Introducing Nya Cash
Nya Cash is the first algorithmic stablecoin with a native AMM support (provided by Nyanswop). One can look for synergy and tight collaborations between the AMM and algorithm stablecoin. For more specifics regarding the Nyanswop collaborations (or if you’re a Nyanswop liquidity provider), look for the section at the end of this article 🐱
As a fork of Basis Cash, Nya Cash shares a similar three-token structure: nyacash (NYAC, the algorithmic stablecoin), nyashare (NYAS, an ownership token which receives inflationary rewards), and nyabond (NYAB, which can be purchased at a discounted rate during network contraction)
How does Nya Cash mechanism work?
NYAS and NYAB mentioned above are designed to move NYAC towards the value of $1. How they work will be elaborated in the following scenarios: NYAC above $1 and below $1.
When NYAC is above $1
When NYAC is traded above $1, called the Expansionary Phase, users will be able to redeem NYABs for NYAC at 1:1, causing an increase in the demand of NYAC. Therefore, new NYAC tokens are minted and distributed to NYAS holders.
For instance, assuming NYAC is traded at TWAP of >$1.01 during the set seigniorage time (every 6 hours), the Nya Cash protocol mints new NYAC. This seigniorage is given to the Boardroom, where users can stake NYAS and earn daily seigniorage based on the price of NYAC.
When NYAC is below $1
When NYAC is below $1, called the Contractionary Phase, users will be able to purchase NYAB at a discount in order to stabilize the price of NYAC, with the expectation of redeeming each NYAB for NYAC in the future when NYAC exceeds $1.
For example, assuming NYAC is traded at $0.9, users can purchase NYAB with NYAC and the NYAC is burned resulting in a decrease in the circulation, which prevents creating unnecessary increases in supply. Also, NYAB does not have interest payouts or expiration dates to prevent bondholders from cutting their losses on redemptions. Once the oracle price of NYAC is above $1.01, users will be allowed to redeem NYAB for NYAC at the rate of 1:1.
Nya Bond Buyback Fund
Every 5% of the seigniorage fund is kept in a Bond Fund. These funds will be used to buy NYAB when the NYAC falls below $1. Another backup 3% of the seigniorage fund (which would be distributed to Nyanswop liquidity providers) would be used as well if NYAC still falls below $1. In total, 8% of the seigniorage fund is ready to buy back NYABs.
Token Distribution (starts on Feb 07 UTC+0)
nyacash Token Distribution
Initial Supply: 180,000 NYAC
Available Pools: NYA-BNB NYAN-LP (2x), USDT (4x), BUSD (1x), DAI (1x), USDC (1x)
Duration: 10 Days
nyashare Token Distribution
Total Supply: 1,000,000 NYAS
Available Pools: NYAC-USDT NYAN-LP, NYAS-USDT NYAN-LP
Duration: 365 Days
The NYAC-USDT NYAN-LP pool will distribute 600,000 NYAS which a higher initial reward rate, decreasing 25% every 30 days.
The NYAS-USDT NYAN-LP pool will distribute 300,000 NYAS at a consistent rate.
100,000 NYAS would be allocated to the team which will vest 3-monthly over 12 months.
How to Earn Distribution Rewards?
To participate in nyacash, visit https://nya.cash and select your preferred pool as follows:
For paired tokens, NYAN-LP, visit https://nyanswop.org/#/pool to get the relevant pools. Or you can look for the helpful 🐱 at the bottom of such pages and click the link to go directly into the liquidity pool
The Boardroom opens 10 days after the distribution ends: Feb 17 UTC+0. The first seigniorage will happen within 24 hours there after.
What risks need to be considered?
Now that you know how Nya Cash works, before you start, you should understand the risks:
When is Expansionary Phase or Contractionary Phase
Make sure you understand both phases before trading the tokens. NYAB can only be redeemed during the expansion phase, that is, when the NYAC is higher than $1.01.
Each staking action costs BNB transaction fee so you should assess the total amount of fees before entering into a position.
Nya Cash Stabilization Mechanism
The Nya Cash protocol is designed to guarantee nyacash tokens to be exchanged at a value of a single US dollar, with the stabilizer (in-protocol stability mechanism) in charge of matching the supply of nyacash to their demand.
Every 24 hours, the time-weighted average of the NYAC-USDT exchange rate is read from the Nyanswop contract, which is then fed into the Nya Cash protocol to be referenced by its stability mechanism.
The stabilization mechanism is triggered whenever the price of nyacash is observed to be above / below (1+ε) USDT, where ε is a parameter that defines the range of price stability for the NYAC token. On launch, ε is set to be 0.05.
At any point in time, nyabond can be bought from the protocol in exchange for nyacash. Purchase of Bonds are performed at an algorithmically set price. With a nyacash oracle price of P USDT, bonds are sold off at a price of P NYAC (effective price being P² USDT), promising bond holders a premium when redeemed. Purchased bonds can be converted to nyacash, as long as the preconditions are met and the Treasury is not empty.
Bonds can still be purchased even when nyacash trades above 1 USDT (P > 1), however this nets the purchaser a loss when redeemed. For example, when 1 NYAC = 1.1 USDT, a Bond is sold for 1.1 NYAC. Since all Bonds can only be redeemed for 1 Cash, this yields the purchaser a net loss. Thus, bond purchases are only expected to occur when 1 NYAC trades below 1 USDT. Although bond purchases at a NYAC price above 1 USD is allowed in the contract, it is disabled in the Nya Cash frontend to avoid user confusion.
If the price of nyacash is observed to be higher than (1+ε) USDT, the system mints totalSupply *(oraclePrice-1) number of new nyacash tokens. The issued nyacash is either deposited to the Treasury or the Boardroom, depending on the nyacash balance of the Treasury.
If the Treasury has a balance above 1,000 nyacash, then it is logical to assume that either all bonds have been already redeemed, or no bond holder is currently willing to perform a redemption. Either way, this signals that the demand for bond redemption do not exist at this time, and thus the freshly minted nyacash is given to the Boardroom contract.
However, if the Treasury has a balance of below 1,000 nyacash, then it is assumed that there will be additional demand for bond-to-cash redemption. Therefore, the issued nyacash is routed to the Treasury so that Bond holders can exercise redemptions.
What’s in it for Nyanswop Liquidity Providers?
3% of all seigniorage funds would be swapped to NYA tokens and deposited into a vault in Nyanswop on a timely basis. That would increase the buying pressure of the NYA token. However, if the NYAC price falls below $1, these funds would be used to buy NYAB so as to support the protocol. In addition, 2% of the seigniorage funds are reserved for our dev fund, those would be swapped to NYA tokens as well.
Oh, did we mentioned ‘vault’? Yes, Nyanswop would be having a vault that runs forever. The vault would get the usual NYA distribution from the Nya Treasury as well. The development of the vault is currently in progress~
In the future, Nyanswop liquidity providers would be sharing all revenues churned out by Nyanswop, ain’t it great nya? 🐱
The Nya Cash protocol is still in experimental phase, it might not work as intended so do consider the risks involved and DYOR.
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