[Asset Onboarding Application] $UXD - UXD Protocol

Interested Party Profile

Party submitting application: UXD Protocol

Website: uxd.fi

Contact: kento.inami@soteriacurrency.com

Submission Date:

If endorsed by Jet Community Member, list here: Alexis

Application Profile

1. What is your motivation for submitting this application?

UXD Protocol believes that UXD Stablecoin would be a valuable asset to the Jet ecosystem. UXD has proven to be stable during periods of significant volatility, and has proven itself as a safe-haven asset for its holders. Moreover, UXD is the largest decentralized stablecoin on Solana, which we plan to grow in a sustainable manner.

2. What is your association to the proposed asset?

I am the founder of UXD Protocol and the day-to-day head.

3. What are the key benefits to the Jet Protocol for onboarding the asset?

Users value diversity regarding decentralized stablecoins, as it allows them to construct baskets of stable assets with risks that they deem acceptable. All stablecoins have risks, and UXD believes users should be able to choose stablecoin risk profiles that fit their risk appetites. Users may wish to hold and transact in UXD, or to borrow for arbitrage purposes with other stablecoins. As UXD grows larger, incentivized usage of UXD in the Solana ecosystem will drive activity towards Jet and other lending protocols with UXD onboarded.

4. What are the known limitations of the asset?

UXD Protocol has been very transparent about the risks of the UXD stablecoin design, please see the “Risks” section of our docs: https://docs.uxd.fi/uxdprotocol/overview/risks

Project Profile

1. Please provide a brief, high-level description of the asset’s native ecosystem (project), including protocol’s type (peer-to-peer/ peer-to-liquidity/ etc.).

UXD Stablecoin is issued by UXD Protocol, a decentralized stablecoin issuance platform for the benefit of UXD Stablecoin holders. UXD is created via a delta-neutral position, utilizing Mango Markets to short perpetual futures. Please see https://docs.uxd.fi/uxdprotocol/overview/delta-neutral-position for more info.

2. Who are the founding members? What is their current involvement with the project?

The founding member is myself. We are a team of 15+ with various roles.

3. Please indicate the ICO date, initial price and valuation of the token and total capital raised (in USD and crypto terms).

$UXP completed a decentralized IDO to raise capital for the insurance fund on November 14th, 2021. All of this capital is used to pay out negative funding rates for the stability of the stablecoin, and none went to the team or investors. The IDO capitalized the insurance fund with $57mm.

4. How much of the capital raised via the ICO was converted into FIAT (in terms of FIAT currency and amount of tokens)?

Zero. $57mm was all in USDC and remained on-chain.

5. What was the way of issuing and distributing the tokens? Were there pre-ICO investors?

The token was distributed directly in the IDO. UXD Protocol had pre-seed and seed investments: https://docs.uxd.fi/uxdprotocol/overview/uxp-token-economics

6. What is the current token distribution (project team vs. investors vs. public)?

Currently the team and investors have not unlocked yet, so all floating tokens are held by the public (or investors to the extent they purchased in the IDO). The unlock schedule can be found here: https://docs.uxd.fi/uxdprotocol/overview/uxp-token-economics

7. Are there any fees generated by the protocol? If yes, please provide details and amounts.

UXD Protocol does not collect fees. However, the insurance fund collects positive funding rates paid out by the delta-neutral position.

8. Is the protocol audited? By what firms? Please provide link(s) to the audit documentation.

Yes, UXD Protocol was audited by Bramah Systems and Soteria. Reports can be found here:

9. Is the protocol open source? If yes, please provide links to the repository.

The project is not yet open source but plans to open source later in its lifecycle.

10. Other relevant project data or comments:

N/A

Asset Profile

1. Asset name:

UXD Stablecoin

2. Asset type (native/ wrapped):

Native

3. One-sentence description of the asset:

UXD Stablecoin is a decentralized stablecoin collateralized through a delta-neutral position using perpetual futures.

4. What’s the purpose of the asset within its native ecosystem?

UXD Stablecoin’s purpose is to provide the Solana ecosystem with a decentralized, capital efficient, and stable store of value and medium of exchange.

