Degenerative Finance uSTONKS User Guide

We’re happy to share a visual guide on how to use uSTONKS on Degenerative Finance!

This ELI5 handbook will showcase how to use all of Degenerative Finance’s features to create, trade, and manage your uSTONKS.

Dive in below to explore how to:

  • MINT + LP uSTONKS (and earn UMA + YAM rewards!)
  • LONG uSTONKS
  • SHORT uSTONKS
  • MANAGE YOUR uSTONKS
  • SETTLE uSTONKS (after purchasing)
  • REDEEM uSTONKS (after minting)
  • COLLATERAL MANAGEMENT

Since our Degenerative Finance site is a work progress, we’ll update this guide regularly as we develop our UI + incorporate new Degenerative features!

Our Degenerative Finance front-end allows you to mint uSTONKS and provide liquidity to the uSTONKS/USDC pool on Uniswap. Doing both will allow you to earn UMA and YAM Rewards.

To begin, start visit: https://degenerative.finance/

1. Select uSTONKS to Connect Wallet

2. Select uSTONKS April 21 from the dropdown menu.

uSTONKS-APR21 will expire at 4:00 PM EST on April 30, 2021.

At that date the token will settle at the price of the underlying assets.

3. Enter amount of uSTONKS you want to Mint

The USDC Collateral amount will update automatically based on uSTONKS input.

Please note to qualify for the NFT reward you need to mint at least $10,000 in USDC.

If you don’t have enough USDC, click on “Buy USDC” to swap your tokens for USDC on Uniswap.

4. Click on “Approve Token” to give Degenerative Finance permission to mint uSTONKS, and then click the button again to mint your uSTONKS!

Congratulations! You’ve minted uSTONKS!

To recap: “Approve Token” only approves the contract and gives permission to Degenerative Finance to deposit USD and Mint uSTONKS.

After approving, you need to click the button a second time to confirm the order to Mint uSTONKS.

You’ve done the hard part, now it’s time to Provide Liquidity in order to earn UMA, YAM, and NFT Rewards.

5. Click on the LP/Trade Button and select LP

6. You’ll be re-directed to the Uniswap page. In Uniswap, input an equal amount of uSTONKS and USDC and confirm.

7. That’s it! You’ll now receive uSTONKS/USDC Uniswap Pool Tokens. Holding onto these tokens will make you eligible for UMA and YAM Rewards each month.

UMA and YAM Rewards will be airdropped each month to Mint + LP users proportionally to their share of the pool.

Do you feel like the Wall Street Bets’ stock picks will soon moon, you can purchase and long uSTONKS!

To begin, go to our uSTONKS site: https://degenerative.finance/

1. Select uSTONKS to Connect Wallet

2. Select uSTONKS April 21 from the dropdown menu.

uSTONKS-APR21 will expire at 4:00 PM EST on April 30, 2021.

At that date the token will settle at the price of the underlying assets.

5. Click on the LP/Trade Button and select Trade

4. You’ll be re-directed to the Uniswap Swap page. Just swap your USDC to uSTONKS!

You now hold uSTONKS!

You can trade it again or simply hold it until the end of the month and let it settle at the underlying index asset price.

If you feel like either the uSTONKS prices or the underlying r/WSB stock pick prices are too high and unsustainable, you have the option to short uSTONKS (and not affect the underlying stock pick prices.)

To short uSTONKS, you need to first mint uSTONKS and then sell it on the open market.

To begin, go to our uSTONKS site: https://degenerative.finance/

1. Select uSTONKS to Connect Wallet

2. Select uSTONKS April 21 from the dropdown menu.

uSTONKS-APR21 will expire at 4:00 PM EST on April 30, 2021.

At that date the token will settle at the price of the underlying assets.

3. Enter amount of uSTONKS you want to Mint

The USDC Collateral amount will update automatically based on uSTONKS input.

Please note to qualify for the NFT reward you need to mint at least $10,000 in USDC.

If you don’t have enough USDC, click on “Buy USDC” to swap your tokens for USDC on Uniswap.

4. Click on “Approve Token” to give Degenerative Finance permission to mint uSTONKS, and then click the button again to mint your uSTONKS!

Congratulations! You’ve minted uSTONKS!

You’ve done the hard part, now it’s time to trade your uSTONKS for USDC in order to short uSTONKS.

It will take a moment for your minted uSTONKS appear on the UI the interface (next to “Position Outstanding uSTONKS-APR21”.) You can take a look at the transaction hash and check your wallet on Etherscan to avoid any doubt.

