Davos Protocol is a new type of stable asset protocol that allows users to earn yield from staked assets with low collateral risk. Its mainnet was recently launched on Polygon, and early users could qualify for a potential airdrop. In this article, we will briefly explain what Davos Protocol is and what you can do to position for the airdrop.
The Davos Protocol is a new type of stable asset protocol that solves the problem of locked-up liquidity in a sustainable way. It achieves this by using liquid staking and over-collateralization to enable a real yield extracted from liquid staking rewards for Davos stable assets on proof-of-stake (PoS) networks.
The monetary policy of Davos regulates the price stability of the stable asset $DAVOS. Through a revenue distribution system, Davos rewards liquidity providers with a stable yield. It accepts coins from multiple PoS networks as collateral to borrow $DAVOS stable assets and runs diverse low-risk strategies to generate yield from the collateralized assets. The generated yield is then redistributed to $DAVOS stakers and DEX liquidity providers.
Does Davos Protocol Have a Token?
Yes, Davos Protocol uses a dual token model consisting of $DAVOS and $DGT. $DAVOS is the stable asset backed by staked MATIC as collateral, allowing users to yield farm. On the other hand, $DGT is used for platform governance, participants incentivization, and voting on upgrades such as adding a new vault or changing protocol parameters and fees.
$DAVOS is already live and in use, but the $DGT token will launch in the future.
How to Get the Davos Protocol ($DGT) Token Airdrop?
The best chance to get the $DGT token airdrop is to interact with the Davos Protocol mainnet. Here’s a step-by-step guide:
Connect Your Wallet to Davos Protocol
Connect your MetaMask or other supported wallets to the Davos Protocol app. Switch the network to the Polygon mainnet.
Deposit $MATIC as Collateral
Go to the borrow page, provide $MATIC as collateral to borrow $DAVOS tokens.
The Davos team recommends keeping the borrowing amount under 75% of the maximum limit to prevent loan liquidation, which could occur due to changes in the collateral’s value.
Stake $DAVOS to Earn $DGT
Go to the earn page, stake your $DAVOS to earn $DGT rewards which could translate to the token when it is launched.
If you unstake your tokens, you will need to repay the debt you owe in $DAVOS tokens to close your position.
Deposit on Gamma Boosted Vaults
On the same page, you can deposit USDC/DAVOS pair on Gamma via Uniswap or QuickSwap.
Provide Liquidity on Uniswap or QuickSwap
You can also directly provide USDC/DAVOS liquidity on Uniswap or QuickSwap.
Airdrop Review
When reviewing an airdrop, there are several factors to consider. First, the likelihood the project will even do an airdrop in the first place. Then, to look at how many tokens the project intends to allocate towards airdrop campaigns, as well as the difficulty in participating in their airdrop. It is also important to look at the utility of the token so that there will be an actual use and purpose in participating in the airdrop in the first place. Finally, a factor to consider when reviewing an airdrop is whether the airdropped tokens are subject to any lockup period.
Likelihood of Airdrop: Davos Protocol has not launched its $DGT token yet, but early users can potentially qualify for an airdrop.
Airdropped Token Allocation: Token allocation for airdrops is not confirmed yet.
Airdrop Difficulty: The steps are straightforward. Just provide $MATIC as collateral to borrow and stake $DAVOS. However, keep in mind that real funds are used, as it is deployed on the Polygon mainnet.
Token Utility: $DAVOS is the stable asset backed by staked $MATIC, whereas $DGT is the governance token of the protocol.
Token Lockup: There is no information on token lockup yet.
Yield Farming is a popular method for cryptocurrency owners to gain passive income. It involves taking advantage of various incentives rewards for locking-up (aka staking) different cryptocurrencies. This article focuses on yield farming for the $YFI token which has become the highest performing yield farming pool.
Check out our video on how to potentially earn 600% returns through YFI Yield Farming!
The yEarn project has launched its own governance token – $YFI – this week, sending the Decentralized Finance (DeFi) Yield Farming scene into a frenzy. As of this article, staking stable coins (USDT, USDC, DAI, or TUSD) into the Y pool will yield an astronomical 896% Annual Percentage Yield (APY). This is due to the incentive token $YFI being distributed to staked token holders, making this the single best yield farming pool right now. This has sparked a huge amount of interest in both searches for the $YFI governance token (trending right now on coingecko). Since the token launch, more than $60 Million of new capital has been deposited into the Y pool. Calculate yield using the community made yieldfarming tool.
WARNING: Yield farming involves a high amount of risk due to the experimental nature of the Ethereum network with potentially undiscovered critical vulnerabilities. Never stake/farm more than you can afford to lose. This is not Financial Advice.
What is the yEarn (iEarn) Pool
The iEarn “Y” pool is a yield aggregator – it automatically invests its capital into different DeFi projects – selecting those with the highest yield and return on investment. As a DeFi protocol, a smart contract keeps the invested funds – which makes the project non-custodial. The pool itself is comprised of 4 different stable coins – USDT, USDC, DAI and TUSD – with a total of over $103 Million USD in currency reserves (Assets Under Management – AUM). These reserves are then lent out to different protocols that offer the best rates of return, including Compound, Aave, and dYdX. yPools are considered riskier than other DeFi products such as Compound because lend capital out to a series of protocols – which themselves could be vulnerable to critical vulnerabilities.
How to Earn the YFI Token
There are two pools that reward the YFI token for staking. The first and easiest pool to access is the Y Pool on Curve.Fi. This pool is a collection of stable coins that are automatically invested in different lending protocols. This type of pool is usually considered a higher risk due to possible vulnerabilities not just with its own smart contract, but with other smart contracts too.
Unfortunately “Yield Farming” for the YFI token has ended. When YFI first launched, all 30,000 tokens were distributed to stakers on the https://ygov.finance/staking platform. Although initially there were plans to distribute more tokens, attempts to come out with a plan to do so have all been voted down in the Y governance. This means it’s unlikely that new $YFI tokens will be distributed in the future. Other tokens such as YFII and YFV still have token distribution for yield farmers.