5. Does the asset have any use outside of its native ecosystem (integrated protocols)?

Yes, UXD is integrated with various protocols, including Solend, Saber, Mercurial, Lfinity, Ratio, etc.

6. Please provide all Smart Contract address. If the project is open source, detail how the Smart Contracts are implemented.

UXD Stablecoin lives at: 7kbnvuGBxxj8AG9qp8Scn56muWGaRaFqxg1FsRp3PaFT

Asset Liquidity

1. What exchange(s) support the asset?

UXD has most of its liquidity on Saber, Mercurial, and Lfinity.

2. Does the asset have liquidity on Serum? What is the liquidity depth (resting orders)?

As a stablecoin, there is currently no liquidity on Serum because liquidity sits in AMM structures.

3. Please provide 7-day asset trading history (daily aggregated trading volumes for trading pair of asset with USDC).

7 day trading volume tends to range in the $2-5mm range, with most recent 24 hour volume at $508k.

4. Which oracles monitor the asset? How many feeds are available?

5. How often does the asset drop significantly in price? Please provide a link to the price history.

Price history can be found here: https://www.coingecko.com/en/coins/uxd-stablecoin

6. For stablecoins only: Has the asset ever lost the peg? If yes, for what reason?

The asset has never lost its peg by more than 2c in either direction for a period of > 1day. These movements were simply related to large activity in the relevant liquidity pools relative to outstanding liquidity.

The graph below shows the price of UXD since inception. UXD traded significantly above peg in the beginning due to lack of liquidity in Saber UXD/USDC pools but besides that, UXD has traded close to $1 at all times.

7. For algorithmic stablecoins only: Please provide details on the risks associated with the design.

UXD Protocol has been very transparent about the risks of the UXD stablecoin design, please see the “Risks” section of our docs: https://docs.uxd.fi/uxdprotocol/overview/risks

8. For wrapped assets only: Which bridges are used? Are they custodial or non-custodial? Are they audited?

N/A

9. What amount of asset’s liquidity exists in the integrated protocols (if applicable)?

Saber (UXD/USDC): $22mm, Mercurial: $200k, Lfinity:$1m

10. List any parties interested in taking part in liquidations for the proposed asset type.

UXD Protocol may be interested in taking part in liquidations.

Key Mechanics

1. How many active addresses/ users currently hold the asset?

1,222 unique wallets currently hold UXD.

2. Please provide a brief overview of the tokenomics.

UXD does not have tokenomics as a stablecoin, but the UXP tokenomics can be found here:

3. Is the asset supply expected to increase or decrease over time? Is there a token burn mechanism? Is the project able to mint more tokens in the future?

The asset supply of UXD is expected to increase over time.

4. Please explain the staking mechanism (if any).

There is no staking mechanism for UXD.

5. Please explain the slashing mechanism (if any).

There is no slashing mechanism for UXD.

6. Are there tokens on vesting schedule? If yes, what is that schedule and related vesture limitations?

There is no vesting schedule for UXD. However, for the UXP vesting schedule please see: https://docs.uxd.fi/uxdprotocol/overview/uxp-token-economics

7. Are any tokens allocated for specific purposes or issuance schedules (e.g. liquidity mining)?

Please see: https://docs.uxd.fi/uxdprotocol/overview/uxp-token-economics.

Legal Profile

1. Is the project or the asset owned by any incorporated organization?

The project is currently run by a Dubai-based entity, but will be run fully by the DAO in the future.

2. In which jurisdictions was the token issued?

The token was issued in agreement with law in Dubai.

3. Was the token issued as part of regulatory process (e.g. securities offering)?

No.

4. Was the token issued as part of fundraising process?

No, UXD stablecoin was not.

5. Has the project or the asset obtained any legal opinions on the regulatory standing of the token? If yes, please provide links to the relevant documentation.

No.

6. Has the project or the asset had any legal interactions? If so, describe and provide documentation.

No.

