How YouCoins Work

A YouCoin is uniquely identifiable by its network (e.g. X, Instagram, YouTube, GitHub, OnlyFans, etc.) and its user id (e.g. username, or an actual id where applicable). When you enter a link into the search box, these pieces of information are automatically extracted and used to route you directly to the corresponding coin's trade page.

YouCoins are initialized and trade-able from the instant they are searched. All it takes is for someone to enter the link to a social entity into the search bar in order for a coin to exist and for someone to be able to trade it.

Each YouCoin has a fixed maximum supply of 1 billion that is sold in such a way that the price goes up as more people buy, and the price goes down as more people sell. Before a coin is open for normal trading, however, it starts in a “sniping phase” where users can submit bids for a coin before it actually opens. We describe this sniping phase first, then move on to explaining the nature of trading thereafter.

The first sixty seconds after a YouCoin is searched is what we call the “sniping phase.” In the sniping phase, you can submit a bid, aka “snipe,” for a coin that simply specifies how much in USDC you would like to buy of that coin. Just one simple number, that's all. Then, once it's time to “open” a coin, all of the snipes are aggregated together and executed according to the coin's “bonding curve” formula (more on that in a moment) and everyone receives fully-unlocked tokens that they can sell in normal trading. Everyone who submits a bid in the sniping phase receives the exact same average price at the open. We can call this $P_{\text{open}}$ (more on how it's computed in a moment).

Why include a sniping phase? Why not just launch tokens immediately according to the bonding curve? If we were to open coins immediately, without a sniping phase, this would result in a click-race where a single entity would wind up controlling the lion's share of a coin's supply by pure chance (or due to a latency advantage). By having a sixty-second sniping phase, we not only level the playing field between bots and ordinary humans, but we also ensure that the initial supply of “hot” tokens is generally split among many initial participants. Sixty seconds is more than enough time for a human to evaluate a coin and execute a trade (albeit you have to be quick!). But even if only bots are participating, it still ensures a split on the basis of capital (auction) rather than a winner-take-all on the basis of latency (click-race).

The end result is orders of magnitude less extraction, and thus vastly improved longevity for coins. This is especially important for YouCoin, where coins with higher social status are inherently more valuable, and thus likely to be hotly-contested.

Note: The sniping phase mechanic is virtually identical to the Pre-Launch Phase of the $YOU token sale, with the exception that everyone receives unlocked coins and the initial $x$ value is 5,000 instead of 100,000 (meaning the curve is steeper for YouCoins than for $YOU). This means everyone who participates in buying $YOU is already fully-equipped to snipe YouCoins. We discuss $P_{\text{open}}$ in the next section but note that a full derivation of the $P_{\text{open}}$ formula is also included in the appendix of the Tokenomics section for those interested. The same math is used to power YouCoins but with an initial $x$ value of 5,000 instead of 100,000 (again, steeper curve for YouCoins than for $YOU).

Roughly, $P_{\text{open}}$ doubles every time the amount of USDC bid doubles. For example, if the sniping phase aggregated $20,000 in USDC bids then $P_{\text{open}}$ would be roughly 2x what it would be if it had only aggregated $10,000.

Below is a table showing $P_{\text{open}}$ given varying amounts of USDC demand. Note the price roughly doubles every time the demand doubles.

The $P_{\text{open}}$ price determined from the sniping phase is then used as the floor price for normal trading, as we'll discuss in the Trading Spot YouCoins section.

Tokens purchased in the sniping phase are fully unlocked, and there is no advantage to buying coins in the sniping phase vs ordinary trading except for the fact that your snipes hit the bonding curve earlier.

When the YouCoin platform as a whole launches, we will be in a unique situation where we are going from zero coins listed to the entire internet being immediately trade-able. If we were to naively allow all coins to be traded within sixty seconds of being searched, we would be faced with a manic frenzy of bot activity as people raced to snipe tens of thousands of the more “obviously valuable” coins. Such a rush would not only give humans zero chance of competing, it could also result in liquidity being too fragmented on day one to create the critical mass the platform needs to be sustainable (and fun!).

To put humans on a level playing field with bots, and to concentrate liquidity in the early days, all YouCoins searched in the first 24 hours of launch will be “sniping-only.” This means that the sniping phase will last indefinitely rather than sixty seconds.

Then, after 24 hours have passed, and people have put in their thoughtful bids for the most valuable coins, the top coins by total snipe amount will begin to be opened for actual trading one by one. This will be done by a random snipe-weighted sample of the top 1,000 coins happening at regular intervals.

We have not yet decided exactly how fast we will begin to open coins, and we'd like the community's input on what would be the best way to open all coins. But below we provide a tentative schedule:

• First 24 hours: No coins open, sniping-only.
  • Coins can be searched and snipes can be placed, but no coins are open for actual trading yet.
• Next 7 days: One coin opens every 24h.
  • We conduct a snipe-weighted sample of the top 1,000 coins and open one coin every 24h.
  • This will result in liquidity concentrating on opening coins.
• Next 7 days: One coin opens every hour (snipe-weighted sampling).
• Next 7 days: One coin opens every 30m (snipe-weighted sampling).
• Next 7 days: One coin opens every 5m (snipe-weighted sampling).
• After: All coins are open for trading. Newly-searched coins open sixty seconds after the first time they are searched.