6. Click on the LP/Trade Button and select Trade.

7. You’ll be re-directed to the Uniswap Swap page. Sell your uSTONKS for USDC.

8. When uSTONKS prices drop, purchase your original amount of uSTONKS with USDC, or wait until the contract expires to withdraw your remaining collateral.

If you purchase uSTONKS at a lower price, you can now redeem your uSTONKS for your original collateral back and pocket the difference in prices as profit.

You also have the option to let the contract expire and withdraw your remaining USDC less the settled value of the uSTONKS you sold.

Managing your collateral is an imperative step in the process of minting uSTONKS.

1. If the price of uSTONKS rises too high, your collateral ratio (C.R.) drops. If your C.R. falls below 2, you face higher risk of liquidation. You can increase your C.R. by selecting “Deposit” and adding USDC to your position.

Once you’ve inputed the USDC you hope to add, click on Approve. Once you’ve approved, confirm the transaction.

2. If your C.R. is comfortably high and you want to be more capital efficient, you can withdraw USDC up to the “Global Collaterization Ratio.” Select “Instant Withdraw” and input the desired amount of USDC you’d like to remove.

Once you’ve inputed the USDC you’d like to remove, click on Approve. Once you’ve approved, confirm the transaction.

3. If you want to withdraw more USDC and lower your C.R. below the Global Collaterization Ratio, click on “Request Withdraw” and input the amount of USDC you’d like remove.

Please note that this option is only for advanced users. Only use request withdraw if you have experience with Degenerative Finance products. Please reach out on our Discord for any clarifications.

Once you’ve inputed the amount of USDC you’d like to remove, click on approve. This will initiate a 2 hour wait period to ensure that you do not withdraw below the “Minimum Collateral Ratio.”

Your USDC will be placed in a holding area for you to claim after 2 hours.

4. Once the two hours have passed, you can click on “Withdraw” to finalize withdrawing your USDC.

Of course, please be cautious selecting this option as withdrawing up to the Minimum Collaterization Ratio exposes you to significant liquidation risk if the prices swing too much.

1. If you minted uSTONKS, you can redeem your uSTONKS for your USDC collateral back anytime. Click on “Redeem,” enter the amount of uSTONKS you’d like to redeem, and then click on “Approve EMP.”

Please note: You need to hold the same amount of uSTONKS that you originally minted in order to get your full collateral back. If you only want redeem a partial amount, you need to redeem a minimum of 1 uSTONKS token.

Once you approve the EMP (ExpiringMultiParty) to redeem your uSTONKS for USDC, the “Approve EMP” button turns into a “Redeem” button.

Click that button again to confirm the redeem process and receive your USDC!

1. When uSTONKS expires, you can go through a “Settle” process to exchange your uSTONKS for USDC at the price of the underlying assets.

Click on “Approve EMP to Settle” (This button will only be available after token expiry.)

After you’ve approved, the button will turn into a “Settle” button that you can use to settle your uSTONKS for the underlying stock price.

uSTONKS-APR21 will run until end of April 2021. The token will expire at 4:00PM EST on April 30th, 2021. The exact closing prices on the NYSE, NYSE Arca and NASDAQ exchanges for each stock will be used to calculate the final settlement of the uSTONKS index.

Collateral management is essential for anyone who mints uSTONKS. We have built in a number of mechanisms to make the process failsafe for you!

Just be aware of the below in order to enjoy the full benefits of degenerative.finance:

  • Always keep the collateral ratio above 1.25x to be safe!
  • When minting a new position, you can only mint at the GCR which has historically been significantly above the 1.25x threshold to allow for significant buffer. Hence, there’s no chance for fat finger errors.
  • There is a collateral ratio monitoring tool (available on YAM Discord and soon as Telegram bot and email bot) that alerts you if your collateral ratio falls below 1.35x. Watch this!

The chart highlights by how much 2hrs TWAP would have to rise from a given collateral ratio (CR) to get your position CR to the 1.25x liquidation threshold. For instance: If GCR is 4x at time of minting, your position CR is 4x too. The 2hrs TWAP would have to rise by 220% in order for your CR to fall to 1.25x.

In case you fall below your comfort zone collateral ratio, you should top up your collateral position OR redeem the synth and retrieve your collateral

The liquidation price is based on 2hr TWAP. Price spikes are evened out and thus this mechanism protects against sudden liquidations.

Refer to this spreadsheet to simulate collateral levels for your position.

Thank you for taking the time to read through our Degenerative Finance User Guide! This page will be updated regularly as we work on improving our UI.

For more in-depth insight into uSTONKS, please see our documentation page.

If you have questions, please feel free to reach us on Discord!

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