Author: Dewhales Research Translation: Shan Oppa, Golden Finance

1. Overview

Aegis is a young but ambitious project that issued a synthetic stablecoin that generates profits—$YUSD. Founded in 2024, Aegis offers a delta neutral stablecoin powered by Bitcoin that provides users with real-time transparency, built-in revenue generation, and completely independent of the fiat banking system. In essence, $YUSD is exactly the stablecoin envisioned by Arthur Hayes in the article Dust on Crust, that is, it is not pegged to the fiat banking system.

The main features of $YUSD include:

By using a coin margin perpetual contract, it is completely independent of existing stablecoins.

Aegis holds Bitcoin as collateral and stabilizes $YUSD by selling Bitcoin margin perpetual contracts that are equal to their exposure.

New $YUSD can only be created when the collateral of $USDT, $USDC, or $DAI is deposited into Aegis' Mint smart contract.

Aegis is committed to fully complying with the laws of all jurisdictions and ensuring that its operations comply with the highest regulatory standards.

Because there is no need for pledge, the reward can be distributed directly and effortlessly.

Real-time transparency is achieved through the dashboard display of off-chain reserves, exchange positions, and API access for direct monitoring.

Managed by DAO (coming soon)

2. Structure, components and features

Whether new or experienced investors, there is a core question when using stablecoins: Can the stablecoin remain anchored to $1?

To solve this problem, Aegis designed a three-layer stability mechanism as described below:

1. Bitcoin support + hedging strategy: $YUSD is backed by Bitcoin, and its value is directly pegged to the Bitcoin held. Aegis hedges by selling equal bitcoin perpetual contracts to offset the impact of Bitcoin price fluctuations, keeping $YUSD at $1.

2. Arbitrage mechanism: When the market price of $YUSD deviates from $1, authorized users can conduct arbitrage transactions. When $YUSD price is higher than $1, users can provide collateral to mint more $YUSD, increasing supply, and thus lowering the price. When $YUSD price is higher than $1, users can provide collateral to mint more $YUSD, increasing supply, and thus lowering the price. Prices below $1, users can redeem $YUSD for collateral, reducing supply, and thus push up prices.

3. Insurance Fund: Aegis has established an insurance fund to deal with extreme market events (such as the 50% drop in Bitcoin price in March 2020). The fund provides additional stability for $YUSD through accumulating reserves with positive returns. Currently Aegis distributes 1-5% of its income to the insurance fund, depending on the APY (annualized yield). Fully transparent, all fund details can be viewed on the Aegis public dashboard.

Let's now take a step-by-step look at how users start to make money by holding $YUSD only:

1. Get $YUSD

Users can get $YUSD through a DEX exchange (no KYC required) or directly using the Mint feature (KYC required). To start earning rewards, users simply register their wallet in the Aegis system.

Aegis uses a minted security layer to ensure that only $USDT, $USDC, or $DAI is deposited as collateral to Aegis Only after the Mint smart contract can a new $YUSD be created. Once the collateral asset is received, it will be converted to Bitcoin (BTC) through a trusted OTC channel. The entire process is efficient with a maximum delay of 15 minutes to minimize the impact of market volatility.ring.

The entire casting process (including collateral verification and BTC acquisition) is transparent and visible and can be monitored in real time through the Aegis public dashboard.

2. Transfer to the custodial vault

All stablecoins will be transferred to the custodial vault before entering the exchange. This is mainly because although centralized exchanges are convenient, they have the following risks:

• Exchange bankruptcy risk: If the exchange goes bankrupt, user funds may face losses.

•Security vulnerability: Exchanges are often targeted by hackers (think Bybit events).

•Customization risk: As the custodian, the exchange means that the user cannot directly control his assets.

3. OTC settlement

After depositing it into the vault, the stablecoin enters the exchange through OTC settlement. When a transaction is required, the assets are temporarily allocated and executed through the Aegis settlement layer. Once the transaction is completed, the asset is returned to the custodial storage.

4. Delta neutral position

Aegis maintains a Delta neutral position by purchasing Bitcoin and opening a coin-basis perpetual contract to hedge price fluctuations.

5. Revenue generation

Aegis has developed arbitrage software that can conduct fund rate arbitrage in the spot market and perpetual contract markets, generating returns through funding fees (Funding Fees). Aegis collects these fees as rewards and allocates them to $YUSD holders. When profits are deposited, a new $YUSD is created.

