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Frequently Asked Questions
Welcome to the Bluejay Finance FAQs page! The following page is designed to answer the most common questions about Bluejay Finance, but if you need more information or have further questions, we encourage you to join our community on Discord. Our team and community members will be happy to help you out.
Similar to how there are no supply cap to company’s share, there is no limit to the supply of BLU. This allows the protocol to perform recapitalisation when necessary to raise funds for future expansions or perform buyback when growth targets are met.
The team is focused on delivering the best suite of products to provide access to financial services, the same way that companies in the real world are focused on value creation for their customers instead of just their share prices.
Bluejay is similar to an early startup and investing in the governance token is highly speculative. While the team has deep appreciation for early supporters for the protocol, we do not want to draw excessive attention to simply trading BLU or inventing schemes that manipulates the prices of BLU in unsustainable manners.
Here are the key reasons why we are deployed on Ethereum:
- Ethereum has the highest amount of liquidity across all L1s and L2s. Liquidity is important in the early stages of the protocol.
- One of the strongest security layers which both users and the protocol can benefit from.
If the market demonstrates demand for Earn, we will be deploying it on the relevant layers.
The staking yields are on the BLU token right now, not on bluSGD. They are at this level because they reflect the growth projection of the protocol, and also help reward earlier users.
bluStables does not have a staking yield. Instead, holders of bluStables may earn yield on the stablecoins by investing them in deals on the Bluejay Earn page.
Bluejay launched a public sale to bootstrap its liquidity in November 2022. Whitelist price was set at $5 while the public sale price was $10.
The core team has separately raised money to fund software development efforts.
Information about funds raised, BLU token, token generation events can be read in the following articles:
The protocol is capital efficient in a sense that it does not always rely on external funding to operate and grow.
The protocol makes revenue from both arbitrage and swap fees. This mechanism allows the protocol to utilize its revenue generated to operate and grow. You can check out this article for more information here.
Stablecoin holders are able to participate in exclusive Bluejay Earn products. Loan pools denominated in bluStables do not incur any fees so all the yield from the borrowers goes directly to the bluStables holders.
We aim to be a sustainable business, which is why we have a focus on real world finance / RWA use cases.
But we also like the protocol-owned liquidity approach of certain protocols because they allow them to be more flexible at deploying capital, rather than relying on liquidity mining incentives.
The failure of OHM and Wonderland came from highly inflationary tokenomics and no meaningful deployment of that capital into revenue-generating businesses, similar to a startup that raises series A in capital and then doesn't spend that money at all in its core business.
Bluejay reworks the model by ensuring that we have a sound business model by providing products that create values for our users and then extracting the value in a sustainable manner.
BLU tokens are available to be traded on Uniswap V2. The pool was deployed by the protocol during the token generation event, during which 50k of liquidity was deployed by the protocol to facilitate trading in the secondary market.
The decision to deploy that level of liquidity is so that the rest of the capital can be used meaningfully by the product instead of facilitating speculative trading which does not create value for the ecosystem in the long term.
You should buy BLU if you:
- Believe in the mission of Bluejay, or
- Believe that the team’s capability in executing our vision, or
- Believe in the business model of Bluejay, or
- Are speculating that the price will go up, for any other reasons
As BLU is a speculative asset, we do not actively encourage users who do not understand what they are getting into to participate in speculative activities.
If you are unable to understand the risk associated with purchase of BLU, we strongly discourage you from doing so.
The likely answer is: “We do not know”.
There are many reasons why there are increased market activities surrounding the BLU price, including but not exclusive to:
- Speculative trade from individuals or groups of individuals,
- Effects of a large buy or sell orders from individuals or earlier BLU token holders,
The team has not, and will not ever be, guaranteeing a directional price movement or redemption price of the BLU token.
The staking reward comes from the growth of our treasury value.
Governance token holders will participate in deciding the level of staking reward to redistribute the revenue.
The reward rate for BLU is determined by the monetary policy set by the DAO. The level is dependent on the proceed from the bond sale, fees collected from the liquidity pool on the various stablecoins as well as the projected runway for sustaining the reward rate.
The initial staking rate will be set to 35% APY until further action initiated by the DAO.
All the bonds you've purchased will appear in the bonds section where you can redeem BLU from.
You may choose to redeem many bonds at the same time by clicking on the redemption buttons on the top left or redeem individual bonds by clicking on the redemption buttons next to each bond.
You may choose to redeem them as BLU or have the protocol stake it for you and receive sBLU instead.
The principle and maturity value of the bond will be updated to reflect the vesting schedule of the remaining BLU.
Once you have redeemed a partially vested bond, you will receive the amount of BLU that has been vested and the principal value will be reduced by that amount.
Similarly, the maturity period will be reduced by the time elapsed since the bond was purchased, or last redeemed, to reflect the remaining time for the bond to fully vest.
Bonding is a process to allow Bluejay to acquire its own liquidity and reserve assets (ie DAI) and bring stablecoins to the peg by selling BLU at a discount.
You may buy BLU bonds if you want to trade assets you have to get BLU tokens at the discounted price after the vesting period.
The maturity period for stabilizing bonds is 6 hours, while the maturity period for treasury bonds is 7 days. BLU tokens will be available for redemption throughout the entire maturity period, but only up to the proportion that has been vested.
The maturity period for both types of bonds are determined by the monetary policy set by the decentralized autonomous organization (DAO).
Will we be launching other bonds in the future? What are the types of bonds you could purchase today?
Bluejay do not have intention to launch other bonds as of today.
There are two main types of bonds on Bluejay, treasury bonds, and stabilizing bonds. The only difference is that treasury bonds raise assets for the treasury directly while stabilizing bonds help to peg issued stablecoins to their prices.
