What is Yama?
Yama is a novel omnichain stablecoin that makes CDPs as efficient and powerful as possible. By having fast liquidations and incentivizing liquidity using interest from borrowers, the protocol allows for significant leverage (10x+), high liquidity, and more.
This protocol is initially deployed to Arbitrum. It will later be deployed to Fuel and Eclipse.
In short, Yama has a smart contract called the PSM. This lets anyone swap between Yama and USDT without slippage or fees. Users can lend their USDT to the PSM to earn yield. Borrowers can borrow Yama against deposited collateral. They pay interest on the Yama they borrow, and the interest largely goes to the lenders.
The PSM is not a new concept, but no other stablecoin has used the interest from borrowers to directly incentivize liquidity. In other words, Yama is the first stablecoin to have "lenders," i.e. a two-sided marketplace. The protocol ignores DEXs like Curve and Balancer and simply prioritizes its own internal liquidity.
By doing this, Yama becomes very liquid with an extremely efficient lending market, while maintaining high safety. As a result, Yama has the following benefits:
- The highest leverage out of any stablecoin
- Very high liquidity relative to market cap, possibly the highest
- Zero-fee, zero-slippage swaps between Yama and USDT
- High stablecoin APYs without being the first line of defense against bad debt, as with Liquity/Vesta/etc.
- Omnichain in a more decentralized and scalable way than any other stablecoin
- Resilient to USDC depegs
Yama aims to be the ultimate stablecoin.