addressed with the new Carousel™️ mechanism ↓
Through the use of designated Keepers, Carousel enables automatic rollovers for users and the ability to deposit for the next epoch at any time.
Keepers collect a small fee for gas, while depositors start earning $y2k once the epoch starts (rather than waiting for vault to open)
This allows users to stay in a vault as long as they wish (unless they get liq'd) and opt out whenever, while also maximizing their exposure to $y2k rewards.
Instead of worrying about the next epoch, you can now touch some grass 🧘♂️
(keep in mind -no deposits once epoch starts)
V2 also introduces a new revenue stream for $vlY2K holders :
The Information Tax 💵
This is a new deposit fee for the vaults which rewards earlier depositors.
In short, the later a user deposits into the vault, the greater the information advantage, thus the higher their fee.
In V1, it was reported that over 30% of protocol TVL came from deposits made in the last 30 minutes of a deposit window.
With v2, late depositors will pay a fee determined as shown below, according to the team:
the cherry on top is that the fees go towards $vlY2K holders!
Will we see the Emergence of the Y2K Ecosystem? 🌐
The new open source codebase unlocks new possibilities for Y2K, and I'm eager to see new products built top of Earthquake 👀
Open source is always good, but how will other builders take advantage of Y2K's unique development ?
Some ideas of what can be built:
- protocol offering insurance to pegged asset’ LPs
- projects building custom insurance products for their assets
- hedged farming vaults using Earthquake
Remember,
more utility for y2k products = nore value accrual for $vlY2K
For example, @delorean_gm is building a vault which uses a portion of locked GLP yield to purchase depeg insurance via Y2K.
This can be a handy tool for savvy investors who can tailor custom strategies based on their risk tolerance 🧠
twitter.com/delorean_gm/status/1664315966183084033
With V2, Earthquake will also be able to access more oracles 🔮
This enables a greater selection of assets to be added to the vaults, including risk assets in the future (!)
Vaults are also able to accept any other assets for deposits, such as $ARB as shown below.
Final Thoughts 💭
Y2K offers a unique solution to an underserved sector of DeFi - peg insurance, and V2 makes it even better:
- smoother UX
- more $vlY2K utility and value accrual
- enables new assets to be used
- new opportunities for products built on top of Earthquake
Reminder - none of this is meant to be financial advice ❗ DeFi is inherently risky, so always tread with caution. This thread isn't sponsored - I truly think Y2K is building some cool shit 🤓
If you're looking to get familiar with how to use v2: medium.com/@Y2KFinance/v2-is-live-launch-user-guide-3281c153ce5a