What is YFI token
Liquidity provider profit on Y Pool
YFI is the governance token for yEarn (previously known as iEarn). Tokenholders are entitled to vote on upcoming governance decisions for the network – such as potentially stopping all-new distribution of the token. Creator of YFI, Andre Cronje (@AndreCronjeTech) has stated that the token has no intrinsic value.
“We have released YFI, a completely valueless 0 supply token. We re-iterate, it has 0 financial value”
Andre Cronje
This being said, the current wave hype wave and token dynamics have driven up the value of the token. The token follows the “Governance” model where it’s value comes from voting on where the protocol will go next. On top of this, the incentivized Balancer pool (YFI 2%, DAI 98%) requires the staking of $YFI, which locks up further supply. Simply put, DeFi farmers are locking up YFI and DAI in order to receive BPT tokens which could be staked on ygov.finance to gain an additional $YFI. This type of cyclic farming create pseudo ponzinomics and could lead to potentially disastrous results.
Balancer Warning & new coin minting risk
One of risks that was mitigated by the team was with token issuance. Currently there is a max cap of only 30,000 YFI tokens. Earlier this week it was discovered that there was a master key which permitted YFI developer Andre Cronje to mint new coins and potentially flood the market with new coins. If he did this, it would of been possible for him to take the entirety of Pool#2 and Pool#3 on Balancer, with a total of more than $150 Million USD. Luckily this did not happen, as he quickly created a multisignature address which requires 6/9 key holders to agree to minting new tokens. The purpose of this is to remove single party risk as 6 of the 9 keyholders are required to agree to create new coins. On top of this, even if they do agree, the community will have 3 days notice before anything happens.
Overall the long term objective of YFI is to leave control of the total supply of YFI and distribution up to the community to decide. The voting aspect of YFI will allow governance token stakers to decide who to do with the platform.
YFI distribution stop
Distribution of $YFI tokens will temporarily stop as new contracts are being prepared. Times for the pools stopping are as follows:
Decentralised Finance (DeFi) series: tutorials, guides and more
With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
YFII (now formally known as DFI.Money) is a fork of the yEarn project (YFI) which offers a different token distribution model where token emissions are halved every week (YIP-8). This economic design encourages active participation in the mining of $YFII whilst allowing late-comers to still earn rewards. YFII functions as a governance token for the community – as tokens are required to vote on new decisions and implementations. As of this article, over $150 Million USD has been locked under the YFII pool 1– signifying the development of a strong community.
YFII is designed to have 3 different pools with each distributing 10,000 tokens on the first week of release (July 27th), with the amount halving every subsequent week.
The developers originally intended to implement this change via a governance vote “YIP8” – however, this was not passed by the community. This has led the creation of the YFII fork which directly implements a weekly halving model for YIP emissions. This has led to growing support for the project, especially in the Chinese community. $YFII shares a 98% code similarity to YFI, with the key difference being the “halvening” added clause – for more information check this comparison.
The launch of YFII was controversial and initially met with scam accusations – as the western community feared YFII was an exit scam. This was mostly due to the presence of potential back-doors such a “minter” and “governance” addresses that could create any number of new tokens (infinite token risk). These issues were later resolved by the burning of the “governance address” and clarification of the “minter” addresses.
Metamask Phishing Detection Warning
Is it Safe to Yield Farm YFII
YFII is offering very high returns on investment, with pool 2 offering more than 2000% as of this article. The important question now is if it is safe to yield farm YFII. Metamask has issued Phishing warnings for the YFII site, likely a result of initial ‘report’ submissions warnings against the project.
The key point of contention was the presence of an ‘owner key’ which could have been used to create an infinite supply of YFII. This issue has been corrected by the community after the owner key was burned – meaning that no new tokens can be created without the community agreeing to it via governance votes. There have also been a few alarms raised by the Balancer project, where the YFII-DAI pool was deleted temporarily.
The Chinese Wechat community has been fast to call out against un-founded pre-justices against the project. Many have called Balancer centralized and potentially untrustworthy after these accusations/frontend censorship.
To find out more about the estimated Annual Percentage Yield (APY) generated by YFII farming, check out the farming tool by Weeb https://yieldfarming.info/yfii/ycrv/
How do you yield farm YFII
*NOTE: Yield farming is extremely dangerous and can include risks such as infinite mint / smart contract vulnerabilities / token price volatility. This activity is not SAFE and should be viewed as EXTREMELY experimental. You have been warned*
There are three different methods to mine YFII – all of them give different yields of YFII and have different associated risks. It’s not necessary to learn all of the methods – rather it’s important to understand they have different risk profiles.
RISKS: Y Curve Pool uses stable coins and automatically invests them into different protocols. This is considered high risk as any vulnerabilities in any of the protocols can lead to theft of funds.
Pool 2: This uses Balancerās 98% DAI: 2% YFFI liquidity pool
RISKS: Funds will be used to automate market making – meaning if the is a sudden large sell of YFII, then DAI tokens will be used to buy the YFII. This means price drops/volatility of YFII is a can lead to a reduction of pooled assets.
Pool 3: Staking YFII in the “governance” Pool
After successful staking, you should be able to see ārewards availableā increase over time with more YFFI tokens. Tokens can be claimed at any time using āclaim rewardsā. On top of this, staking staked tokens can also be unstaked at any time with no lockup.
YFII Governance
During the bootstrap phase of YFII, the developers have chosen to use a multi-signature governance model where power is shared between 11 signatories. For a resolution to be passed and enforced, 7 out of the 11 signatories need to approve the action using a gnosis-vault. This is a temporary measure that improves the speed of contract deployment whilst power is transitioned to the YFII governance DAO (YFII voters get to vote on what to implement). More information can be found about the 11 signers & twitter verification here: https://keys.yfii.finance.
