[MIP-14] Approve deployment of 200k USDT to be lent out in Yama Finance's PSM module.

Category: Treasury Management and Partnerships

Objectives:

Co-market utilizing Twitter, Medium, and any other social media platforms. Earn a weekly stable yield of 10-50% on USDT dependent on GMX’s GLP and borrower usage. All yield paid to Maia is in USDT, no protocol tokens. Deepen relations with Yama Finance, gaining exposure to upcoming ecosystems through its omnichain properties - indirect exposure to L2s like Fuel, Arbitrum, and Eclipse.

Proposal Overview:

Under this proposal, Maia DAO will deploy 200k USDT to Yama Finance’s PSM module on Arbitrum. These tokens will be lent out to borrowers who choose to leverage up on their GLP for amplified yield. The yield for said deposited USDT comes from the interest the borrowers pay, estimated between 10-50% annualized. Counterparties (including individual Maia DAO members) will be able to borrow against their GLP up to 17x, for up to 1,000%+ yield.

What does this mean for Maia DAO?

Maia DAO would earn a stable weekly yield, paid in USDT, and would be free to withdraw capital at any time including during the 6 months period and beyond.

Background:

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, our 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.

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

You can learn more here - http://docs.yama.finance/

Public Links: https://yama.finance/ https://medium.com/@yamafinance https://twitter.com/YamaFinance https://docs.yama.finance/ https://discord.gg/yamafinance

Risks:

For a lender (Maia) the risks are minimal. Mainly, they’re restricted to smart contract risk and risk of bad debt. Yama Finance has been audited by Hacken. A 5% movement in price of underlying collateral by the time a liquidation occurs (~30 seconds) is what would cause bad debt. GLP is comprised of ~50% stablecoins, so it has not ever dropped 5% or more in a day, much less 30 seconds.

Borrowers, on the other hand, are subject to volatility in GLP yield rates.

Lenders are able to withdraw their deposits as Yama at any time. After doing so, the Yama can be converted back into USDT using the PSM with no fees or slippage.

Details:

Maia DAO bridges the 200k USDT to Arbitrum and deposits it into Yama Finance’s PSM vault. ‘Retail investors’ and ‘smart money’ will be attracted to take the borrow against the lender due to the incredibly high amplified yield rates. Maia DAO’s USDT will be unlocked, free to be withdrawn at any time but not for any reasons beyond critical during the first 6 months. Borrowers are able to use said USDT to leverage up their GLP to earn multiplied yield. The yield on the GLP generated is partially given to lenders, much like a traditional lending protocol.

Estimated Returns:

Maia DAO ROI: 10% to 50% in USDT annualized. Counterparty ROI: -10% to 75% in GLP annualized (varies significantly) Fees: 10% of borrower interest goes to the protocol instead of the lenders. No fee assessed to principal on deposit or withdrawal.

Vote

Vote to deploy 200k USDT into Yama Finance's PSM module on Arbitrum for 6 months, earning 10-50% in real yield.