Top 5 DeFi Index Tracker uDEFI Is Now live on Youves

by | Nov 3, 2021 | Adoption, DeFi, Latest

uDEFI is a synthetic token on DeFi platform Youves, that tracks the value of the top 5 DeFi tokens. It currently tracks AAVE, CAKE, LINK, LUNA, and UNI. The tracker token is now live on the Tezos-based Youves DeFi platform.

Disclaimer: DeFi is high risk and the following article contains no financial advice. It is recommended that thorough research is undertaken on any DeFi/blockchain applications, utilizing multiple sources, before participating with any blockchain projects, or tokens in this space. Read our full disclaimer here.

uDEFI Now Live On Youves

uDEFI is a synthetic token on DeFi platform Youves, that tracks the value of the top 5 DeFi tokens. The fact that it is a synthetic token, means that it is not actually backed by the assets it tracks (currently: AAVE, CAKE, LINK, LUNA, and UNI).

Instead, uDEFI is backed by the XTZ that is put up as collateral. The value is tracked by use of an oracle which broadcasts the  live price data.

Youves platform uses Tezos-based Ubinetic oracles. The uDEFI token is soft pegged to that value. Just like uUSD and any stable coin that is traded on decentralized exchanges, the actual value is determined by ask and demand.

Read more about uDEFI here.

uUSD As Collateral

An important change compared to the initial design of uDEFI, is the fact that not XTZ, but uUSD is accepted as collateral. Besides the use as stablecoin, uUSD now has a use-case as collateral.

This way Youves becomes a multi-asset borrowing platform. And because both uUSD and uDEFI are available on Youves, this creates a layered yield opportunity.

You use your XTZ as collateral on Youves and mint uUSD and receive YOU tokens for as long as you don’t burn your minted uUSD.

The XTZ that you have submitted as collateral will be staked and earns you staking rewards. Next you can use uUSD as collateral to mint uDEFI. Minted uDEFI also earns you YOU tokens until you burn your uDEFI tokens.

YOU Governance Tokens

The fact that uUSD can now be used as collateral instead of XTZ, has been instigated by a proposal that could be voted on by YOU token holders.

Voting was done last month and 119 YOU holders participated in the vote. These holders represented 64.96% of the current circulating supply, and an overwhelming majority voted in favor of the five proposals. Only 0.01% voted against the proposals. 

After kDAO (the governance token of kUSD), Youves platform is the second platform that actually has a working governance function for its governance tokens.

We hope to see more governance tokens start to fulfill its purpose and move Tezos DeFi more towards decentralized governance and actual decentralization.

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