Minting and Burning

The acts of creating and terminating synthetic assets on the platform are called minting and burning. This works as follows:

Minting

Once a user has connected its wallet to youves, it can open and fund a vault. After the vault has been funded with eligible collateral (e.g., XTZ), the user can mint synthetic assets in its vault up to a limit, which is based on the value of the collateral. Specifically, at the time of minting, the USD value of the collateral needs to reflect at least target collateral ratio (e.g. 300% for uUSD) times the target USD amount of the minted youves tracker tokens.

Minting Fee

The platform will deduct 1.5625% of the minted youves tracker tokens as minting fee, which will be part of the platform revenues. The owner of the vault is now a minter and the related target amount of collateral is locked in a smart contract on youves.

Tracking

Upon minting, the vault tracks the oustanding youves tracker tokens. It is the minter's responsibility to keep the collateralization ratio above the emergency collateral ratio (e.g. 200% for uUSD), otherwise the vault becomes available for a step in.

Interest Rates

The outstanding youves tracker tokens in a vault are subject to an interest rate.

Tradability

The youves tracker tokens can be transferred, purchased and sold.

Baking Rewards

Minters will receive 100% of the baking rewards on the collateral, where applicable, after deduction of 3rd party fees for baking, which are directly deducted by the respective 3rd party baker.

Burning

If minters want to retrieve the locked collateral, they can post the outstanding synthetic assets into the vault and burn the tokens. The collateral will then be released.

Minting Example Diagram, using tez Collateral