YSL — Price Stability Model
The PSM is an advanced set of mechanics used in the YSL next generation DeFi ecosystem that captures advanced models, techniques and methods to secure capital. They have spent over 18-months developing and learning in this Cryptoverse to build a long term Price Stability Model. Its focus is on reducing risk all around by building interlocking mechanics to reduce the most likely attacks DeFi teams have been seeing today.
To better understand DeFi, it's worth examining the various actors involved and their respective strategies or perspectives. To fully understand YSL's journey, we need to explore the background that led to the Price Stability Model's development. Then finally a quick summary guide behind each of their mechanics that make up the Price Stability Model.
Top DeFi Actors
Users
Constantly looking over their shoulders, thinking something bad is about to happen.
Mercenaries
Hired guns, looking for the best APRs/APYs to dump the reward token using stables or other Bluechip tokens. But they are often called upon to provide liquidity to help bootstrap the communities' liquidity pools. However, they are not loyal to the protocol and once rewards start to dry up they will leave.
Whales
Whales are DeFi users with a substantial amount of protocol tokens or those who can gather them by investing significant capital. Thus, they hold a large percentage of a specific token. While vital at the start of a project, the worry is that as it expands, they may dump a significant number of tokens, resulting in a drop in prices.
Hackers
The hackers are looking for loopholes in logic or code in order to exploit the DeFi protocol. They are hunting for those big pay-days.
Mechanics
Security has been baked into this system since it was developed and validated during YSL’s deployment of its testnet. Building a layered defense is complex and requires a methodical attention to detail. The YSL team has been looking at DeFi incidents over the Cryptoverse these last several years from all angles. Through this analysis, several insights jumped out that needed to be addressed, from the user, project and partner sides.
They looked at every aspect that has affected projects and several key elements jumped out. Typically, these matters revolve around capital allocations, incessant selling of reward tokens, and ensuring that the functionality operates as anticipated (guarding against exploitation or stolen funds). The ultimate villain of our time, SBF, introduced the revolutionary practice of farming with stables or Bluechips, while continuously getting rid of reward tokens from fresh projects.
So YSL established unique mechanics that feed the system and offer unique vaults that won't negatively impact the overall YSL ecosystem. We are referring to the AlphaVault. To learn more about that, visit our article covering Simple Machine for Generating Yields.
YSL determined that mercenary and whale players only view the protocol as a means to extract yield, neglecting any other value it may hold. The team evaluated the developments of other DeFi 2.0 teams in response to their actions. If you review these countermeasures we see that some of these countermeasures worked temporary, didn’t affect the long-term out-come. It slowed it down, but it did not delay the onslaught of selling once everyone thinks the project is done.
Starting the race condition was not to be the last one holding the bag. Why did people get spooked? There's a battle for narrative supremacy on media platforms like YouTube and Crypto Twitter, where everyone strives to bring the newest stories to the public. People feel like they're missing out, which triggers FOMO. As capital moves, fear takes over and FUD spreads through social channels and communities.
It is important to highlight these sequences, so you understand what is about to happen. Every project sees it, the pre-hype window, excitement happens everyone is happy on the launch of the new platform. Shortly after launch, mercenaries and whales within the YSL ecosystem may move capital according to the latest narratives, once certain price points are reached. In YSL mechanics, the team has implemented specific limitations to manage capital outflow and promote liquidity generation.
Sigma Exit Rate (SER)
Summary: This rule sets the maximum percentage of bYSL, xYSL, or USDy tokens that you can sell within a 24-hour period.
Mechanics: Starts at 0.1%, for 2-days. After 3rd day, it increases 1% every 24-hours and after 103-days, you can sell 100% per wallet, per token.
Constraints: Have to meet DOQ and PTR as well.
Bypass Option: Yes, Phoenix Ape NFT
Exempt: YSL token
Daily Outbound Quota (DOQ)
Summary: Limiting the number of transactions per day, wallet and token.
Mechanics: Wallets are limited to a 24-hour rolling window for outbound transactions (transfers or transfer all to other wallets or selling) for BYSL, xYSL, and USDy.
Constraints: One transaction.
Bypass Option: No
Exempt: YSL token
Protective Outer Layer (POL)
Summary: Holds max 10% of Treasury and can only be interacted with another approved (white-listed) contract and nothing else.
Mechanics: Rebalances daily to ensure only 10% of treasury is held and acts as back-stop to YSL.
Constraints: Only rebalances up to 9 times inside 24-hours when it goes below 10% and resets the fill time.
Bypass Option: No.
Exempt: None.
Pool Transmittance Rate (PTR)
Summary: Limit the number of tokens that can be sold in a single transaction.
Mechanics: Based on the liquidity pool of the token being sold, means you can not sell more than the POL.
Constraints: Sell bYSL/xYSL/USDy — 0.1%; Buy YSL/xYSL — 0%, bYSL — 1%, USDy — up to $1.05
Bypass Option: No
Exempt: YSL token
Stake Transmittance Rate (STR)
Summary: Must have staked USDy equal to or more than trying to sell
Mechanics: Must have an equal amount of USDy in the AceVault before a sell transaction will happen.
Constraints: 50% of sell/transfer of USDy
Bypass Option: No
Exempt: YSL, bYSL and xYSL tokens
If you are interested in learning more, head over to YSLs documents page here on Price Stability Model (PSM).
Summary
The YSL team's goal was to create a price-stabilized DeFi model that mitigates key risks, such as yield extraction via selling reward tokens, while remaining sustainable in the long-term despite market fluctuations. The YSL mechanics limit sell pressure, allowing the protocol to build liquidity and handle future selling. Regard these constraints as akin to a regular bond that grows or matures in value over time. YSL created liquidity pools that mature in approximately 103 days, with minimal impact on the liquidity withdrawal potential due to specific time periods constraints listed above. They aim to establish a sustainable ecosystem for YSL that can incorporate the latest DeFi trends while minimizing negative impacts on the community.
So for those interested, consider using my referral link for 1% of life-time savings on the actions within the YSL platform.
- But why use someone's referral link? You need it to receive a 1% instant rebate on all transactions, deposits, and trades involving YSL tokens during your lifetime on YSL.IO. That is going to add up overtime!
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- Or you can head directly to YSL and start playing around. The downside is that if you end up using the platform, you will no longer get to use the 1% discount, that is instantly paid back to you for using the link. Since, once your wallet interacts with the platform you are categorized.
- Either you came through a referral link or not. If not, that 1% instead of going to the person whose referral link you used, then goes to the YSL team. The choice is yours.
Referral Link: YSL.IO
Further Resources about Cyber Strategy Institute and YSL.IO:
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Cyber Strategy Institute
Medium: https://cyberstrategy1.medium.com/
Twitter: https://twitter.com/CyberStrategy1
Website: https://cyberstrategyinstitute.com
YSL.IO
Website: https://ysl.io/
Telegram: https://t.me/ysl_io
Twitter: https://twitter.com/ysl_io
Whitepaper: https://docs.ysl.io/overview/welcome
Nothing in this article is to be construed as investment advice. Neither the author nor the publication takes any responsibility or liability for any investments, profits or losses you may incur as a result of this information. The article may contain affiliate links.
