YAM Community AMA Recap
Yam hosted our first community AMA today on our Discord!
YAM Core Strategist Feddas answered questions submitted by the YAM Community. The conversation was organized by our community moderated Mona.
The following transcript was edited for clarity.
As far as I know, YFI has parted ways with the insurance program Cover. Can we cooperate our Umbrella insurance with YFI, which is more conducive to promotion, and we can make use of the influence of YFI to expand our Umbrella insurance quickly. In addition, will Umbrella issue tokens? If so, when will it be issued?
Yam.Finance has always been open to cooperative collaborations. Our first efforts will be to build out an active ecosystem around each of Yam’s projects, if it includes a collaboration with YFI, then we will be happy for it, but if it does not, it will not deter us from creating a successful project.
One of the key features of Umbrella is its smart contract composability, which allows other protocols to build on top of Umbrella, this by its nature will bring collaboration in the space.
Currently there are no plans for issuing Umbrella Tokens but that doesn’t mean that it won’t happen in the future. Any new token issuance must be carefully planned and reasoned or else it will siphon value away from $YAM token. Here’s the forum discussion from the community:
Umbrella Token Discussion
Umbrella Token Discussion There's been various conversations occurring regarding if/how to implement a token along with…
Any comments or questions regarding Umbrella?
Has the Umbrella UI interface been completed, when is Umbrella expected to be launched, are there any preparation for the required marketing plan, is there any warm-up promotion activities before launch, and what cooperation does the community need to do?
Umbrella UI is in the process of designing UI and on-boarding new developers. We realized that we can leverage existing design approaches to give all YAM products a comparable look & feel which will help user acquisition and cross-selling of products.
We ran a strategic review in February to make sure we are building an protection product that users need. Results from that review included L2 deployment (which we are currently exploring), long-tail projects (ie those not covered yet by nexus or cover), giving other protocols a tool to bootstrap their own insurance pools on Umbrella (they can incentivize with their own token => Umbrella gets TVL but no/very small YAM incentives required.)
There are many marketing initiatives going on and we plan to create synergies for Umbrella from our active Degenerative.Finance and DAO House campaigns.
2. Degenerative Finance
First of all, congratulations on the successful launch of uSTONKS, which received a TVL of about $3 million on the first day. uSTONKS includes WSB’s hot market capitalization stocks. What marketing plan will uSTONKS have next, who is the target user of uSTONKS, and whether it has promoted uSTONKS to the WSB community?
Thank you. uSTONKS is one of many synthetics that we have planned. In addition we are planning on creating:
uVOL BTC — Volatility index for BTC, then for others.
uKICKS — an index that tracks prices in the sneaker market.
degenerative.finance website version 2 will be a big step in the progress of Degenerative. Our goal with the launch of V2 is to start aggregating multiple synths across the UMA ecosystem. We’ve learned a lot from the initial launch of uGAS and are continuing to improve.
Is there any impermanent loss of uSTONKS, and under what circumstances will the impermanent loss occur?
Impermanent loss can occur on any automated market maker (AMM) like Uniswap, Sushiswap when you are a Liquidity Provider (LP). When you provide liquidity if one side of the liquidity pair rises or falls relatively more than the other pair, you can have impermanent loss.
Let’s say if uSTONKS starts at $200 and you provide liquidity, it rises to $300, if you remove your liquidity at this time, you will have some impermanent loss. If you do not remove your liquidity and if it falls back to $200, you should not have any impermanent losses. YAM contributor nonstopTheo explores the issue of IL in this post.
We mitigate IL in two ways: Degenerative Finance products are mean-reverting: they go up and down. This way, IL is not a problem like in other cases where token prices only go up. We want to move the LPs to Balancer 80/20 or 95/5 pools that have minimal IL by design.
Is there any plan to simplify the mint+LP, development of uSTONKS and uGAS vault, users only need to deposit with one click, wait for the benefits, and save a lot of gas costs?
First up: We are currently building a kick-ass version for the degenerative.finance website. This will be best in class and make the whole process incredibly simple, even for DeFi-beginner.
We are currently in the process of building a uGAS vault in a collaboration with another project. Building a vault requires an audit process due to the fact that funds can be lost from the multiple transactions inside of the strategy. It is much more complicated than our current processes but it is something that we know the value of and are actively building.