Links

Link to project’s white paper:

* https://docs.uxd.fi/uxdprotocol/resources/whitepaper

Link(s) to active communities related to the project:

* https://discord.com/invite/BHfpYmjsBM

Link(s) to project’s documentation portal/ source code for the system(s) that interact with the proposed asset:

* https://docs.uxd.fi/uxdprotocol/

Link(s) to audits - both procedural and Smart Contracts:

* https://docs.uxd.fi/uxdprotocol/resources/audits

Link(s) to legal opinions:

  • N/A.

Link(s) to other legal material:

  • Terms of Service and Use:

Other relevant links:

*Medium: https://uxdprotocol.medium.com/

Twitter: https://twitter.com/UXDProtocol

Dashboard: https://dashboard.uxd.fi/

Application (Mint/Redeem): https://app.uxd.fi/

List all relevant Solana addresses here:

  • UXD Token Address: 7kbnvuGBxxj8AG9qp8Scn56muWGaRaFqxg1FsRp3PaFT

UXP Token Address: UXPhBoR3qG4UCiGNJfV7MqhHyFqKN68g45GoYvAeL2M

UXD Protocol Treasury Multisig Address: HRYvXQVVYPVByaNFybwHcaLrJ76THvZQHe6gehAwAqhm

Depository Addresses can be found at: https://dashboard.uxd.fi/

Marketing / Campaign Material

If you have additional marketing material, recorded discussions, or collateral onboarding campaign material, link here:
N/A

7 Likes

Very well done on this application @Kento - appreciate you taking the time to fill it out.

Two main questions to kick off top of mind.

  • Does UXD have a Pyth oracle currently?

  • Do you have any data on UXD’s liquidity on Orca?

4 Likes

UXD as algorithmic and leading native stablecoin on solana is a welcome development on jet app. i don’t know if there’s any technical side of it that need to be addressed by the jet team. but as an end user, i can boldly say that many of us are ready to use UXD as collateral on jet. the proposal need to be considered diligently.

3 Likes
  1. We don’t have Pyth oracle yet, we are currently supported by Switchboard.
  2. We dont have liquidity on Orca since the majority of liquidity is on Saber but we can always provide liquidity on Orca if that is a concern.
3 Likes

Hi guys, Acammm from UXDProtocol.

Here is the Switchboard feed for UXD/USD :

2 Likes

@acamill @Kento is there a reason to have only one oracle for UXD (or assets in general)? Given that Jet currently only uses Pyth oracle data in our code, would something major prevent UXD from getting a Pyth oracle?

1 Like

Due to the experimental nature of having a decentralized stablecoin created using a delta-neutral, we would like to understand a bit more about the inner workings of the protocol before we share a decision. Do we have other cases of Stablecoins with a similar design being added to a major lending protocol? In this case, we could look at how they handled the onboarding. Can you also add the primary use cases for UXD here? Some color to what the people borrowing / lending UXD would be doing this for?

Currently, UXD only uses one oracle, and we would like to understand the risk behind this. If UXD is open to including a Pyth oracle for safety reasons and to make it easier to be onboarded to Jet protocol, that would be appreciated.

What is your opinion on UXD being used as collateral?

UXD could damage the protocol in a worst-case scenario if UXD de-pegs.If it is used as collateral, people could borrow “good” assets against it, and their debt would default, leaving the protocol with the loss. If it’s only used for deposits/borrows, then it would only be the depositors who choose to deal with UXD who would be hit. This is a similar approach AAVE takes when they onboard more experimental assets.

We believe a thorough risk analysis should be done by a risk team to help the community make a decision. In this report, we need to see the liquidity implications of using UXD and a stress test analysis of the UXD system itself. This won’t give us a definitive answer on its reliability, but it can help us define the risk parameters for adding it.

All of that being said. It looks like UXD MC is only 20 million. I dont think it’s worth to onboard it at its current stage. It can be revisited once the market cap grows to a more significant level.

4 Likes

Hello @Kento,

Thank you for taking the time to submit an application.

Due to the lack of a Pyth oracle price feed, which is a hard requirement, the JetDAO Governance Committee will not be progressing the application to token holder vote.

We will be happy to revisit this proposal once this requirement has been met.

2 Likes