Example:

Suppose the Funding Rate (FR) is 0.01%, and it is settled every 8 hours (3 times a day):

1. Decimal conversion: FR is converted to decimal, i.e. 0.01% = 0.0001.

2. Annual compound interest calculation: 3 times a day, a total of 1,095 times a year (3 × 365).

3. APY calculation:

APY = \left(1 + 0.0001\right)^{1095} - 1

Finally, $YUSD annualized rate of return ≈ 11.57%.

6. Receive reward

No need to stake, lock-up or waiting period, the user's $YUSD reward can be collected every 7 days through the following 3 steps:

a. Balance snapshot & Income Calculation

Aegis Snapshots the user's $YUSD balance every 8 hours to calculate the average daily position.

b. Daily income calculation & $YUSD Generation

Aegis transfers exchange profits to the insurance fund every day and generates a new $YUSD to be displayed in the user's account balance. Users can redeemed, send or receive $YUSD at any time.

c. Receives weekly

Users can collect accumulated $YUSD directly from the Aegis account every week.

3. Team introduction

The Aegis team has comprehensive capabilities in the fields of technology and business, and its core members include:

1. Tony (Project Leader)

Tony is an expert in AI, cryptocurrency growth strategy and digital marketing. He has served as a resident at Google for StartupsEntrepreneur in Residence has created an AI-driven platform focusing on scalable system architecture, AI algorithm optimization and profitability integration. He has over 4 years of experience in cryptocurrency exchange growth and specializes in SEO, strategic collaboration and data-driven marketing. In addition, he has extensive experience in affiliate marketing, successfully managed advertising campaigns and optimized e-commerce sales funnels.

2. Ermin Sharich (State Leader)

Investment and strategy experts in blockchain, startups and financial markets. He worked as an investor at Pretiosum Ventures, and invested in early-stage technology companies with venture capital institutions such as Y Combinator and Sequoia. He also worked as an Institutional Strategy Manager at Gate.io and co-founded Cointelegraph Research, leading blockchain research and business development.

3. Dmitrii Sergeev (CTO, Chief Technology Officer)

Senior IT Engineer specializing in back-end development, Web3, DevOps and blockchain solutions. He has participated in major projects such as Elrond (EGLD), BRD, CoinPayments, and is responsible for IEO issuance, payment gateway and cryptocurrency storage. He is also the co-founder of DevLab Co. Ltd., and has been driving blockchain innovation since 2017, specializing in Golang, Rust, C++, Erlang and Solidity, known for his outstanding problem-solving skills and attention to detail.

4. Michael Egorov (Chief Product Officer CPO)

Senior IT Manager, Blockchain Developer and DeFi enthusiast with a background in fintech and product management. He served as CTO at DeCommas.io, responsible for the development of cross-chain DeFi and on-chain transaction solutions, and has a bachelor's degree in distributed computing and networking.

5. Alexander Maslennikov (Risk Control Person in charge)

Experienced software engineer with specialization in distributed systems, algorithms and back-end development. He worked as a senior software engineer at XLAB for 4 years and participated in the research and development of complex software solutions. He has also been in charge of software engineering research and development at TmexLab LTD and Volga Capital Ltd, with nearly 20 years of career and has worked as a senior software development and solution architect at Alcatel-Lucent.

In addition, Aegis has been supported by consultants from companies such as Google, Paradigm, UBS, Citi Bank, Paradex and Orderly Network.

4. Token Economics

Aegis adopts a dual token model:

•$YUSD (formerly $USDa): income-based stablecoin

•$AEG: governance tokens, used for protocol governance.

$AEG holders can propose and vote to decide on the future development of the agreement, including:

Agreement upgrades

Approval of collateral assets

Fee allocation adjustments

Treasury fund allocation

Liquidity pool configuration

Insurance fund strategy

left;">DAO Governance Improvement

Partnership

Token allocation adjustment

5. Partners & Investors

Aegis' important partners are mainly institutions that provide off-site hosting solutions, including:

•Fireblocks

•Copper

•CEFFU (formerly Binance Custody)

These custodians provide multi-party computing (MPC) technology, focusing on cryptocurrency custody and institutional asset management. In addition, DeFi money markets and liquidity platforms are critical to the accessibility and adoption of $YUSD. At present, Aegis has integrated Uniswap and is expected to have more cooperation in the future.

