A Walk-through of UMABILLS
What are UMABILLS? Tokenized yield dollars that earn passive yield, built on the UMA Protocol. A yield dollar is similar to stablecoins, with a few important differences:
1. It expires (a perpetual is under works)
2. As the date of expiry approaches, its price will approach $1
3. When it expires, it will be redeemable for $1 of the collateral asset at the exact time of expiry
4. Put together, the yield dollar represents a fixed-rate, fixed-term loan
UMABILLS is a community-powered initiative to build a better working model of UMA’s Yield Dollar, that offers the best returns and rewards to you — the everyday DeFi user. Not only are you rewarded via UMA’s Developer Mining Program rewards, but they also kickback a percentage of their DApp Mining Rewards, to give you the absolute best yield available.
Before we get into the walk-through know that you can always jump on the UMA Discord if you have any questions. Also, if you’d like to watch an overview of UMABILLS I made an animated short. As of writing this the Total Value Locked (TFL) for UMABills is $34,024,719.905 with the current UMA price at $23.
UMABILLS has a nice tracking segment on its homepage that shows you the TVL, collateral supplied, UMABILLS outstanding, global collateral ratio, collateral requirement, collateral price, and the expiration date for each asset.
Currently, there are four yield dollar options: wETH Jun 2021, wETH Dec 2021, renBTC Jun 2021, and renBTC Dec 2021. The dates in each asset represent when they expire, for example, wETH Jun 2021 expires on June 30th, 2021. After the expiration date, there will a 24–48-hour settlement period before you can redeem your yield tokens.
How to Mint
To mint, choose the yield dollar you’d like to use, in this example we are going to mint wETH Jun 2021. The first thing you need to do is connect your Metamask in order to interact with the Dapp and mint the synthetic tokes via their EMP contract. As of April 2021, you must mint at least 100 UMABILLS. If you wanted to mint 1000 UMBILLS you would need to deposit the minimum global collateral ratio which is set 2.413. If you tick the “automatically adjust values to above GCR” box it will populate the minimum amount which in this case is 1.23 wETH. The GCR is set at that level to give you a fairly safe ratio to avoid liquidation. If you wanted to increase your GCR you can deposit more wETH. Once you feel confident in your position you can “Mint UMABILLS” and approve the transaction via your Metamask.
Post Transaction
Once you’ve minted your bright and shiny new yield dollars you could come back to this page and add collateral, withdraw collateral, and once the contract is expired redeem your synthetics here. For the wETH June 2021 token, you would come back on July 1–2 to redeem. They even have a wETH converter to wrap or unwrap ETH to make things easier.
Getting that APR
If you’re interested in earning some rewards on top of the potential yield from the tokens you minted you can deposit UMABILLS to the corresponding Balancer Pool (wETH Jun 2021 Balancaer Pool). Not only does this qualify you for UMA rewards, but it also entitles you to receive Balancer rewards too! You can easily use this utility to either add liquidity to the pool (by posting UMABILLS & USDC) or remove liquidity you have already added to the pool.
That’s a wrap (pun intended), happy minting and remember if you have questions to reach out to the UMA Discord.
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/
