Y2K Finance remains the only protocol of its kind in DeFi, accommodating a previously unanswered (and rapidly growing) demand for exotic risk markets. In just six months, V1 has seen over $100 million in total volume and $800k in fees. Y2K has already begun cementing itself as the go-to solution for peg insurance in DeFi, and has vaults for 10 different pegged assets today.
In the long run, we intend to build a comprehensive product stack for anyone seeking exposure to the performance of stablecoins, liquid staking derivatives, and other wrapped tokens. Our Earthquake product is the most central facet of this vision thus far, however there are additional features to be added for V2 than what we even share below.
We’re excited to introduce V2, the ultimate marketplace for hedging, underwriting, and pricing the risk of pegged assets.
Main feature highlights include:
- Improved UX with Carousel, the staple feature of V2. Carousel facilitates automatic rollovers and the ability to deposit for the next epoch at any time, even when the previous epoch is still live. Depositors also start earning $Y2K right when the epoch starts, rather than having to wait for vault openings.
- New revenue streams for the protocol/$vlY2K holders with the new “information tax”. This is a deposit fee for Earthquake vaults which increases linearly as an epoch gets closer to starting. This gamification levels the playing field between early and late depositors, closing the gap on any information asymmetry.
- Expanded flexibility for oracles and depositable assets. Vaults now have a limitless selection of oracle providers for price feeds, and this means more pegged assets that Earthquake vaults can be built for. Similarly, Earthquake now supports other ERC-20s besides $WETH for vault deposits.
- Open Builder Platform codebase is now ready for builders to build on top of for maximum composability with other protocols. Building on top of Earthquake enables use cases to expand beyond its current reach and serve the broader DeFi ecosystem. Builders have the opportunity to create imaginative solutions like never before.
Together, these features make Earthquake an exponentially more powerful product than it was before. Depositing, rollovers, and earning rewards are all made simple thanks to Carousel, and $vlY2K holders get an additional source of fees from the new information tax. Protocols can effortlessly build Earthquake into their own products, and Y2K can start building its own novel in-house products on top of Earthquake. In short, V2 is a huge step in realizing Y2K’s full potential as a cornerstone of DeFi.
Carousel lets V2 users opt into automatic rollovers for their vault deposits. Users can stay in a vault as long as they want (or until they get liquidated), and can opt out of the rollover at any point before the next epoch starts. This is a big improvement from V1, where users had to withdraw and redeposit manually every epoch.
Another downfall of V1 was users couldn’t deposit for the next epoch until the previous epoch ended. In V2, Carousel introduces a new deposit queue so users can deposit 24/7 rather than having to wait for deposits to open. No more timing deposit windows, no more confusion for new users trying to deposit during an active epoch. Carousel makes using Earthquake an easy and straightforward experience for everyone.
(NOTE: 24/7 deposits DO NOT let users participate in an epoch that is already live, early depositors will always be queued for the next available epoch)
Carousel Keepers are the magic behind automatic rollovers and 24/7 deposits. After making a vault deposit, users can choose to sit back and let Keepers rollover their funds every epoch until they opt out. To pay for gas, Keepers collect a small fee from depositors every time funds are rolled over. They also empty the 24/7 queue every time the deposit window opens for a new epoch.
Because users can now queue up any time before the next epoch, the actual deposit window can now be flexibly reduced to as low as 30 minutes (but can be higher). This only impacts users positively, since it maximizes the amount of coverage they get every epoch. For example, a 30-minute deposit window for the weekly epoch would leave users 6 days 23 hours and 30 minutes of coverage, rather than the previous 2-day deposit window which left just 5 days of coverage.
With V2, Earthquake can leverage any oracle provider for price feeds. This oracle flexibility massively expands the selection of pegged assets that can be listed on Earthquake (e.g. any asset with a Uniswap liquidity pool). Vaults can finally support long tail pegged assets which coincidentally need peg insurance the most.
Vaults are now also able to accept any other ERC-20 asset options for deposits, rather than only accepting $WETH. This opens up a slew of possibilities including being able to use Earthquake as a yield opportunity for every asset potentially chosen for deposits. This increased flexibility with V2 allows Y2K to remain open to future possibilities that have not been fully imagined as of yet.
The “information tax” is a new deposit fee for vaults that linearly increases as an epoch gets closer to starting. Simply put, those who deposit closer to the epoch’s start will pay a higher fee which gets passed down to $vlY2K holders.
Although $Y2K rewards solve the “chicken-and-the-egg” liquidity problem, this does not fully compensate for the existing information asymmetry among depositors. In V1, depositors could wait until right before a deposit window closed and incur no penalty. In fact, 30% of our TVL comes from deposits made in the last 30 minutes of a deposit window. These late depositors have a major advantage over early depositors who are already locked in, since locked-in depositors cannot adapt to new market information.
The new V2 deposit tax mends depositor information asymmetry, gamifying the deposit period to encourage earlier deposits. Late depositors incur a fee for the informational advantage they possess, and this levels the playing field to ultimately benefit everyone.
- Early depositors have a level playing ground
- $vlY2K holders get a new source of ongoing revenue
- All users get more accurate risk pricing
V2 makes building composable legos on top of Earthquake easier than ever. This new codebase opens the floodgates for new integrations and innovation for both internal and external development. For Y2K, this means the ability to seamlessly integrate Earthquake as foundational infrastructure for any future products including Wildfire, Tsunami, and 3rd party developments.
For builders, the possibilities are endless. Just a few examples include:
- A protocol offering insurance to Liquidity Providers of pegged assets
- DAOs building custom insurance products for their own pegged assets
- Protocols building Hedged Farming Vaults so yield farmers can get better protection from the pegged assets they’re exposed to
With a more flexible codebase, Y2K can expand to reach more users in the broader DeFi ecosystem and add more novel products to our own suite. V2’s composability means more users and use cases, while building the core infrastructure for even further vlY2K value accrual.
Other improvements we’re making include one-click $Y2K rewards. In V1, depositors would need to take their vault share and stake it in a farm contract to earn $Y2K. This was confusing and tedious for new users, and many missed out on $Y2K rewards that they could’ve been earning on their deposits. With V2, depositors will start earning $Y2K right when the epoch starts; no more two-step “deposit and farm” process. Now every depositor gets $Y2K rewards without having to do anything beyond making their initial deposit.
In addition, vaults are no longer using the “Risk”/“Hedge” terminology, but rather will be named “Premium” and “Collateral” vaults respectively, as a welcomed improvement in user-friendly terminology.
DeFi users need robust infrastructure to speculate on or hedge their exposure to pegged assets. Earthquake is pioneering a risk market that allows users to express their conviction in the perceived stability of such assets. V2’s new composability, flexibility, and improved UX empowers Earthquake to better serve the broader DeFi ecosystem. The implications of this update are massive for Y2K and its ambitious vision.
The V2 codebase lets other protocols seamlessly integrate Earthquake, and enables Y2K to build out new products for our own users. Flexible oracles mean that vaults can be created for more pegged assets that weren’t listable before. Earthquake vaults can now add any ERC-20 asset to accept for vault deposits, and holders of these assets can use Earthquake as a new way to earn yield. Carousel massively improves user experience, with rollovers and one-click $Y2K rewards making Earthquake easier to use than ever before.
V2 is only the beginning in Y2K’s journey to become the ultimate marketplace for pegged asset exposure. We couldn’t be more excited to continue forging ahead on this path together with you Doomies 🙂💥.