You should purchase the bond if the effective price of BLU is suitable for you. Do take note that the market price of BLU may change during the maturity period of the bonds when purchasing it
You should hold the LP tokens if you believe the fees generated from your stake in the liquidity pool will meet your expected returns.
If you do not understand the risk associated with such activities, you are discouraged from participating.
The pBLU token is distributed to early supporters of the protocol when we were fundraising to build Bluejay. It is vested linearly to the supply of BLU tokens.
Early backers who participated in Bluejay Finance’s token generation in November 2021 on Polygon will find an additional link on the sidebar when logging in with the wallet that has participated.
Redemption of pBLU tokens can be made from that page.
Projects and companies require significant capital to materialize their vision and this happens when they are fundraising. Early investors undertake large amount of risk to support a vision early on and are compensated in either shares or tokens which can easily become worthless if the team fails to execute.
In hindsight, it is often easy to comment that investors are dumping on you and that they have gotten in early to the deal. However, it is not easy to make that decision to deploy capital when the project is less mature.
In similar manners, you will be able to invest in the Bluejay ecosystem and our vision at the current price of BLU tokens, and exit at a premium if we are able to execute on our vision down the road.
You do not need to be a BLU holders in order to enjoy benefits of Bluejay’s ecosystem. As a non-BLU token holder, you will still be able to get access to the entire range of products we offer, including Bluejay Earn.
Each $bluSGD is backed by $DAI and $XSGD in the treasury.
You may refer to the amount of assets held in the treasury against the outstanding bluSGD supply.
As it stands on 16 Mar 2023, the protocol has the following assets against 732k of bluSGD as liabilities:
- 443,195 DAI tokens (305k via LP tokens)
- 180,110 xSGD tokens
- 497,707 bluSGD tokens (411k via LP tokens)
This effectively means that for each bluSGD in circulation, the protocol holds:
- 0.769 xSGD
- 1.89 DAI
At the market price, the collateral ratio of bluSGD token is 3.32x
Was there any impact on bluSGD's performance during the extreme market volatility that happened during USDC crisis?
Despite high volatility in the market, bluSGD retained an excellent correlation with SGD throughout the period.
The treasury is currently comprised of DAI, xSGD, and Liquidity Pool tokens. Note, that we do not count Bluejay Finance issued tokens as part of the treasury for collateral purposes. Core concept of collateralization is available here.
Collaterals included in the treasury are selected based on their security and stability.
To guard against fluctuations in value, even large fluctuations, bluStables are overcollateralized to ensure they remain fully backed.
We also select different assets, such as DAI and xSGD to back bluSGD, to avoid correlations. This means that either assets can vary significantly in value and bluSGD holders can still be protected from their volatility.
As the protocol maintains excess collaterals in uncorrelated assets, the protocol will still be able to operate even if the value of collateral changes in a short period of time.
However, the protocol can run into the risk of being insolvent in the short term when value of assets fall below certain levels. The team remains committed to avoid such events by monitoring the market condition and executing our contingency plans in scenarios of extreme volatility.
There was a negligible impact on the treasury as the team act to provide additional liquidity during the volatile period.
We are starting to build out use cases for our bluStables. Bluejay Earn is the first iteration of that ecosystem. It allows holders of bluSGD to earn yield on their bluSGD by investing in fixed-income products.
The protocol is exploring sustainable means for users of bluStables to benefit from. Such request could be discussed and executed from the DAO.
How does bluSGD differ from SGD? How does it differ from xSGD? Why would I hold bluSGD instead of xSGD?
bluSGD is a digital token that is pegged to the Singapore dollar (SGD) on a 1:1 basis. It is an ERC-20 token that runs on the Ethereum blockchain, which means that it can be used in the same way as any other ERC-20 token.
xSGD is another stablecoin offered by Xfers Pte Ltd that is pegged to the Singapore Dollar and has facilities for fiat redemption.
While both tokens attempt to track SGD, there are differences such as:
- xSGD can be redeemed and minted directly via on/off ramps provided by the issuer while bluSGD does not have similar facilities
- bluSGD is a decentralized stablecoin that can be more resilient to the regulatory changes (ie banking crisis)
What kind of use cases are currently available today with bluSGD? What are the integrations available?
bluSGD users gets exclusive and fee-less access to investment opportunities offered in the Bluejay Earn marketplace.
In addition, holders can diversify exposure from existing USD assets held on chain or use it to transfer larger amount of value around.
Each $bluSGD is backed by the treasury that is currently comprised of DAI, xSGD, and Liquidity Pool tokens.
We do not reinvest assets to other protocol so that our stablecoins are backed by low-risk assets and that we can maintain the highest level of liquidity for our users.
There are two ways to swap to bluSGD: through Uniswap or the PSM module. The most effective route depends on the prevailing market conditions as well as the type of assets you have. As a rule of thumb, we suggest:
If you have access to Singapore bank accounts, we recommend you to on-ramp with xSGD and swap the asset using our xSGD ←→ bluSGD swap.
If you already have xSGD, we recommend you swap the asset using our xSGD ←→ bluSGD swap.
If you already have digital assets like ETH, USDC, USDT or DAI, we recommend you swap the assets using Uniswap. For much larger trade, you may consider using limit order exchange like CowSwap or 1Inch.
What is the reason for having non-USD stablecoins like bluSGD when there are already so many USD-pegged stablecoins in the market?
Real world business transacts in many currencies other than USD. Having digital representation of the different currencies allow businesses and individuals to trade in currencies they are familiar in.
One example is that a business in Philippines who is sending invoice and receiving payment in PHP will not want to send payments in USD or borrow funds in USD due to extra foreign exchange exposure. The existence of digital PHP will allow such business to have simpler business operations and can create opportunities for foreign exchange (FX) and FX derivative markets on-chain.