Spreadsheet to determine the split of collateral for minting and LPing
Spreadsheet to simulate Collateral Ratios and TWAPs
Minting uSTONKS can be done by depositing USDC as collateral on our Degenerative Finance site.
When minting new synthetics, you can choose any CR (Collateralization Ratio) you like as long as it’s above the GCR (Global Collateralization Ratio.) This provides a failsafe against under-collateralization errors for first-time users.
For example, in a scenario where:
- You have 840 USDC of collateral
- The GCR of 4,
- uSTONKS has a value of 210 USDC
You can mint exactly 1 uSTONKS token (840 / 4 = 210).
As is the nature of collateralized assets, you lock in an amount of USDC greater than the value of the uSTONKS you are minting and maintain a ratio of collateralized funds to your minted position. This allows you to retain exposure to your collateral assets while leveraging these assets as a loan (in the form of synths).
To earn $YAM and $UMA rewards, you need to Mint and LP uSTONKS Tokens.
Mint uSTONKS by depositing USDC
Provide uSTONKS and USDC as Liquidity in our Uniswap Pool.
How do you determine how much USDC to allocate for Minting and LPing?
USDC / GCR = uSTONKS position value. This amount needs to be matched in USDC to LP on Uniswap.
For example: If you have a collateral of 10,000 USDC and a GCR of 4,
uSTONKS Position Value = 10,000 USDC / 4 = 2,500 USDC
USDC you need to add to Uniswap pool = 2,500 USDC.
Total capital employed = 10,000 USDC + 2,500 USDC = 12,500 USDC.
This spreadsheet helps determine the numbers. Feel free to use it by making a copy and editing the cells.
While the GCR limits the amount of new synthetics that can be issued, this ratio does not have to be maintained in order to avoid liquidation. The collateral requirement for all synthetic assets is 1.25 — meaning that if your CR <1.25, a liquidator may terminate your position.
As long as your CR stays above 1.25, nothing will happen. You can increase your CR at any time by depositing more collateral into your position.
Yes, you can redeem your uSTONKS for your USDC collateral back at any time before expiry.
If you redeem all of your minted uSTONKS, you’ll receive your full USDC collateral back.
If you redeem a portion of your minted uSTONKS, you need to maintain a leftover position of at least 1 uSTONKS token. Your CR will be adjusted accordingly post redeeming uSTONKS.
For example, you deposit 8,400 USDC and mint 10 uSTONKS tokens.
- You can redeem 10 uSTONKS token at anytime and withdraw your full 8,400 USDC collateral back. The price of uSTONKS at the time of mint or withdraw doesn’t effect the amount of returned collateral.
- If you want redeem only 5 uSTONKS, you’ll receive 4,200 USDC in collateral back. Redeeming a portion of your uSTONKS will return you a collateral amount proportional to the amount of synths redeemed. Your CR will remain the same post-redeeming process.
No problem. You can just “redeem” excess uSTONKS and receive the USDC needed to LP with.
You may one day want to deposit additional collateral to your uSTONKS position to avoid liquidation. Or you may also want to withdraw excess collateral if the collateral ratio has moved in your favor.
You can withdraw excess collateral in one of two ways: “Instant Withdraw” or “Request Withdraw.”
You can withdraw excess collateral from your uSTONKS immediately, so long as the resulting CR is at least as high as the GCR. This provides peace of mind that you won’t be liquidated after making this withdrawal.
If you want to withdraw enough USDC to bring your CR below the GCR, you can do so by requesting a withdrawal. This is a two part process: you first submit a withdrawal request to the uSTONKS smart contract that indicates the amount of collateral you wish to withdraw and the timestamp of the request.
During a two-hour period, the ecosystem checks to see if the withdrawal brings the CR below the Minimum Collateral Ratio (1.25.) If this happens, you will be liquidated.
If this process elapses without liquidation, you can withdraw collateral from your position up to the amount requested.
Please note that the “Request Withdraw” is for advanced users only. Please only use this option if you are very familiar with the UMA and Degenerative Finance interface and mechanism.
You are able to cancel a withdrawal request. While this functionality is not available on our UI (but will be in our Degenerative Finance V2 update!) you can call the action on Etherscan:
1. Go to the uSTONKS EMP contract on Etherscan: https://etherscan.io/address/0x4F1424Cef6AcE40c0ae4fc64d74B734f1eAF153C#writeContract
2. Navigate to the contract tab and click on “Write Contract.”
3. Click on “Connect to Web3” and connect your wallet (Metamask or Wallet Connect, for example.)
4. Click on “Cancel Withdrawal” and then click “Write.”
5. Follow prompts to sign and send transaction with your Web3 wallet. If you are worried about liquidation, use a normal or fast gas price.
6. Wait for transaction to be mined.
At expiry, uSTONKS settles at the NYSE and NASDAQ prices of the underlying ticker assets.
If you purchased uSTONKS on Uniswap, you can let the token expire and settle your uSTONKS at the price of the underlying collateral (uSTONKS price (at expiry)*number of uSTONKS held)
If you minted uSTONKS and the position is still open at expiry the contract will calculate the value of the tokens you minted and unlock the rest of your collateral.
For example, you deposited 8,400 USDC and minted 10 uSTONKS tokens. At expiry the index price is calculated at 420 USDC per token. The 10 uSTONKS tokens are worth 4,200 USDC. You can settle your 10 uSTONKS for 4,200 USDC. The remaining 4,200 USDC will be unlocked from your collateral.
In case you sold or lost 1 uSTONKS, you would still hold 9 uSTONKS and be able to claim 8,400 USDC — 420 USDC = 7,980 USDC at expiry.
2 Hour TWAP Price is the Time Weighted Average Price from the last 2 hours on the highest liquidity Automated Market Maker pool (Uniswap for the time being.)
The 2 Hour TWAP is used to: a) Calculate the number of synths that can be minted b) Calculation basis for liquidations