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Today @AndreCronjeTech released a bit more information about $SIL. Read more at https://andrecronje.medium.com/sushiswap-v2-single-sided-exposure-and-impermanent-loss-mitigation-24dbe434edbb.
For now, I'll try to explain what I think it does from the research I've done today.
For now, I'll try to explain what I think it does from the research I've done today.
1. $SIL does mint new tokens, but only at the current price of $SIL. At current prices that means that if you deposit 1 ETH ($1075) into the $SIL ($6.83) contract then ~157 $SIL are minted and added to liquidity. These $SIL are not able to be withdrawn or sold.
2. When you withdraw your liquidity the $SIL is burned and you receive your initial deposit. IL isn't completely avoided because of volatility, but it's way better than the existing solution.
3. New token pairs can be created that mint $SIL at $1 on the first deposit to that pair, but the price feed has to be added to https://etherscan.io/address/0x271bf4568fb737cc2e6277e9b1ee0034098cda2a. The only person who can add tokens here is Andre, so hopefully he doesn't randomly start adding tokens and dumping on people.
4. Each trade that involves $SIL incurs a 0.2% fee which goes to buying $wYFI from the $wYFI/$SIL pair. You can burn $YFI to mint $wYFI at a 1000:1 rate, so theoretically 0.2% of each $SIL transaction is creating buy pressure on $YFI.
5. What does this mean for apes? It's good for $YFI because of the reason above. It's good for $SUSHI because it creates an amazing differentiator over competitors.
6. For $SIL it's a bit more complicated. Currently you don't have to worry about new tokens being minted to dump on you. The only way new tokens are minted at $1 is if a new token pair is created, which can only happen if Andre allows it.