After this initial “drip” period, we enter the steady-state where all coins are open and new coins open within sixty seconds of being searched. This mechanic should ensure that the trading world has enough time and resources to properly digest the initial “IPO of the internet.”

After YouCoins complete their initial sniping phase they are open for ordinary trading.

Each YouCoin has a fixed maximum supply of 1 billion that is sold in such a way that the price goes up as more people buy, and the price goes down as more people sell. More precisely, the price quadruples every time the USDC demand for a coin doubles, i.e. the price is quadratic in the USDC demand. The exact formula for the price as a function of how much USDC has been used to buy is below.

Below we show some example prices and market caps, showing the price-quadrupling property we mentioned:

For those interested in the nitty-gritty details, we note that the formula for a YouCoin's spot price corresponds to a standard $x\cdot y=k$ bonding curve with initial $x=5,000$ and initial $y=1\text{ billion}$. The curve is identical to that of the $YOU bonding curve mentioned in the Tokenomics section, except that it uses 5,000 for its initial $x$ value (which makes it go up and down faster for the same amount of usdc_demand). If you are not familiar with $x\cdot y=k$ bonding curves, all you really need to know is that the price quadruples every time the amount of money in the curve doubles (i.e. the price is quadratic in usdc_demand, as the formula shows). You can see this from the table of prices shown above.

Notably, YouCoin is a fully-fledged order-book exchange, but it supports the ability to layer a continuous curve on top of the order-book, giving the best of both a central limit order-book like Hyperliquid and a liquidity-pool-based approach like Uniswap. When you place an order, you will either hit the curve liquidity or the nearest resting order, whichever offers the better price. Achieving this hybrid model efficiently, without compromising on our goal of 300k+ tps, is an important achievement for the platform and, as far as we know, a first for the industry.

When you refer another user you get 14% of their trading fees and they get 10% off of their trading fees. It’s a win-win. But that’s not all.

You also get 4% of the trading fees from second-degree referrals (people who were referred by someone you referred) and 2% of fees from third-degree referrals (people who were referred by someone who was referred by someone who you referred... phew!). For example, if A refers B, B refers C, and C refers D, then A gets 14% of B’s fees, 4% of C’s fees, and 2% of D’s fees.

Referral fees can also be paid on snipes, and on the pre-sale launch itself. Up to 2.5% of every snipe is paid out as a referral fee, following the second and third-degree referral graph (1.75% to first-degree referrer, 0.5% to second-degree, and 0.25% to third-degree). The more money that goes into the snipe phase of a coin, the closer the total referral percentage gets to the maximum value of 2.5%. For snipes, referral earnings are paid out after the coin opens.

Unlike most exchange affiliate programs, all of your earnings are paid in USDC so you don’t have to manage fees in lots of different currencies. You just get a steady stream of USDC cashflow as the people you refer (and the people they refer) start trading.

The 10% discount for a referee is active until they’ve personally executed $25M in weighted volume (corresponds to roughly $2,500 in exchange fees paid). Referrers keep earning their kickback for much longer, until the referee hits 1B in weighted volume (corresponds to roughly $100k in exchange fees paid, 40x longer than the discount lasts). Both caps are per-referee, not lifetime totals across your network, so every newly referred user starts with a new clock.

If you want to build a third-party frontend or integrate YouCoin into an existing wallet, we’ve not only made it extremely easy but we’ve ensured you are compensated for it.

Every order request includes an option to set a builder_fee field with your account_id and the fee_rate you want to add on top of the exchange’s standard fees. It looks like this for a spot order request:

pub struct OrderRequest {
    pub side: Side,
    pub price: Option<Price>,
    pub base_size: Option<Size>,
    pub quote_size: Option<StandardAtoms>,
    pub time_in_force: TimeInForce,
    pub client_order_id: Option<ClientOrderId>,
    /// Optional builder fee: an additional charge on the taker routed to a
    /// builder (frontend/bot/aggregator). Applies only to taker fills.
    pub builder_fee: Option<BuilderFee>,
}

pub struct BuilderFee {
    pub account_id: AccountId,
    /// Fee rate on notional value (same basis as exchange fee).
    /// E.g. 1bp = 100_000 nanos. Must be in (0, MAX_BUILDER_FEE_RATE].
    pub fee_rate: RateNanos,
}

/// Maximum builder fee rate: 50% = 500_000_000 nanos.
pub const MAX_BUILDER_FEE_RATE: RateNanos = RateNanos(500_000_000);

For example, if the exchange’s fees for a particular user are 2.5% and you added a 1% fee via the BuilderFee.fee_rate, and if the user did a trade worth $100 notional, then the exchange would get $2.50 and you would get $1 on top.

There’s no registration or any need to make the user sign anything. Just set your account_id, set your fee_rate, and let the money start rolling in.

Unlike most exchange affiliate programs, these fees are paid in USDC so you don’t have to manage fees in lots of different currencies. You just get a steady stream of USDC cashflow as more people start using your app.

Note that builder fees only apply on taker fills, not maker fills. In addition, referral discounts and referral kickbacks do not get applied on the taker side of transactions with builder fees, while the maker side is entirely unaffected by builder fees. The maximum builder fee you can set is 50%.