Frogs! We’re proud to announce the launch of our sovereign algorithmic and ecosystem backed stablecoin, YFLUSD!
The first community stable
During the feedback process of LINKSWAP, it became apparent to us that most traders tended to stick to crypto-assets during times of positive trends but preferred the safety of stablecoins during times when assets were dipping or high volatility time periods. The utility that a stablecoin provides during those moments of high volatility cannot be understated, with gas prices on Ethereum oftentimes reaching into the hundreds of Gwei while capital takes its flight from crypto-centric to stable-centric positions.
It was clear to us then, that this was the sort of innovation that would be welcomed with open arms by the community. As YFL further innovates and forges a path ahead as its own ecosystem of products and services, existing stable solutions were deemed ill-suited to the task for two reasons:
- Setting a base currency pair such as Tether means YFL ecosystem will always be dependent on a third party and;
- There is less control from stakers and holders over what happens to those tokens and how they are used through capital markets.
Most attractive from this perspective is a homebrew solution - like all YFL related products, the ecosystem intends to support end-to-end solutions, and a stablecoin base pair was sorely missing in the grand picture. A true stable for YFL holders was needed.
The key issue with existing algorithmic stablecoins is their lack of real backing and use by any sort of DeFi products and services. Prices tend to fall below the one dollar mark and stay there as there is never much reason to buy into these assets due to the lack of the aforementioned usecases. Combining an algorithmic stablecoin with pure usecases (in the form of stablecoin trading on LINKSWAP) will mark it as the first true algo stablecoin on the market with a real value.
YFLUSD will be the premiere token that users will swap to when using LINKSWAP during times of high volatility. A third base pair will be implemented on the LINKSWAP User Interface following the release of YFLUSD (the first two being ETH and LINK) that will allow users to quickly and easily exit their alt positions and enter stable. Additionally, YFLUSD will enjoy the highest discounts for all YFL related products and services, including LINKCHECK, listing fee payments, and more.
YFLUSD functions similarly to historic algorithmic stablecoins, but with a few tweaks that will aid price stability over time. Of particular note is YFLUSD will be pegged to $1 of ETH instead of another stable. This will further function as a way for YFLUSD to have true independence from other stablecoins. In addition to this it will have a pivotal role in the YFL ecosystem through a mechanism to allow the use of a transaction fee (less than 1%) of each YFLUSD transaction to be sent to up to two additional initiatives, projects, the YFL Treasury, or yYFL stakers. By providing yet another stream of revenue to the YFL community, YFLUSD will help to build synergy and support where it is needed.
Three Token System
The base token for the YFL ecosystem. Over time, YFLUSD will be the stablecoin of choice, being featured as one of the base assets on the LINKSWAP frontend as well as being accepted as the main payment currency for things like token listings, audits, and so on. Through ecosystem use we intend for YFLUSD to have real value, and thereby support the price peg of 1$ beyond algorithmic mechanics of existing solutions.
The YFL Bond token will serve as the mintable currency that users can generate when YFLUSD is in a contractionary phase (under 1$). Users will be able to burn YFLUSD at a given rate and receive bond tokens - these bYFL tokens will be redeemable once price recovers above 1$, acting as a downward force to keep price from going too far once it starts trending upwards.
YFL Synthetic will be a reward token that is only attainable by staking ETH-YFLUSD, LINK-YFLUSD, ETH-sYFL, and LINK-sYFL LSLP tokens through the frontend available here. Synthetic YFL essentially serves in the YFL ecosystem as a fluid intermediate that can be adapted to suit a wide variety of use cases. YFL Synthetic will be emitted through the frontend for a period of one year, in which additional products and services for the YFL ecosystem will exist that will be able to leverage the flexibility provided by sYFL. To support future scenarios, the Treasury will hold 2.5 million sYFL to use/distribute as needed. As an additional use for Synthetic YFL, users will be able to stake their sYFL tokens in the frontend for YFLUSD (at a lower, but meaningful rate) minted during expansionary periods when the price of YFLUSD is over $1 thus completing the cycle of supply and demand, ultimately driving the price of YFLUSD toward $1.
Through the use of the same mechanism embedded into YFLUSD, sYFL and bYFL will be able to use up to a 1% transaction fee to help fund or reward other parts of the YFL community and ecosystem. We envision that together, YFLUSD, sYFL, and bYFL will be able to generate a flywheel effect. The trio of tokens supporting the YFL ecosystem can be supported by the vastness of other YFL projects and initiatives to help sustain a healthy balance that benefits our community.
To celebrate the launch of YFLUSD, sYFL, and bYFL, there will be 207’000 YFLUSD spread evenly over 6 Single-Asset pools (listed below) that will allow stakers to earn rewards over a 5 day period. Users will be able to stake the following assets:
In addition to the 6 Single-Asset pools, there will be 4 LSLP token reward pools that will enable stakers to earn up to nearly 2.5 million sYFL over a 1 year period:
Edit: The timer for the YFLUSD-* LP pools will reset every 30 days over the next year. When this occurs the emissions for those pools will decrease by 25%.
ETH-YFLUSD (859K sYFL)
ETH-sYFL (339K sYFL)
LINK-YFLUSD (900K sYFL)
LINK-sYFL (400K sYFL)
We are eager to see the results of our unique solution and how YFL stakers, holders, and even outside capital interacts with this new stablecoin with uniquely backed positioning. While other stablecoins are purely algorithmic (as in the case of say, Mith cash) or fractionally backed (FXS), the backing here is through use. Through real use cases, we hope that YFLUSD will achieve its goals at being a true stablecoin owned and run by the YFL community. Check out the new features here.