Overview

Y2K Finance is a marketplace where you can buy and sell stable coin/token wrapper risk. If you are looking to hedge against a stable coin/wrapper, you may put up a “premium” in order to combat a possible black swan/de-pegging event. On the other hand, if you believe a stable coin/wrapper position will hold it’s peg, then you may sell risk, and receive rewards in return (assuming you aren’t liquidated). There are also different levels of risk you may choose, with the riskier tiers being more highly rewarded. These risk vaults operate in epochs, where you can only deposit in a vault before an epoch begins. Each epoch lasts 1 month, and during this time your funds are locked until the end of that epoch. While locking may scare you off, Y2K’s next product, “Wildfire”, is meant to ease those concerns. Once you have locked your funds into a vault, you receive a semi-fungible token, which is redeemable for a portion of your deposits and rewards in the collateral vault. Anyone is able to trade these tokens, giving more options to traders and depositors looking for liquidity or exposure. Y2K’s last product (that we know of), is named “Tsunami”. Those of you familiar with GLP, Tsunami will work very similar to that. Y2K takes the collateral deposited from LPs and merges it into one large pool. People will be able to provide liquidity to “Collateral-Debt Obligation (“CDO”) NFT tokens”. The users who provide liquidity for the CDO NFT receive a portion of earnings from liquidation events, similar to GMX’s GLP model. It looks like Y2K will launch on Arbitrum first, and will probably expand to other chains. They will launch with DAI, USDC, FEI, MIM, stETH, wBTC, and FRAX vaults, but plan to increase their offerings, which I’ll go over more in the roadmap section.

Team

Y2K Finance is a New Order incubated project, which is a DAO that focuses on building projects from the ground up. New Order is behind some big projects such as H20, Frogs Anonymous, and most famously, Redacted. The team has proven themselves in the past, which is why I’m sure they’ll be able to deliver another stellar product into DeFi.

Roadmap

Shortly after launch, Y2K plans on releasing…

• Multichain stable coins
• Rebasing mechanisms to prevent position dilution in each vault
• CDOs
• Peg arbitrage vaults
• Ability to lend semi-fungible tokens (for leverage and short-selling)
• Auto-compounding of Y2K hedge deposits

Token?

In their whitepaper, Y2K does confirm some sort of “Y2K Token”, but doesn’t release any expected dates or tokenomics for it. After looking around in the discord, there is speculation that it could be an airdrop for $NEWO stakers, as this is a New Order incubated project. Keep in mind this is complete speculation and remember to treat it as such.

Conclusion

• Is it needed? In an environment where de-peggings are are occurring frequently, a way to hedge your stablecoin risk is a fantastic tool
• Is the team capable? Y2K is built by a team with proven experience and who have built extremely successful products in the past
• Is there value accrual? Tokenomics are currently unknown, but based on the Real Yield movement and Redacted moving their token to a value accrual model, I would not be surprised for Y2K to do something similar
• Does it have a moat? At the current moment in time, I don’t see any other projects attempting something like this. Y2K’s moat will probably be in it’s liquidity/volume, but those metrics aren’t something we can measure before launch, so it’s hard to tell whether Y2K will have a solid moat or not.