Yam Synths -Success Tokens and Liquidity Mining 2.0

Yam Finance
Yam Finance
Published in
4 min readOct 11, 2021

GM Yammers and Yam Synths Users!

We’re so excited to implement a new Liquidity Mining 2.0 rewards program for Yam Synths — Success Tokens! Yam Synths allow you to get exposure on the price of Ethereum Gas, Crypto Punks and more.

And now Success Tokens offer significant upside for Yam Synths participants and the YAM and UMA Communities:

  • Liquidity Providers earn a base reward with a chance for up to a 100% increase in bonus rewards.
  • Goes further in aligning farmers compensation with the underlying protocol and community needs.
  • Rewards are going up! Farmers get more rewards if the protocol performs well.
  • Upon expiry (Nov 1) the bonus portion of the October Success Token will be settled to farmers based on total TVL in the Yam Synths contract. Read on for more details!

The Success Tokens are a powerful tool to go further in aligning farmers compensation with the underlying protocol and community needs. As Minters and LPers, we now get more rewards if the protocol performs well. You can read more about the Liquidity Mining 2.0 here.

The Yam Team is very proud of our collaboration with UMA and the Risk Labs Team and are happy to adopt an innovative developer mining rewards program that is tailored to nurturing both of our DAOs.

While our APR rewards will increase in most cases, the experience for our Yam Synths farmers will stay more or less the same! Rewards will continue to be given out to users who both Mint and LP in our Sushiswap pools for their respective synths. The only change is that instead of giving out UMA token rewards, we’ll now give out Success Tokens.

What is a Success Token?

Our Success Token can be imagined as a “Range Token” that settles between 1 UMA and 2 UMA, depending on the price of UMA at expiry. This means that someone holding a Success Token can be sure that it will always be worth a minimum amount of collateral, but may be worth more if the price of the collateral increases.

We will give a quick overview below, but if you want to read an in-depth article on success tokens, check out this post.

Yam Synths October Success Tokens

The parameters of the Success Tokens for Yam Synths are as follows:

  • Expiry = Nov. 1 at 00:00 UTC (1 month)
  • Minimum payout = (1) UMA per (1) Success Token.
  • Maximum payout = (2) UMA per (1) success Token.
  • Strike price = $10/UMA (Above this price at expiry, the Success token will pay out more than (1) UMA, and at or below it, it will pay out exactly (1) UMA token.)

Risk Labs will provide 1 success token per $1,333.33 of TVL in Yam Synths Contracts, up to a maximum of 10,000 success tokens per week. Just like with the previous developer mining, YAM will then pass 90% of those success tokens on to users who mint and LP Yam Synths.

You can see more information on the payout structure in this google sheet.

What does this mean for APRs?

The question that everyone is waiting for!

First a disclaimer: APRs are subject to change and vary based on the price and TVL in the contracts.

For the most part, APRs should stay similar to the previous rewards when the price of UMA is below the strike price ($10). But, if the price increases above $10 then the APRs will increase more than they would with typical rewards since, measured in USD, you are both getting more UMA and more USD per UMA.

The APRs that you will see on the website are representative of what a user will receive based on:

  • All funds needed to Mint and LP at the current GCR
  • The current UMA price
  • The current TVL in the contract
  • The current ratio between amount of the synth minted vs the amount in the AMM pool. (If less people are LPing then the APR is higher)

Here are expected APRs for Minting and LPing at a few different UMA prices. (this assumes 90% of minted funds are LPing, the GCR of the contract is 3, and there are less than $13,333,333 in TVL in all Yam Synths contracts).

  • $8 UMA = 23%
  • $10 UMA = 29%
  • $12 UMA = 40%
  • $15 UMA = 58%

We are excited to see how the new success token rewards work in practice. We are still looking into the best ways to make a market for trading success tokens before expiry, and would love to hear more from the community about whether this is a desirable and needed feature.

Going forward, we will be continuing to work with Risk Labs to evaluate the success of this new model and will be making tweaks as necessary. At the same time, we at YAM are hard at work on the next iteration of our synths using the new LSP contracts and we will have a number of posts about how they work and what makes them unique in the next month.

As always, if you have any questions about rewards, Yam Synths, or anything else, please come ask in our Discord Server.