Proposal: Unifying YD style synths into one multi collateralized synth

UMA Protocol
1

The idea is to create one 12 month long yield dollar synth backed by renBTC, WBTC, WETH, etc. There would still be one EMP contract per collateral, but they would all mint the same synth.

It seems doable based on the code, each EMP keeps track of their tokensOutstanding without relying in synth totalSupply, but some changes would be necessary for the token and emp factories. After quickly going through the code, it seems that there are not that many changes to be made:

TokenFactory

createSharedToken
copy of createToken but keeping TokenFactory as token owner
linkSharedToken
gives an existing EMP mint and burn roles over the token
ExpiringMultiPartyCreator

createExpiringMultiPartyWithToken
same as createExpiringMultiParty without resetting owner

I havent thought that much about tokenomics and edge case scenarios, the goal here is to consider the idea and try to figure out how this would work in all the diff scenarios.

Pros:

  • Less fractured liquidity.
  • Rewards are easier to calculate and distribute.
  • “Impact”. Better to advertise a XXXm product than multiple ones with less TVL.

Cons:

  • Peg risk is distributed between all emps and holders. What would happen if one of the pegged type of collaterals loses its peg?
  • Non sponsors holding the synth at expiry may end up having to redeem for a collateral they dont want because other EMPS have already been emptied.
  • Probably more things, and that’s what this topic is about.

This proposal goes in tandem with Proposal: Using curve.fi metapools for synths pegged to ERC20 tokens which proposes the creation of a curve.fi metapool with 3pool and the proposed synth.

2

Simpler things can be considered to improve UX and liquidity is keeping the current synths as is, for example creating a Balancer pool between all the diff YD flavors and USDC.

Something like 16.6% YD-BTC, 16.6% YD-ETH, 16.6 YD-XXX, 50% USDC.

1 Like
3

Agree with the proposal, as this will actually make YD a much valuable product, especially if done for perpetual futures.

It will be more similar to dai by MKR where there’s support for multi collateral.
I guess there may be a need to do ‘debt limit’ and varying collateral requirement based on the collateral as well, e.g. PERL may have lower debt limit and higher CR as compared to WETH and WBTC.

4

The multi-synth balancer pool would work and it would be quite simple to impliment I think, but only with YDs that have the same expiry date