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UMA’s Yield Farming Yield Dollar

Jul 25, 2020 · 3 min read

By Paul Burlage

Yes, you read that correctly. UMA, the decentralized financial contract platform, released its third synthetic token – the yield dollar, yUSD. Additionally, UMA decided to add liquidity mining incentives for LPs that provide yUSD liquidity to the yUSD/USDC Balancer pool. Let’s break down this product.

y-USD-SEP20

Without going into too much detail, the yield dollar is a token that represents a zero-coupon bond. yUSD-SEP20 settles to $1 (the target asset is USD) on September 1st, 2020 (target date), and backed by ETH (current collateral). At the time of expiry, the yield dollar is directly redeemable for $1 worth of collateral.

The UMA team released a very helpful piece that walks through yUSD.

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