YFII distribution
YFII distribution chart
YFII Wechat Group (Chinese)
YFII community has a large Wechat group. To find the group, search myGrassU and type 3 to receive an invite into the group. In an open letter from the YFII community, the creator of YFI was officially acknowledged with a badass photo.
YFII lists on Binance
Binance listed DFI.Money (YFII) on 1st September 2020 with the following trading pairs: YFII/BNB, YFII/BTC, YFII/BUSD and YFII/USDT. No listing fees were paid by YFII for this listing- clearly Binance listed YFII in response to the overwhelming popularity with DeFi farmers and enthusiasts. Popularity and community is a huge factor taken into Binance when deciding what to list, as revealed by Co-Founder and CEO Chengpeng Zhao (CZ) during our interview.
YFII’s listing on Binance gave them a huge boost, pretty much doubling the token’s value to over USD$8,000 in just one day.
FAQ
Is YFII Safe?
YFII has similar contracts to Synthetix and YFI – so it’s not a total scam. However, it has yet to be proven if YFII is safe due to potential mart contract vulnerabilities. YFII has not yet been audited
How do I add to the Balancer Pool 2
Unfortunate Balancer has removed the add liquidity feature on the Pool (due to fears of potential infinite minting risk). To add to Pool 2 you need to use the balancer fork provided by YFII
Decentralised Finance (DeFi) series: tutorials, guides and more
With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. (Acetaminophen) As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
YFFI is a YEarn inspired governance token that is rewarded to cryptocurrency yield farmers (also known as liquidity miners). Due to the rising popularity of yield farming and the $YFI token, projects have taken the opportunity to create alternatives that can appeal to different communities. YFFI is one of such forks and it labels itself as “You Finally Found It – the Freshest Crops in Town”. This variant includes code similar to YFII, which halves new token distribution every week.
YFFI claims that the ability to create new tokens has been destroyed by setting the “reward” address to 0000000. We haven’t fully looked at the code and there could be additional undiscovered vulnerabilities.
Low Supply Warning
The reason why YFI coins are highly volatile is due to the extremely slow initial supplies of the coins. As there is no pre-mine, team tokens and minting, the initially supply will only be from yield farmers. This means that in the first few days, supply will be extremely low, but increasing dramatically at 100% per day. This leads to wild swings in price and high volatility.
How do you yield farm YFFI
*NOTE: Yield farming is extremely dangerous and can include risks such as infinite mint / smart contract vulnerabilities / token price volatility. This activity is not SAFE and should be viewed as EXTREMELY experimental. You have been warned*
YFFI can be mine using two major methods, each with different risks and steps:
RISKS: Y Curve Pool uses stable coins and automatically invests them into different protocols. This is considered high risk as any vulnerabilities in any of the protocols can lead to theft of funds.
Pool 2: This uses Balancer’s 98% DAI: 2% YFFI liquidity pool
After successful staking, you should be able to see “rewards available” increase over time with more YFFI tokens. Tokens can be claimed at any time using “claim rewards”. On top of this, staking staked tokens can also be unstaked at any time with no lockup
Premine accusations & resolution
Premine accusations – YFFI was accused of having early pre-mine due to the early stages where the pools only had 7 different participants with 10yCRV each. This means that early rewards were split between very few people, allowing them to accrue higher rewards. To address these issues, the admins have decided to burn 175 YFI that was mined during the early stages.
Decentralised Finance (DeFi) series: tutorials, guides and more
With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
YFV (YFValue) is a YEarn inspired governance token that is rewarded to cryptocurrency yield farmers (also known as liquidity miners). YFV functions as a DeFi Yield aggregator – they will release a “Vault” like product which will deploy different strategies to farm DeFi yields. $YFV in the governance coin on the platform which will be used to vote on Decentralized Autonomous Organisation (DAO) decisions. YFV sets itself apart by also minting two elastic supply coins, $vUSD, and $vETH – coins that will rebase to target the price of USD and Ethereum respectively. These tokens will function similar to “Ampleforth” in terms of rebasing functionality. The team behind the project has chosen to remain anonymous.
YFValue functions as a DeFi Yield aggregator, releasing a “vault”-like product which will deploy different strategies to farm DeFi yields.
There are 2 types of pools for $YFV farming: Seed Pool v2 and Balancer Pool.
Farming $YFV also generates $vUSD, and $vETH ā these rebase to target the prices of USD and Ethereum respectively.
$YFV acts as a governance token for voting on decisions relating to the project. Some people also trade the token on exchanges.
How do you farm $YFV
Yield farmers can farm $YFV in two types of pools:
Option 1: Seed Pool v2. This your classic yield farming pool – tokens are staked into the pool and $YFV will be distributed over time. There is no risk of impermanent loss
On the “Seed Pool v2” page, deposit either USDT, USDC, TUSD or DAI (i.e. stablecoins)
Click the Stake token button.
Option 2: Balancer Pools. This is the higher risk pool, where funds are added to a Balancer liquidity pool. This means the funds will be actively used in automated market making and possibly risk impermanent loss. On YFV there is a total of 8 Balancer Pools. For the purposes of this tutorial, let’s look at the example of using the WETH Balancer Pool of WETH:YFV.
You can claim your YFV rewards by simply clicking “Claim Rewards”. However, this requires gas fees so you need to consider the gas fees paid to stake your tokens in the first place etc and decide if it is actually worthwhile to collect your rewards.
How are people profiting off YFV? What do I do with the YFV tokens?
So what is the purpose of farming all these YFV tokens? YFV is the governance token of YF Value protocol. This means holders of the YFV token can use it to determinate and update the functionality of YFV protocol and change or update the rate of distribution of YFV tokens. Those that stake in YFV pools has the right to vote on-chain for the distribution rate. At the end of each week, the total votes will be automatically counted and the distribution rate of YFV will be automatically changed.