However, one thing we did: Extend the maturity of uGAS to quarterly. This way, any synth sponsor can “set and forget” their position for an entire quarter. That means that there’s only one open and one close transaction necessary. We might extend that maturity even further (ie 6 or 12 months), subject to user feedback.
3. DAO House
When will YAMHOUSE open the investment channel to the public, and if ETH falls sharply in the future, is there a hedging strategy to reduce losses? What’s going on with sushiHouse?
yamHOUSE is primarily an investment vehicle for Yam DAO. It features an active portfolio manager and the strategy will change depending on the situation with the Yam DAO. Generally it is used for long term growth strategy. Generally the strategy isn’t viable for most of the public because it’s specifically designed for the Yam DAO.
If ETH or the market changes rapidly, the benefit of yamHOUSE and other houses is that they are able to react. We use statistics and analysis to adjust portfolio and overall DAO governance to change strategies.
sushiHOUSE has been posted on sushi’s forum and has been very positively received. The next step is the snapshot voting for sushiHOUSE, then implementation. We are confident that sushiHOUSE should pass their snapshot voting.
4. YAM DAO & Token
What benefits will YAM holders get from Umbrella, uSTONKS, and uGAS projects?
YAM governs the YAM DAO/ecosystem and all its products plus the treasury.
It’s been the team’s core focus since early 2021 to create a revenue model for the projects so that YAM holders will have a say over project’s fee structures and distribution. These days, a lot of DeFi projects get valued on the potential cash flows they can generate. YAM team is aware of this and is building potential revenue considerations into product designs.
In addition, it is possible to give “fee rebates” for YAM holder who stake their token. Imagine someone who uses a lot of Degenerative Finance projects.This investors could potentially save a lot of fees. This “fee rebate” and staking mechanism has not been implemented yet. We want to create adoption for Degenerative Finance and Umbrella and then the community can vote any mechanism that will accrue value to $YAM.
It’s important to understand the synergies among the projects in order to drive value to YAM:
- DAO House will drive demand and visible fees to YAM. This should increase the price.
- Any YAM incentives for Degenerative Finance will increase in value, attracting more TVL. In return, there are more people who want to create synths, creating more TVL, higher YAM price, higher APR etc.
- This will launch a flywheel of positive reflexivity that also benefits Umbrella and DAO House as well as future projects.
YAM token is a governance token, it is up to the community on how the benefits will accrue. Our job as the team is to build in potential for these benefits but ultimately it will be up to the community vote and governance process to activate.
The treasury has accumulated more than US $7.6 million. If it exceeds US $20 million in the future, will it consider buying back YAM destruction？
The treasury is YAM’s backbone to fund operations for many, many years! It is more likely we will retain the funds to further develop products.
YAM already has a very low supply which is fixed. So the benefit of buy and burn is limited. Plus, the market seems to prefer “buy & build” strategies.
A buy-&-burn mostly likely has a short-lived, cosmetic impact on the price that does not add as much value as building out the products.
The profile of YAM on Huobi, Gate Exchange and feixiaohao has not been updated. Do you have any plans to strengthen the interaction with CEX and the media and jointly carry out some marketing activities in the future?
YES! The new YAM-story is still not properly understood. We are currently creating the campaign strategy to get the word out about products, strategy and future profile.
We will get in contact with these exchanges to get our profiles updated. Any community member should please bring these kind of things to our attention. And please remind us if we don’t respond within 24 hrs :)
We know that the team has recently added some technology development, and as the scope of the business continues to expand, more talents (finance, marketing, etc.) will be needed to join. What are the plans for team expansion and how to integrate the new entrants into the YAM culture?
Exactly, we expanded the team a lot, including biz development/growth and we are onboarding some new contributors with a finance background who can help model portfolios for DAO House and create trading strategy tutorials for the Degenerative Finance synths.
We are also talking with potential contributors for marketing and community management. The YAM culture is very open so it has been and will be very easy to integrate new members.
What is the progress of the YAM roadmap and schedule update, and when will the updated roadmap be released?
The new roadmap is expected in early April. We have been keeping the community up to date with the most recent developments in the weekly governance calls and weekly newsletter. The roadmap is incredibly exciting and offers a huge potential for YAM going forward.
These questions have been great, I think a regular AMA would be beneficial for the community. Let us know if there is anything we can update to make these AMA more informative!