A Guide to uSTONKS
So you’re bullish on wallstreetbets are you? Then let me introduce you to the future of stonks, uSTONKS. What is a STONK? STONKS is just a degen way to say traditional stocks and a uSTONK is a new synthetic from Degenerative.Finance that tracks the ten most bullish Wall Street Bets stocks.
Degenerative.Finance is a collaboration between Yam Finance and UMA Protocol and is intended to function as a DeFi proxy for hype on Reddit’s WSB. It trades 24/7 and trading activity cannot be censored like some centralized exchanges.
What You Need to Start
1. METAMASK account
2. ETH for GAS
3. USDC — the amount of USDC you want to allocate to minting uSTONKS, collateral for the uSTONKS, and also an additional equal amount of USDC to your uSTONKs if you want to provide liquidity on Uniswap. As of the making of this video, the minimum amount you can buy is 1 uSTONK.
Minting uSTONKS
The first thing you need to do is head to the uSTONKS page and connect your Metamask.
Quick disclaimer: When people talk about bleeding-edge tech, this is the absolute bleeding edge of DeFi and Fintech. This is an experimental token — so users should proceed with caution and take the time to understand the token.
The token we are going to mint is uSTONKS-APR21 and it will expire at 4:00 PM EST on April 30th. Not too long after is when you can redeem your tokens. The APR21 is for April 2021 and not April 21. The exact closing prices on the NYSE and NASDAQ for each stock will be used to calculate the final settlement of the uSTONKS index. The index price will use a 2-hour Trade Weighted Average Price in order to help balance the price since this synthetic asset trades 24/7 whereas the underlying stocks do not. In order to get everything populated with data, you need to select the token you want from the dropdown menu. For this example, we are selecting USTONKS April 21. Now enter the amount of uSTONKS you would like to mint, the minimum is 1 uSTONK. After entering the amount you would like to mint it should populate the minimum Global Collateral Ratio (GCR). This is the minimum amount of collateral in USDC that you need to deposit in order to mint. If you would like to lower your risk of liquidation you can deposit more and raise your GCR.
The Chart: Track how the price of the index has been trading on a daily basis.
APR: Earn high APR rewards in YAM & UMA by becoming a liquidity provider on UniSwap.
Asset: Current price uSTONKS is trading in USDC
TVL: Total Value Locked in uSTONKS
Watch your Risk Levels: This is the percentage the index needs to increase by for you to get liquidated and this percentage is set using the Global Collateral Ratio.
Index: The current price of the index is trading in USDC
TWAP: 2-hour Trade Weighted Average Price
Liquidation Price: The price that if the index goes above you would get liquated, this is based on the 2-hour TWAP. You do have the option to come back and deposit more collateral so keep that in mind you can raise this number and we will review this within some of these other tabs in a second.
Collateral Ratio (Global): The minimum collateral ratio you can have but you can increase the ratio by depositing more USDC if you want less risk of getting liquidated. When you first type in the number of uSTONKS you want to mint it is going to show you the minimum global collateralization ratio that you need. To get this number divide your total collateral by the price of the index. In our case, we are going to go a bit above the GCR and deposit $900 USDC which gives us a Current tx CR of 3.3322, notice how now the price of the index would now need to increase by 166.57% before liquidation.
Deposit, Withdraw, & Redeem Tabs
Deposit: After you’ve minted uSTONKS you could come here to add USDC if the price was getting close to liquidation. After you deposit more collateral your GCR would increase.
Withdraw: I’m not going too deep into this because it is a bit more complicated but know that you can withdraw some of your collateral instantly up to the minimum collateral ratio and if you want to withdraw below the GCR you can request it but it takes 2 hours to get approval and then you can come back and withdraw from here.
Redeem: If you wanted to reduce your position at any time you could come here and return some of your uSTONKs reducing your debt position but you can’t go below 1 uSTONK. Also, you can only do this if you’ve minted from this Dapp and cannot do this if you bought uSTONKS on Uniswap. Once the token expires on April 30th at 4 PM EST there will be 24–48 hours to settle the price of the asset and then a 24–48 hour time lock before you can redeem your uSTONK and get your collateral back. This is where you would come to redeem your uSTONKS and get your collateral back both if you minted from here or bought your uSTONKS on Uniswap.
Become an LP on UniSwap
The APR is earned by minting and providing liquidity on UniSwap. If you want to become a liquidity provider on UniSwap you can add your uSTONKS and USDC to the respective pool.
That’s it, now you’re ready for the future of wallstreetbets!
Resources
Official uSTONKS website: https://degenerative.finance/
uSTONKS Explanation: https://docs.degenerative.finance/synthetics/ustonks/ustonks-explanation
Degenerative Finance uSTONKS User Guide: https://yamfinance.medium.com/degenerative-finance-ustonks-user-guide-415cbb6abf45
uSTONKS Index for degenFi docs: https://docs.google.com/spreadsheets/d/1dZ9X4WH2Q_6aezJPHqIE6Iy3W---utqABvMlYkdZ-ZI/edit#gid=0
uSTONKS & uGAS Collateral Management: https://docs.google.com/spreadsheets/d/1lqq43FBJqzRHNVGvjuvsJtuF85zPgvFl5I0V9by1ZhM/edit#gid=0
Token Contract Address: (uSTONKS_APR21)
https://etherscan.io/token/0xec58d3aefc9aaa2e0036fa65f70d569f49d9d1ed
UniSwap uSTONKS/USDC Pool: https://app.uniswap.org/#/add/0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48/0xec58d3aefc9aaa2e0036fa65f70d569f49d9d1ed
YAM Finance: https://yam.finance/
UMA Protocol: https://umaproject.org/
I hope this overview of uSTONKS was helpful and if you’d like to watch a video walk-through of the Dapp here you go:
Cheers,
Jonathan
PS: I found out about this project from the Blockzero Labs community. It’s an awesome community that’s driven to help build our decentralized future. Become a citizen today: https://blockzerolabs.io/