On the other hand, you can also trade your tokens for ETH or USDT on exchanges such as Uniswap, Balancer, Hotbit, BKEX and Bilaxy. The below chart shows the value of YFV/USD.
What is vUSD and vETH?
As you can see in the above section “How to claim your YFV”, in addition to YFV tokens, staking YFV also gives you vUSD and vETH tokens. A total of 1,000,000 vUSD and 1,000 vETH will be distributed to all the yield farming pools according to their percentages. According to YFV, once all the pools have been exhausted of YFV, vUSD and vETH will use an oracle price feed to match the prices of USD and ETH. Similar to Ampleforth (AMPL), there will also be a rebase of vUSD and vETH every 24 hours.
YFV Farming risks
The biggest risk of YFV farming comes from potential vulnerabilities in the staking contract. on 30th August 2020 YFV announced that the audit of YFV Protocol had been successfully completed by The Arcadia Group. According to YFV, the audit identified a small number of low severity issues relating to code quality and health. No high or critical severity issues were found. The letter from Arcadia and a summary of the audit report can be found here.
There is also the question of the limited supply of YFV tokens. There is only ever going to be 21,000,000 YFV tokens so some of the (perceived) value of the token is because of its limited supply. But what happens when every YFV token has been mined or distributed? This is unknown and it is worth noting that YFV is currently backed by any other asset.
Minting Risks
One of the biggest concerns about YFV was the presence of minter keys – which could potentially mint an infinite number of $YFV tokens. Developers have stated that all minter keys are burned, and pools which could mint new tokens have also had minting features removed.
YFV had previously also confirmed and addressed community members’ concerns that there was a minting key oversight and exploit related to vUSD and vETH which would allow funds to be locked. What YFV did to remedy this was that they kept the minting keys until they were able to recover the funds that some users may have lost by farming in Pool 0. After that, the team transferred the governance keys of vETH and vUSD from YFV protocol to several members of the community to hold in safe custody. The community members selected were: Reuben Yap (COO of Zcoin), DeFi Dude, Matthew Neimerg (CEO of Cardinal Cryptography), TQT, Ian Ocasio and myself.
Decentralised Finance (DeFi) series: tutorials, guides and more
With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
StoneDefi ($STN) considers itself the only yield management protocol which is focused on creating “Rock Solid Yield” for users of the decentralised finance (DeFi) ecosystem.
StoneDefi was founded in September 2020 by Alex Lam. Previously, Lam had worked with government-affiliated Institutions before taking up a keen interest in cryptocurrency. He has so far become actively involved in the crypto world, building platforms to support investment pools, notably RockX.
Rockx provides some degree of support to StoneDeFi thanks to Lam’s influence. However, StoneDefi is currently run by a team of about 7 people scattered across South-east Asia.
In the later months of 2020, StoneDefiās project caught the attention of Singapore-based Venture Capital, Signum Capital. The project then received early-stage funding from the VC of undisclosed value. Signum Capital exclusively deals with blockchain startups and innovations.
Together with his team of finance and cryptocurrency experts, Lam guides StoneDefi as the project leads to becoming the only rock-solid yield management protocol for crypto assets.
What is StoneDefi?
StoneDefi, commonly referred to as Stone, is a yield management protocol that functions to ensure maximum returns for liquidity providers. It also secures capitals in asset pools and yield farms to safeguard investorās interests in the DeFi sector.
StoneDeFi was designed to create a “rock-solid” yield for DeFi investors. Stone differs from other yield aggregator platforms in the priority it gives to the credibility of investments. The protocol focuses on the viability and integrity of all digital assets over just the potential yield.
After all, the name āstoneā comes from the idea of a rock-solid yield aggregator.
Most yield aggregators are notorious for their risky strategies endangering investor funds in high-risk pools. StoneDeFiās developers see a far bigger future for DeFi and understand the role of investors in it. Therefore, their enduring emphasis on “rock-solid” yield to transform funding in the DeFi space from just speculations and get-rich-quick schemes into a credible institution.
They are able to achieve this by carrying out thorough assessments of the sustainability and integrity of different investment pools. The protocol also carries out regular audits of active pools and yield farms to keep up with changes and safeguard investor funds.
By hedging single assets through indexes, the protocol is able to venture into more volatile pools while mitigating investorsā risk. Consequently, investors can enjoy a reliable and consistent passive income from liquidity pools through Stone’s protocol.
How to earn yield on Stone DeFi (Image credit: Stone DeFi)
Liquid Staked Assets
To ensure stable and maximum yield to users, StoneDefi has explored a number of alternative farming strategies. One of Stone’s more progressive strategies is staking in liquid assets.
Stone, in collaboration with platforms that generate staking derivatives (notably StaFi), has developed a way to use LP funds to create a flexible redemption for rigid PoS stakes. Stakers can redeem locked tokens for rTokens which can be subsequently traded on platforms like Uniswap while still accruing yield on their locked stakes.
For the liquidity of staked assets to be viable, there must be a system by which the credibility of user funds is ascertained. Stone’s extensive assessment protocol plays a vital role in this phase. This flexibility would see tokens in sufficient circulation without inflation while accelerating its price discovery on DEX.
Users can also use staked tokens for other purposes, especially trading where they have access to their profits without the restrictions of the unbounding that can sometimes take up to 28 days.
STN Token and The Stone DAO
Just like other yield aggregators, StoneDefi has its own native token which is tied to most activities carried out on its platform. The Stone token or “STN” has a variety of functions that ensure smooth participation and exchange on StoneDefi.
STN’s most important function is to ensure effective protocol governance through its Decentralized Autonomous Organization (DAO). Individuals who stake STN tokens are granted voting rights and the ability to propose adjustments in the way the protocol is run.
This DAO approach seeks to ensure open and transparent governance of investor funds to counteract closed and centralized regulation, which is a common problem for yield aggregators.
