Youves is a new DeFi (Decentralized Finance) platform that is built on Tezos and will go live on mainnet on the 22nd of July. Youves is built by Ubinetic, a company that also created the Tezos-based Ubinetic oracles, which can provide trustless data to Tezos-based smart contracts.
The company Ubinetic consists of a Swiss-based multi-talented group of experts. Youves is decentralized, non-custodial and works towards a fully self-governed DeFi platform.
The first three uses-cases that will be deployed on Youves are minting, saving and staking:
– On Youves will be able to mint assets with your XTZ as collateral. At a later stage you will also be able to use other Tezos-based tokens as collateral. The first available asset will be a stable coin called uUSD, with a soft-peg to the USD dollar.
– On Youves you will be able to save and earn interest. The first savings solution that Youves will offer is for users to hold uUSD and earn fees in savings contracts.
– On Youves you will be able to stake: earn, hold and stake YOU tokens to get a cut of the platform’s revenue in the form of staking rewards in uUSD.
You will be able to mint uUSD while locking XTZ as collateral in a smart contract. This way you basically borrow uUSD while providing XTZ as collateral.
You can only get access to the full amount of XTZ that you set up as collateral, by burning the amount of uUSD you minted plus accrued interest you need to pay over the loan.
The collateral ratio to mint uUSD is a 3:1 ratio. So, for every $300 worth of XTZ, you can mint 100 uUSD.
And as we’re accustomed to in Tezos DeFi, the XTZ that you have provided as collateral continues to earn staking rewards. You will be able to select your own baker.
There is a 1.5625% platform minting fee that is deducted from the uUSD that you mint. No fee will be charged when you burn your uUSD.
The minting platform fee is part of the platform revenue from which you can take a cut by staking the Youves governance tokens (YOU tokens). You will earn YOU tokens over the uUSD you have minted. More about YOU tokens later.
Once you have minted uUSD, you will pay an interest rate, which will function as the stability fee for the uUSD – USD value peg. The stability fee starts out at approx 0.4% yearly.
There is an interest rate response mechanism on the platform that will adjust the percentage automatically. More on that topic here.
You obviously only pay that interest rate if you minted uUSD, not if you bought or traded it on Quipuswap or another exchange.
Step-in mechanism (Partial liquidation)
As any cryptocurrency, the value of XTZ can be volatile. Users have to provide XTZ as collateral to mint uUSD. This means that the dollar value of the collateral can drop.
To prevent under collateralization, Youves has included a partial liquidation mechanism which is called a “Step-in”.
This means that if your collateral value drops below a certain threshold, in this case 200% of the total dollar value that you have minted, then any other third party can step in and provide the needed uUSD to get the XTZ – uUSD value ratio back to 300%.
For providing the uUSD to get the collateral ratio back up, the third party will earn XTZ and a bonus which will be subtracted from the collateral which is under partial liquidation.
Before you mint uUSD, it is important to understand the consequences of a possible partial liquidation in detail. You will lose part (or all) of your XTZ that you put up as collateral if you don’t manage your collateral ratio.
You can read the detailed explanation on this subject here.
Other assets as collateral
At a later stage, other Tezos-based assets will be allowed to be provided as collateral. There is an incredible amount of new and exciting FA1.2 or FA2 assets on Tezos and we all know that diversification mitigates risks. This would facilitate basket-type products too.
Other targets include further development of our governance mechanism and our documentation.
Save and earn interest
When you hold uUSD, you can choose to lock your uUSD into a savings account on the platform. Currently, there is no lock up time for saved uUSD, so you can lock and unlock at will. This might change in the future though.
Once you’ve locked up your uUSD in your savings account, you start to earn interest. The interest rate is variable and depends on the percentage of the uUSD circulating supply that is locked up in saving accounts.
You can read more about the applied interest rates here.
Staking YOU tokens
As a minter, you will earn YOU tokens, which are the governance tokens of Youves. Holders of YOU tokens can participate in the platform’s evolution through governance.
Every week 40,000 YOU tokens are issued that minters can claim. There is a limited supply of YOU: the distribution number will halve periodically (annually for now).
You can also buy YOU tokens on Quipuswap, but no YOU tokens will be pre-minted. So the initial supply will be very limited.
YOU tokens will be distributed to uUSD minters proportionally. Ubinetic will take a cut and will receive an additional 5,000 YOU tokens per week on an ongoing basis to further the Youves ecosystem.
You can read more about governance tokens here.
All revenues collected by Youves are allocated to YOU holders that secure the platform. YOU tokens can also be used to earn revenue.
By staking YOU tokens on the platform, you will earn a portion of the platform’s revenues in uUSD. This means that you earn a percentage of the platform minting fee and stability fee. These fees are collected in a smart contract and distributed automatically.
There is no lock-up period for staking YOU tokens. This might also change in the future.
Youves governance will not set off in a fully decentralized manner from the start. The governance mechanism is initially set-up as a multi-sig with trusted Tezos ecosystem members.
It is intended to evolve the governance with a more sophisticated voting mechanism that allows Youves to capture the votes of the YOU holders more directly.
Youves has appointed a diverse group of active developers in the Tezos ecosystem as multi-sig keyholders for as long as Youves governance has not been fully decentralized.
The keyholders are:
– Agile Ventures (Creator of Tezos Domains)
– Baking Bad (Baking Bad, Better Call Dev, TzKT and more)
– ECAD Labs
– Kukai AB (Kukai wallet)
– Madfish Solutions (Creator of Quipuswap and Thanos Wallet)
– Papers AG (Involved in Ecoo App and Ubinetic Oracles)
– Ubinetic AG (Ubinetic Oracles)