# Yamato Protocol

[Official site (English)](https://app.yamato.fi/#/?lang=en)

## What is Yamato Protocol？

Yamato Protocol <https://app.yamato.fi/#/?lang=en> is a decentralized and non-custodial CDP platform developed by DeFiGeek Community Japan <https://defigeek.xyz/en/>

CJPY serves as an ETH overcollateralized stablecoin designed to maintain a peg to the Japanese Yen. In the future, the Yamato protocol will expand to encompass various tokens as collateral, and a diverse range of fiat stablecoins will be introduced, initially including USD and EUR pegs.

Dune Analytics Dashboard for Yamato Protocol Statistics\
<https://dune.com/dfgc/yamato>

DefiLlama Page for Yamato Protocol TVL\
<https://defillama.com/protocol/yamato-protocol>

## 1 CJPY ＝ 1 JPY peg mechanism

The CJPY is soft-pegged by **game theory** to be equivalent to 1 JPY.

{% hint style="info" %}
What is **game theory** (mainly Nash equilibrium)?\
The idea is that each side behaves either selfishly or rationally, leading to a targeted equilibrium point (in this case, 1 JPY peg). Incentives and other motivators are needed in the dynamics that always outweigh aggressive (destructive, irrational) behavior.
{% endhint %}

1. The minimum collateral ratio at the time of issuance is 130%, which means that 1CJPY can always be expected to be backed by collateral equal to or greater than 1 JPY.
2. 1CJPY can always be redeemed against collateral equivalent to 1 JPY.

### Force to repeg when the price is less than 1 JPY

* Demand to purchase CJPY to repay or redeem
  * Debt of 1 CJPY can be repaid for less than 1 JPY, which increases the demand for purchases in the market.
  * Since CJPY obtained for less than 1 CJPY can be exchanged for 1 JPY worth of collateral through redemption, demand for arbitrage-oriented purchases will increase.

### Force to repeg when the price is over 1 JPY

* Selling demand from CJPY issue in Yamato
  * 1 CJPY borrowed can be sold in the market for 1 JPY or more and demand for arbitrage-oriented sells will increase.