Stoneās token is also used to reward participation in investment pools. When Liquidity providers participate in different recommended pools, they are given different quantities of STN as acknowledgement and reward.
However, not all pools attract the same number of STN tokens. Token rewards are distributed to encourage participation in less populated pools. This system of incentivizing smaller pools would ensure portfolio rebalancing.
Distribution of STN
STN is also used for paying transfer fees in cross-chain executions, as well as standing as the security deposit in liquid staked assets. To prevent the devaluation of STN, a system where some percentage of STN tokens in the market are bought back to be burned is put in place. A percentage of the Stone platformās fee income is used to fund the purchase of the STN tokens to be burnt.
Conclusion
While several yield management platforms have been successful in generating a consistent return for investors, one thing that they often get wrong is risking their user’s funds at the expense of high yields. This is symbolic of short-term thinking that could have dire consequences on the DeFi sector and possibly the entire crypto industry if asset pools are not given adequate risk assessments.
But with an innovative approach to yield management, StoneDefi is able to ensure maximum yield for users without having to risk user fund without cause. Their open and transparent method of governance through a DAO is also promising, giving investors the authority to contribute to the administration of their funds.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. (https://www.stocktargetadvisor.com/) Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
PancakeSwap is one of the most popular yield farming projects on Binance Smart Chain. However, beyond the usual yield farming method, PancakeSwap offers multiple products which users can maximize in order to leverage their holdings. This makes PancakeSwap is a strong competitor against similar projects in the space such as Uniswap.
Check out or video on PancakeSwap yield farming strategies and particularly how to avoid impermanent loss!
https://www.youtube.com/watch?v=XCqAa6a5EQ8
PancakeSwap yield farming strategies
What is PancakeSwap?
PancakeSwap is a decentralized exchange (DEX) platform that facilitates the trading of BEP-20 tokens. It implements an automated market maker (AMM) model to provide liquidity on peer-to-peer trades within the protocol.
Through this model, PancakeSwap matches buy and sell orders from different platform users directly in a liquidity pool. The supply of tokens in this pool is provided by user deposits in a process called āstaking.ā
When they stake tokens, PancakeSwap rewards them in return with a proportional amount of their share in the platformās trading fees as well as liquidity provider (LP) tokens. The LP token that stakers will receive as an incentive will be the same asset that they supplied to the liquidity pool.
But basically, it works closely similar to how Uniswap and SushiSwap works. Even its user interface looks almost the same. The difference lies in the yield strategy that anyone can take advantage of in the platform. When users stake, they also earn CAKE tokens.
There are multiple liquidity pools where users can stake. Here are some examples for them:
CAKE-BNB
BUSD-BNB
BETH-ETH
USDT-BUSD
USDC-BUSD
DAI-BUSD
LINK-BUSD
TWT-BNB
CAKE token: What is it?
PancakeSwap token ($CAKE) is the platform’s native token. Users are rewarded with CAKE tokens for staking their funds on the platform. They can then stake their CAKE tokens to earn other types of tokens on special staking pools. The CAKE token is mainly for participating in community governance where users can vote on decisions relating to the direction or running of PancakeSwap.
PancakeSwap Guide: How do you start using PancakeSwap and earn CAKE tokens?
PancakeSwap is easy to use. First, you will have to visit their website at https://pancakeswap.finance/ and link your wallet there. You have the option to connect it to your MetaMask, Binance Chain Wallet, WalletConnect, and Trust Wallet, among others.
As mentioned, it also supports MetaMask even if that wallet is Ethereum-based. This is because the platform is built on top of the Binance Smart Chain (BSC), which supports interoperability between Ethereum-based wallets.
On the platform, there are options to either swap your tokens or supply liquidity in the āpoolsā section. There is also an option to start āfarmingā if you look through other sections.
You can farm CAKE tokens on the platform. But before you can start doing so, you first have to supply liquidity to PancakeSwapās pool in order to earn rewards in CAKE tokens. You can stake them back to the platform and get more in return. And again, users can also farm other tokens by participating in other liquidity pools.
Syrup Pools
Project owners can launch their tokens with the help of the Syrup pools. Here, they can commit a portion of their own tokens and distribute them to CAKE holders. There will be two categories for projects supported by the Syrup pool: Core and Community.
Core projects are those that have been vetted by the team behind PancakeSwap. Community projects are those that CAKE holders voted in governance decisions. Despite this, anyone can distribute their tokens to CAKE holders through the Syrup pool. However, only the projects that get the vote of the community gets to be listed on the interface of the platform.
PancakeSwap syrup pool (Image credit: PancakeSwap)
Transaction Fees
DEXs that follow the AMM model also charge trading fees. Users that participate in liquidity pools receive their LP token rewards on top of the accumulated trading fees on the platform.
PancakeSwap charges 0.2% trading fees for users. In these fees, 0.17% is redistributed to liquidity providers with the other 0.03% allocated for burning by the PancakeSwap Treasury.
Since the platform is decentralized, this distribution schedule can be revised by the stakers as necessary.
CAKE Lottery
There is also an option for users to join the CAKE lottery. It will have an interval of 6 hours per lottery session and you can get one lottery ticket for 10 CAKEs. This ticket will generate a random four-digit combination of numbers between 1 to 14.
A winnerās take-away can go as high as 50% of the entire lottery pool if their ticket numbers match all four winning numbers on the lottery. There are also rewards too even if at least two of your numbers match the same position as the ones on the winning ticket.
Non-Fungible Tokens (NFTs) on PancakeSwap
PancakeSwap also offers an option to participate in the exchange of collectibles on the platform. There is a section for non-fungible tokens (NFT) (called “Pancake Collectibles) represented by cute figures that users can trade for CAKE. You can choose to keep these NFTs if you own a few and trade them at a sooner date.
