Y2K Finance ($Y2K) π Fear the depeg no more
What's this hot new protocol ticking every box on the spring cleaning list? Oh its $Y2K and its got you covered on Arbitrum's Airdrop hunt β the LSDs β Options β Real Yield β & the [ cartel ] π¦
(05/21/23) NOTE: Y2Kβs V2 is very close to launching. Check out this latest thread for the details π
Project: Y2K FinanceΒ / Token:Β Y2K / Docs
Messari + Defi Llama + Dune + Dexscreener + Debank + Nansen + Arbiscan + Medium
Preface: Β
Y2K Finance is a suite of structured products designed for exotic peg derivatives, that allows market participants the ability to robustly hedge or speculate on the risk of a particular pegged asset (or basket of pegged assets), deviating from their βfair implied market valueβ.
Which is exactly how the team replied when inquired by a defi llama rep about Y2K and what it is/does. I cannot beat that. But this is what that technical jargon doesnβt tell you:
Y2K was incubated from the same project that brought about Redacted Cartel, which means future partnerships π & inherent trust built in. It also shies away from future expected protocol integrations and the teams commitment to increased marketing plans. You may not have realized just yet but Y2K is down with the memes.
Read below to get up to date and down with the scoop.
Tokenomics: [ as ofΒ 02/03/23 ]
Token Distribution:
My initial take for these tokenomics is good, well divided with most sitting in the treasury and liquidity mining. Though the token has a very high FDV/TVL, which is not surprising for a protocol thatβs structured similar to Curve; where long term emissions are necessary for providing sufficient runway. Thankfully the circulating supply is heavily locked up (>30%) π and the protocol earns real yield.
Quick history:
Launched through NewOrderDAO; same platform that launched Redacted Cartel
Votes:
In December protocol voted to increase $vlY2K revenue share from 30% to 50% without having any affect on project runway.
Fast future:
LSD $stETH market just launched
Redacted Cartelβs Hidden Hands Implementation π
Wildfire
Native orderbook, which can be used for exchanging the ERC1155 semi-fungible positions.
Marketplace for the Earthquake hedge/risk vaults, allowing users to trade positions in between epochs ( 5 day periods )
Tsunami
Protocol for CDOβs (Collateralized Debt Obligation)
Lending platform for pegged assets
Exotic Stablecoins: Near (USN), Arbitrum (VST) etc
V2 implementation for longer deposits and coverage times coming within a month or so. π
Arbitrum ecosystem partnerships π
How it works / What is does:
Excellent video recently released breaking down some depegs and showing how the protocol works.
Vote Locking
$Y2K can be locked for either 16 or 32 weeks. The latter giving 2x more protocol fees and governing power.
Governance
$Y2K receives 1 vote 16 week locked received 5 votes and 32 week 10 votes.
Gauges
Smart contracts allow governance to vote which markets (vaults) receive the most emissions. Snapshot will be used to determine the outcome of the vote.
Hidden Handβs marketplace will be used for $vlY2K holders to rent out their voting rights π
Earthquake
An insurance protocol that allows users to either hedge or speculate on the depegging of tokens, whether stablecoins or staked derivatives
Deposit ETH =
Hedge Vault - Betting the asset depegs below strike
Risk Vault - Betting the asset doesnβt depeg
Current Assets =
MIM, USDC, USDT, FRAX, DAI, WBTC, USDD, STETH, BUSD
Finances
Fees
5% on both hedge deposits and risk deposits (if depeg occurs)
50% to $vlY2K holders and 50% reserved for DAO treasury
Revenue Breakdown:
38% Premiums
62% Depeg Events
Treasury
Used for protocol maintenance
Wallet Inspection:
Largest Holders =
Team / Community:
Location =Β NA
Hiring =Β NA
Investors = NewOrderDAO
Developer Activity = [ Github ]
Devs = 0xNexusFlips + 0xMiguelBits
4 contributors
Socials:
Twitter: 12.8k
Lots of recently active engagement and threads.
Discord: 4.9k
Extremely open, helpful and engaging. The team is often present and open to communication and ideas π
4 audits completed
Competition:
Depeg Finance on Fantom
Partnerships / Ecosystem:
NewOrderDAO
Redacted Cartelβs Hidden Hands
Cofounder of Redacted is also protocol dev at berachain and is the tech/policy advisor to Y2K π
Bullish:
Twitter =
Tanaka bullish on Y2K
Karl_0x on Arbitrum season upcoming and Y2K standing out
0xsurferboy on the importance of hedging pegged assets
Badqaunt1 early supporter (investor?)
Bankless on protection against stablecoin blowups
NewOrderDAO incubation and the inherent relationship with Redacted Cartel π
Hidden Handβs bribe marketplace implementation
Sound tokenomics with high % of circulating supply locked
Real yield and actual use case
$vlY2K is a solid implementation for promoting protocol health
Helpful and engaging community forming
Arbitrum potential for partnerships is massive
Current state of affairs with BUSD vs US Fed = Prime opportunity for Y2K to catch narrative bidl; along with the aforementioned narratives.
Bearish:
FDV is high given the low circulating %
Though the market hasnβt seemed to care too much about high FDV protocols lately
Very niche product; requires users for hedging and speculating to fully function
Though promising early adoption and ease of use.
Searching for Y2K on twitter is polluted with musical pop bands; though I still really like the name. Easily remembered and distinguishable.
Conclusion
Hedging portfolios is a skill most donβt have. Accepting risk is what most do. Especially this middle of the curve tractor. But that doesnβt mean its right and if we want to win in this ridiculous market of ups, downs and sideways (ups & downs) we need to learn to use hedging to our advantage. And learning to hedge pegged assets is a great place to start. Especially with the rise of LSDs and the already vast expanse of wrapped assets.
With a very clean UI/UX, orderly set of documents, and an extremely open and helpful community, Y2K is set apart from any in this space (thereβs not many). Couple those facts with the very low, albeit high FDV/TVL ratio, and you have a very interesting bet with this team. With partnerships and new products in the pipeline it is sure to get exciting.
With launches TBA, expect the ability to trade your NFT hedge or risk positions within Wildfireβs order books and the ability to borrow against your pegged assets in Tsunami to soon arrive.
Donβt fade the Y2K generation.
Nothing in this report should be misconstrued as financial advice. Any investments should be taken at the sole discretion of the reader and/or counter party.Β
As always, dig deep and DYOR.Β
Made with love,