Feb 8, 2022
Saber x UXD x Socean Streams
TLDR
💡 Saber, Socean and UXD are working together!
💡 Using Socean Streams, UXD will sell $500,000 worth of bonded UXP tokens unlocking over 30 days (b30UXP) to buy SBR. UXD will max-lock that SBR to incentivise liquidity in its UXD-USDC pool, providing deep liquidity for its stablecoin.
Introduction
UXD, an algorithmic stablecoin, is selling its UXP governance token to buy SBR, Saber’s governance token. UXD will use Socean Streams to sell the UXP token as a bonded UXP stream (bUXP).
This bonded UXP will linearly unlock to become UXP over a period of 30 days.
Why is UXD buying SBR?
UXD Protocol is an algorithmic stablecoin that is 100% backed by a delta-neutral position using perpetual futures. Stablecoins need deep liquidity so that traders can swap large amounts with low slippage. UXD Protocol is selling its UXP tokens in exchange for SBR tokens, and will then lock them for the max period of 5 years to vote on UXD pools on Saber.
Saber is the market leader for stablecoin and wrapped asset liquidity pools, and has recently introduced its Saber Gauge system on Tribeca (https://tribeca.so/#/gov/sbr/gauges). 1 million SBR is emitted daily as emission rewards, and SBR holders can vote to determine which Saber LPs these rewards go to.
Gauges are a way to vote on capital allocation over capital pools. The more Saber (SBR) tokens are locked for veSBR (voting escrow Saber), the more weight your vote has. The more weight your vote has, the more Saber rewards are allocated to the pool of your choice.
UXD is buying SBR to initially vote for Saber emissions on the UXD-USDC LP. This will incentivise deposits on the UXD-USDC LP, thus securing deep liquidity for the UXD stablecoin.
Why is UXD using Socean Streams?
Socean Streams allows UXD to control its token supply inflation and filter out mercenary traders. By distributing bonded tokens instead of tokens, UXD slows down UXP token inflation, which is healthier for the UXP token.
The streams mechanism filters out short-term traders. There are two types of buyers: long-term holders who believe in the protocol (HODLer Harry), and people who are only interested in short term price action (NGMI Nathan). If UXD sold UXP to buy SBR on the open market, both long-term holders and short-term traders would buy the UXP.
Everything changes once we add the time component. We model long-term holders as having a lower discount rate (they are more patient) than short-term traders. They will be willing to pay a higher price for the bUXP tokens compared to short-term traders, and will thus outbid them.
The graph below shows the price that a more patient holder would pay vs. an impatient trader as the bonding duration increases. If the price is anywhere above NGMI Nathan and below HODLer Harry, NGMI Nathan will not purchase the bUXP tokens. Soceans Streams thus allows UXD to ensure that only high-conviction supporters purchase its token in this offering.
For more details, see the Socean Streams whitepaper.
Why should I buy bUXP?
Buying bUXP gives you a powerful way to support the UXD protocol. This is a unique opportunity to help UXD on its journey to create a decentralized stablecoin for the crypto economy. If you believe in the future of UXD (and we very much do!), you can support the protocol, and in return get a better price for doing so. By buying bUXP, you will also help UXD secure UXD-X liquidity, which is critical for the success of the UXD stablecoin.
Here’s what all three founders have to say about the collaboration:
Dylan Macalinao, Co-Founder of Saber Labs:
UXD has created an extremely important DeFi primitive with its Solana-native decentralized stablecoin. This initiative with Socean Streams signals their long-term conviction in Saber being the go-to venue for stablecoin liquidity exchange on Solana.
Kento Inami, Founder of UXD:
I am extremely excited to sell bonded UXP tokens on Socean to participate in the #Saberwars! Socean Streams enable us to attract long term believers in our project and will make it easier to secure deep liquidity on Saber.
FP, Co-Founder of Socean:
I’m super excited for this partnership! This is a win-win-win for all of us. Saber now has a long-term investor in SBR, UXD has secured deep liquidity for its stablecoin, and Socean has a new Streams partner. Bullish 📈
How do I buy bUXP?
bUXP will be available for purchase on Socean Streams soon. You can go to https://socean.fi/app/streams to purchase bonded UXP tokens.
Disclaimer
Socean Streams is offered to Eligible Persons. Eligible Persons are defined as persons, aged 18 years or older, or entities who are not residents of, citizens of, are incorporated in, or have a registered office in any Restricted Territory, as defined below (any such person or entity, a “Restricted Person”). Restricted territory includes the UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES), ANTIGUA AND BARBUDA, ALGERIA, BANGLADESH, BOLIVIA, BELARUS, MYANMAR (BURMA), COTE D’IVOIRE (IVORY COAST), REPUBLIC OF CRIMEA, CUBA, DEMOCRATIC REPUBLIC OF THE CONGO, ECUADOR, IRAN, IRAQ, LIBERIA, LIBYA, MALI, MOROCCO, NEPAL, NORTH KOREA, SOMALIA, SUDAN, SYRIA, VENEZUELA, UNITED KINGDOM, YEMEN, ZIMBABWE, ANY JURISDICTIONS IN WHICH THE SALE OF CRYPTOCURRENCIES ARE PROHIBITED, RESTRICTED OR UNAUTHORIZED IN ANY FORM OR MANNER WHETHER IN FULL OR IN PART UNDER THE LAWS, REGULATORY REQUIREMENTS OR RULES IN SUCH JURISDICTION, OR ANY STATE, COUNTRY, OR REGION THAT IS SUBJECT TO SANCTIONS ENFORCED BY THE UNITED STATES, THE UNITED KINGDOM, OR THE EUROPEAN UNION.
Restricted Persons are strictly prohibited from directly or indirectly holding, owning, or using the Tokens in any way or otherwise transacting on or using Socean Streams. For more details, please see UXD’s Terms and Conditions.
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