PancakeSwap introduced Initial Farm Offerings (IFO) on the platform to help out newly-launched tokens in opening opportunities for yield farming. To do this, users can commit their LP tokens to available pools. Here, those who will launch their tokens to the IFO will first be asked about the specifics of their project like their tokenās current development stage, use case, distribution schedule, smart contract audits, expected valuation, and the purpose for the fundraising.
Is PancakeSwap safe?
PancakeSwap is audited by CertiK, one of the most reputable smart-contract auditors in this space. However, there is always risks involved in using these platforms such as bugs, which could result in loss of funds.
Conclusion
There are many yield farming projects in the space today and it can be difficult to assess where to focus on. And in selecting a platform to use, it is important to look beyond their promised APY. On multiple fronts, PancakeSwap seems to be a strong competitor to some of the biggest yield farming protocols in the space today.
Since the platform is built on top of the Binance Smart Chain, it has an edge because this means that their blockchain network is faster than others in the space as it features around 3-5 second block times with their Proof-of-Stake model. Above that, there are other profit-generating opportunities with PancakeSwap. Beyond yield farming, users have the opportunity to participate in lotteries, collect NFTs, and launch fundraising rounds through IFOs. These are features that many other popular yield farming projects do not offer yet.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
One of the benefits of BSC is that the Ethereum blockchain has been plagued lately by exorbitantly high fees and delayed transaction processing times. This has resulted in retail or average users getting priced out and unable to participate in decentralised finance (DeFi) or NFT activities. For some investors, itās simply too much to pay $15-30 per transfer and $50-100 per Uniswap asset conversion.
Therefore, BSC has risen up to the occasion to alleviate some of these problems by cloning and porting Ethereumās most used DApps over to its blockchain. Thereby offering an attractive alternative with its low fees and near-instant transaction processing time.
Background
Binance Smart Chain (BSC), the blockchain Bakerswap runs on, is a project from Binance – the largest cryptocurrency exchange in the world by traffic volume and traded amount. It is an Ethereum fork with a Proof of Staked Authority (PoSA) consensus mechanism and the ability to integrate with the Ethereum Virtual Machine (EVM). There are 21 validators staking large amounts of BNB, who process activity.
The identity of these validators isnāt known but is largely believed to be Binance permissioned actors. These validators need permission from the Binance network to run the validator node. Furthermore, the BNB token holdings are greatly controlled by the Binance team or founders. Itās a permissioned network.
But, it does have its benefits. It ensures high throughput transaction processing and low fees for the users. Itās an experience for the users, who otherwise wonāt be able to experience DeFi and NFTs. Binance further returns some part of the transaction fees to the developers to give them the incentive to develop on the BSC network.
BakerySwap
BakerySwap is a Uniswap clone that allows for orderbook-less automated market maker (AMM) services and NFT trading. It runs exclusively on the Binance Smart Chain (BSC). Itās marketed by Binance as having ācheaper fees and faster confirmation time than Ethereum”. Also included are the functionalities for staking with users providing liquidity and earning new tokens, combination NFTs and pets feature.
In the place of orderbooks, liquidity pools are used to conduct swaps. In a similar manner to Uniswap, the participants receive Liquidity Pool (LP) tokens and can redeem them for assets supplied and fees earned when liquidating them. Thatās according to their share in the pool gathered from the assets. Recently, an Initial DEX Offering (IDO) has also been introduced which allows projects to raise capital.
BakerySwap Fees
BakerySwap has a 0.30% fee for every activity on the platform, 0.25% goes to the liquidity providers and the remaining 0.05% will be used to buyback BAKE from the market and distributed to BAKE holders.
How To Access BakerySwap Through MetaMask
Itās pretty simple to access BakerySwap through Web3 wallets like MetaMask. Simple click the MetaMask button and open the dialog box and it will show Ethereum mainnet by default.
Connecting to BakerySwap
Then, enter the following information in a case-sensitive manner.
Click Save and then switch to Binance Smart Chain. Now you can access BakerySwap. To transact on the BSC network, you need to have Binance Coin (BNB) on your wallet, so buy and withdraw them to your MetaMask as BEP20 standard tokens.
BakeryToken ($BAKE)
The native token of Bakeryswap is called BakeryToken or BAKE, which is earned by providing liquidity to asset pairs and staking liquidity pool tokens or by staking BAKE itself. Since this is a food-themed clone, itās possible to deposit the liquidity pool tokens into different pools of Doughnut, Waffle, Rolls, Croissant, Latte, etc. with different ROIs.
There was no pre-mine and/or presale of BAKE tokens. The tokens reserved for the team are only 1% because of their belief in a fair distribution model. Its distribution is skewed in favor of people staking tokens and the total supply is 731,745,000 BAKE. The tokens will be gradually released with the communityās consultation and advice.
NFTs
On the Binance Smart Chain, BakerySwap is the first AMM plus NFT project. The native BAKE token can be used to create a āfood mealā – a fancy term for a NFT, which can be used to farm BAKE again.
Every food meal has a different staking multiplier and earns proportional rewards. Plus, it can be traded for other NFTs and burned to yield BAKE.
The platform also has an NFT Supermarket which allows artists to turn their artworks into NFTs through the minting process and to sell them. Users can buy artwork at the Supermarket using BAKE tokens.
Despite having an interesting overlap of two emerging fields in blockchain tech, the innovation doesnāt seem to slow down at BakerySwap. As such, the team has announced that they would introduce the stake to farm NFT functions like MEME. A novel bidding and auctions system would also be developed.
In DeFi and NFTs, gamification is key to engage users and keep them involved. BakerySwap will create raffles and rewards for completing BAKE tasks. AMM/NFT data analytics and token price charts are also under development. At some point in the future, margin trading and derivatives would also be deployed on BSC.
