Version: Next

Mint and Farm yUSD

This tutorial will show you how to mint yUSD and farm them on a Balancer pool to get BAL and also UMA tokens via the experimental UMA liquidity mining program. It's a simple two-step process and should take you no longer than a few minutes (subject to network congestion).

Useful Links

Step 1: Mint yUSD

Minting yUSD tokens is easy with the EMP Tools, UMA's UI for ExpiringMultiParty contracts (EMP) which is what the yUSD token is minted from.

Navigate to http://tools.umaproject.org/ and click the "Connect" button at the top right corner to connect your MetaMask wallet to the dapp.

connect

Then, select the yUSD contract from the dropdown immediately underneath the header (above the tabs).

select EMP

Select the "Manage Position" tab.

manage position tab

Scroll down to the "Actions" dropdown and ensure that "Create" is selected.

position actions dropdown

At this point, make sure you read the text and confirm that:

  1. You will be minting at a collateralization ratio above the global collateralization ratio (GCR);
  2. You will be minting the minimum required number of tokens (100 for yUSD), and;
  3. You will keep your position collateralized above the minimum required collateralization ratio (CR) or else risk getting liquidated (the required CR is 125% for yUSD).

If you fully understand the above, and have decided on an appropriate amount of (1) collateral to supply and (2) tokens to mint, check to make sure you have enough collateral for minting.

In the case of yUSD, the collateral you need is WETH, which is just ETH with an ERC20 interface. If you do not have a sufficient balance of WETH, you can easily convert your ETH to WETH via the “Wrap/Unwrap WETH” tab.

You may skip this step if you already have sufficient WETH.

weth converter

Once you have enough WETH to use as collateral, return to the "Manage Position" tab and scroll down to the form at the bottom of the page:

token minting form

In the first field, fill in the amount of collateral you want to supply.

In the second field, fill in the number of tokens you want to mint.

If these values are appropriate, you can then click the "Create" button which will trigger a transaction with MetaMask. Once that is confirmed and the transaction is mined, you shall have your yUSD tokens!

Step 2: Farm on Balancer

danger

Supplying only USDC to the pool is very dangeorus and is not recommended, because you are essentially buying yUSD on the open market. You should avoid this because yUSD will be worth $1 by the time of expiry and you will lose money if you are buying yUSD above $1.

By supplying liquidity to the yUSD/USDC Balancer pool, you have the opportunity to earn both BAL and UMA tokens. The UMA token distribution is governed by the experimental UMA liquidity mining program.

Head to the yUSD/USDC pool and click on the "Add Liquidity" button. You’ll be asked to Setup Proxy if you haven’t already

add liquidity button on balancer

Once the proxy is setup, the "Add Liquidity" button will show you a form for adding liquidity.

At this point, you might want to get some USDC so you can supply both assets to the Balancer pool. Alternatively, Balancer also supports supplying only a single-asset but that mechanism is out of scope for this tutorial.

Under the "All Pool Assets" tab, you should see something like this:

deposit assets on balancer

As with any other ERC20 token, you'll have to "unlock" (i.e. grant approval) for the dapp to transfer tokens on your behalf. Once you have done that, you can deposit yUSD and USDC into the Balancer pool in exchange for some Balancer Pool Tokens (i.e. BPT) specific to this pool.

This enables you to passively gain BAL as well as UMA in accordance to the experimental UMA liquidity mining program. If you have any questions regarding this process, please don't hesitate to reach out on Discord.

Last updated on