Investors

In February 2025, Aegis successfully completed a US$2 million Pre-Seed round of financing, including:

•Dewhales Capital

•Profluent Ventures

•Well-known angel investors (has invested in Uniswap, Stellar, MakerDAO, Paradigm, Deribit, BCB, GVol, Hidden Road, xAI and Apptronik)

6. Development Progress & Roadmap

Aegis is still young, but full of ambitions and grows rapidly. Recent key events include:

March 5, 2025: Injecting $500,000 into the Aegis Insurance Fund.

February 25, 2025: Completed a $2 million Pre-Seed financing.

January 10, 2025: Passed by Hacken Smart Contract Audit.

December 2, 2024: Stablecoin $USDa has been renamed $YUSD.

Aegis intends to expand its team and integrate more DThe eFi protocol expands insurance funds and further realizes the mission of providing reliable, transparent stablecoin solutions. Additionally, Aegis DAO is expected to be launched in the near future.

Aegis' governance framework is designed to be transparent and inclusive:

Each $AEG token represents one vote, ensuring that every stakeholder has a say.

To be adopted, the proposal must reach a quorum of 4% of the total $AEG supply and obtain at least 51% approval to ensure that significant changes reflect the wishes of the community.

This agreement imposes a period of delay before the approved proposal takes effect so that the community can have time to review and resolve any issues.

These measures jointly emphasize Aegis' focus on stability, decentralization and shared governance, laying the foundation for a resilient and forward-looking stablecoin ecosystem.

7. Potential competitors

Overall, all existing or upcoming stablecoins can be considered competitors to $YUSD. In particular, the "Delta-neutral" stablecoins such as Ethena's $USDe and Elixir's $deUSD, which generate returns pose a challenge to Aegis' stablecoins.

$YUSD Two major advantages over competitors:

1. You can get profits without pledge or locking positions.

2. Completely independent of other stablecoins, relying on BTC perpetual contract (currency standard) positions as support.

The following table compares the similarities and differences between $YUSD and other stablecoins in different characteristics:

•Direct income: Users only need to hold $YUSD to continuously obtain profits, without pledging, locking positions or waiting, and the income can be collected at any time.

•On-chain auditability: Measure whether stablecoins' transactions and collateral assets can be easily and thoroughly audited on the blockchainThis is an important indicator of transparency and security.

•Stable mechanism: Describes that stablecoins are pegged to $1, which usually involve a combination of collateral, algorithms or multiple factors.

•Programmability: measures the compatibility of stablecoins with smart contracts and can be integrated into various applications and platforms to support automated and complex financial transactions.

8. Community

At present, there are about 2,000 Telegram users in the Aegis community and 4,000 X (formerly Twitter) users. Although the project's social accounts are still relatively new, it has grown rapidly in recent weeks. For example, in just one and a half months, Aegis’ community size on X grew 80 times.

According to the team, Aegis’ Discord channel is expected to be launched by the end of March.

9. Conclusion

The stablecoin market is growing and evolving rapidly, whether in terms of quantity (market value, total locked position, number of users, etc.) or quality (application scenarios, collateral models, anchoring mechanisms, etc.). In addition, regulatory progress, low financial stability demand for its stored value, and the expansion of the DeFi ecosystem are all further driving this growth.

At the same time, more and more income-type Delta neutral stablecoins are emerging, which not only brings new opportunities but also intensifies competition. Ultimately, which agreement can find the best balance between benefits and risks will determine who can become the market winner. Aegis is expected to compete for a leading position in this field through reasonable design and balance of benefits and risks. The following is an analysis of the pros and cons of the Aegis project:

Pros:

✔ Security and risk management take precedence over profitability, which is more robust and shows that the team has long-term thinking. Although $YUSD entered the market later than its competitors, there is still a great chance to be the ultimate winner.

✔ The technical and management team is strong and has execution ability.

✔ Team members are relatively active on LinkedIn, its background is open and transparent, making it easy to review.

✔ Expansion of the BTC currency standard market helps the scalability of $YUSD, ensuring it can grow with market demand.

Disadvantages:

✘ Aegis and its stablecoins still lack practical market tests and need to go through the test of bear markets, scalability challenges and security attacks.

✘ Aegis needs to increase social media activity, increase posting frequency, interact with the community, and increase market popularity.

✘ The funding rate is volatile, and it may be difficult to maintain an attractive APY (annualized rate of return).