BakerySwap Ethereum 2.0
Like any emerging unconventional DeFi protocol, BakerySwap has had its fair share with procuring and managing liquidity for the yet-to-be-launched Ethereum 2.0. It has been reported to be working to integrate Ankr staking services aETH – a synthetic asset representing deposited Ether tokens, which will be used to create new farming pools.
BakerySwap has also launched its own Eth2 BETH token, in partnership with Binance.
Conclusion
BakerySwap marks the introduction of an interesting experiment and an attempt to include users, which have been left out because of the high fees on the Ethereum network. At a fraction of cost and rapid transaction processing, retail users can try out the asset swap and NFT minting functions without clearing out their wallets for fees.
The project takes Uniswap one step further, adding elements of NFT and gamification. Plus the tokenomics ensure value accrual and incentives for users to continue holding the token. The trajectory of BakerySwap doesnāt appear to be descending and notable features are waiting to be implemented in the coming days.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
The NFT industry has become one of the most exciting spaces amongst emerging blockchain and crypto trends. With many related projects and startups launching, the sector is becoming more popular and has provided creators with significant earning opportunities.
NFT creators constantly seek more accessible ways to publish and market their assets to varied audiences while also maximizing potential returns on their art. Buyers who like to collect NFTs also look for the best marketplace that curates these assets and facilitates easy access to purchases and rewards. The Starly platform provides all these and more to both categories of stakeholders.
Starly is an NFT-focused launchpad and marketplace where users can create, buy, and sell gamified NFT collectables. The platform aims to make creating, selling and collecting NFTs as seamless as possible. Starly offers complete creative control to NFT minters, allowing them to set prices, rarity ratings, and decide preferred launch dates.
Each Starly NFT collection consists of 21 unique NFTs (or NFT cards) divided into three packs for ease of valuation. The packs are composed of 11 common cards, 6 rare cards, and 4 legendary cards. Members of the Starly community can purchase and sell NFT cards on the secondary market, or buy all the cards in a collection to receive special rewards reserved for buyers who acquire complete collections.
NFT Staking on Starly
Collectors can stake their NFT cards for Starly token rewards based on the value and rarity of the NFT. Each NFT card in a collection has a Card Score determined by its pack (common, rare, or legendary) and price. Stakers can earn rewards in $STARLY- the projectās native token. The total $STARLY staking reward for each NFT card is equal to its Card Score and gets distributed daily for over a year. This means that it would take 365 days to accrue the total $STARLY staking reward.
Although users can claim a limited number of token rewards, these rewards depend on the userās Starly token tier. Starly uses the following formula for reward distribution:
Card Score/365 = Token Amount Distributed for 24h.
For instance, if a user stakes an NFT with a Card Score of 15,000, the available token staking reward for that card is 15,000 $STARLY. The user can claim up to 41 $STARLY (15,000/365) daily depending on the membership tier until the user exhausts 15,000 $STARLY.
Starly Token Staking Tiers
Token holders staking $STARLY are categorized into reward tiers curated according to the number of staked tokens. The tiers include the Silver, Gold, and Platinum memberships, with the following required token amounts:
Silver Tier: a minimum of 1000 $STARLY staked
Gold Tier: a minimum of 10,000 $STARLY staked
Platinum Tier: a minimum of 50,000 $STARLY staked
These tiers come with varying benefits, including the ability to claim more daily NFT staking rewards. Members of the Starly community who stake their NFTs but have no staked Starly tokens are not placed in any of the three tiers and can claim only 2 of the available daily token rewards. Silver, Gold, and Platinum tier members can claim 10, 100, and 500, respectively.
Furthermore, if an NFT card is unstaked, all unclaimed rewards of the staked card remain locked on the card till the user stakes it again. Additionally, if the unstaked NFT card gets sold, the new owner gets all unclaimed staking rewards locked in the card and can stake the card again for token rewards.
$STARLY Token
$STARLY is the platformās native token, helping creators earn from their NFT assets. On the Starly marketplace, creators can monetize their NFT collectibles and receive rewards for their effort via $STARLY tokens. The platform has a total supply of 100 million tokens allocated for different uses. For instance, the largest allocation is for the Product and Ecosystem Development Fund at 31.25% or 31,250,000 tokens. Others include 22% for the Team and Advisors, 20% for the private sale, and 0.75% for the public sale. Furthermore, Starly allocated 5% each for token liquidity and staking payouts, while reserving 16% for the community.
Benefits Of Starly NFT Staking
All NFTs have inherent value that provides some aspect of collectibility or utility to collectors. However, collectors can derive additional value by staking these NFTs on Starly. The primary benefit of staking owned NFTs is that users can accrue more $STARLY and then re-stake for added rewards. As users collect more tokens, their designated membership tier moves from Silver to Gold or Gold to Platinum. New tiers furnish users with additional Starly benefits, such as voting rights and exclusive NFT drops from selected artists.
Staking has become a significant way of contributing to projects across the blockchain and crypto space, with billions of tokens and coins locked on many platforms. NFT staking is no different and is an excellent way for users to earn passive income from idle NFT collections. Although the concept is still relatively in its infancy, Starly opens users to more NFT staking opportunities with the possibility of progressive rewards.
Aave Protocol with their native token $LEND is a leading company within the decentralized finance (DeFi) sphere. The Company allows its users access to its open-source and non-custodial protocol to create money markets, joining a growing list of projects like Compound to bring decentralized options to the masses. We look at who is Aave ($LEND), its uses and how it differs from other projects such as Compound Finance.
What is Aave?
Named after the Finnish word for “ghost”, London-based company Aave was set up in September 2018 after a successful initial coin offering (ICO) the previous year for its ETHLend token which raised USD$16.2 million. The executive team under ETHLend migrated to Aave upon its establishment with ETHLend becoming a subsidiary of Aave. In January 2020, ETHLend announced it was no longer in operation and its website would only remain active for current users to close down their existing loans.
Aave’s aim is to fill in the gaps left by centralised fintech industry giants like PayPal, Skrill and Coinbase. Their main product is Aave Protocol, an open source and non-custodial protocol for creating money markets on the Ethereum blockchain.
Who is the team behind Aave?
Aave has a wealth of talent and experience within its team. Stani Kulechov (CEO) and Jordan Lazaro Gustave (COO) have retained and migrated their roles from ETHLend, bringing their wealth of knowledge to Aave. Their diverse 18 man team bring together a wealth of experience in the startup scene.
What is Aave Protocol?
Aave’s biggest and most integral aspect is Aave Protocol which was launched in January 2020. Its shift from ETHLend marked a significant shift in strategy for the Company. Going from decentralized P2P lending to a pool-based strategy, Aave Protocol is an open source an non-custodial protocol that allows users to create their own decentralized money markets on the Ethereum blockchain.
Aave Protocol
Depositors provide liquidity by depositing cryptocurrencies into lending pools which will then allow them to earn interest. Meanwhile, borrowers can obtain loans by tapping into these lending pools in either an overcollateralized or undercollateralized way. The loans do not need to be individually matched i.e. one lender to one borrower. Instead, deposits into the pool and the amounts borrowed/ collateral are used to make instant loans based on the poolās state. There are currently 2 money markets that users can enter into, these are Aave and Uniswap.
Aave markets
Flash Loans
Aave has one feature that sets it apart from the rest. Flash loans allow customers or to take out loans without any collateral. These flash loans enable a customised smart contract to borrow assets from Aave’s reserve pools within one transaction. The loan is made on the condition that the liquidity is returned to the pool before the transaction ends. However, if it’s not repaid by that time, the transaction gets reversed- which will effectively undo any actions executed until that point and guarantee the safety of the funds in the reserve pool.
The Fast Loan feature is designed for developers to make tools that require capital for arbitrage, refinancing, or liquidating purposes. Aave explained Flash Loans saying it is ādesigned for developers/people with some technical knowledgeā, with the benefit of risk-free loans. Aave charges a 0.09% fee on flash loans.
Rate Switching
Rate switching is another unique selling point for Aave, which arrived during the May upgrade of their borrowing/interest rates. Rate switching allows borrowers to switch between fixed and floating interest rates, something useful in a volatile decentralized market. For high-interest rates, users will usually opt for the fixed-rate but when it is more volatile and expected to be lower, one might go for the floating option to reduce borrowing costs. The fixed-rate can change but only when the deposit earning rate increases above the fixed borrow rate as the system could get unstable by paying out more than its being paid. If so, the fixed rate is rebalanced to the new stable rate. On the other hand, when the variable rate is lower than the fixed-rate by 20%, the loan will automatically decrease to account for the difference.
Which Cryptocurrency Tokens are linked?
There are 19 tokens available on Aave. These include DAI, USD Coin (USDC), TrueUSD (TUSD), USDT Coin (USDT), sUSD, Binance USD (BUSD), Ethereum (ETH), Basic Attention Token (BAT), Kyber Network (KNC), ChainLink (LINK), Decentraland (MANA), Maker (MKR), Augur (REP), SNK, Enjin Coin (ENJ), REN, WBTC Coin (WBTC), Yearn.finance (YFI) and Ox Coin (ZRX).
Please note: Each asset has a different collateral requirement. This is because of the differences in price volatility. Stablecoins naturally give loan-to-value ratios, due to their price stability. A full breakdown of Aaveās grading process can be found in their Risk Framework.
Alongside these tokens, there is also a native token that Aave uses and which is called Lend. An explanation and analysis of the token can be found below.
LEND ($LEND) Token
Often referred too as ETHLend, the LEND cryptocurrency token has rolled over to become the native token of Aave following the winding-up of operations by ETHLend in January this year. Although it has kept the name, the new Aave version of Lend is largely different from the previous one.
Built based on the ERC-20 standard, $LEND tokens can be used for fee reductions. The tokens are burnt from the fees collected from the Aave Protocol, with around 80% of platform fees used. This appears to suggest that Lend tokens will be worth more over time. LEND owners can also claim on protocol fees in exchange for acting as the first line of defense in the case of liquidity events by malicious borrowers.
In addition, $LEND tokens can be used for voting on Aave Improvement Proposals (AIPs). What’s more, LEND holders can vote with their LEND deposited on the Aave platform, even if it is currently being used as collateral. Currently, this feature is pre-launched on the Ropsten test network before it is launched on the Ethereum mainnet. This is so the Aave community can vote on proposals without incurring huge gas costs, try out the module and provide feedback to the Aave team before it is formally launched. It is also worth noting that the outcomes of all votes on the testnet are not considered as valid for the long term.
Voting on Aave
How to lend on Aave
Depositing and earning interest on Aave is a simple process. Before you start, you must visit https://app.aave.com/ and connect using a web 3.0 wallet such as Metamask, Coinbase Wallet or Fortmatic.
Depositing is easy, just simply pick your desired asset in which to invest and then allow Aave access to the asset. Once the transaction is processed, and the interest rate is confirmed you can check the rate changes on the Aave app. The interest-earning tokens are called aTokens which are similar to Compoundās C tokens.
Interest generating tokens
There are some differences between Compoundās tokens and the aToken. The main one being that the aTokenās keep their underlying assets price and will increase the amount of owned tokens when the price goes up rather than increasing the tokens price.
Aave vs Compound ($COMP)
Both Compound Finance and Aave appear to be the two top DeFi lending platforms. However, both have unique features that set them apart. Compound does have USDT as a usable asset, but Aave has a wider range of tokens on offer. For Aave, their new interest rates and regulations, like rate switching gives them a slight edge. For first time users, Aave offers great incentive rates. However, lending rates and Borrow fees are higher on average with Aave. Either way though, Aave has proven a good addition to the Defi community and should prove popular. You can read more about Compound ($COMP) here.
Key features of Aave 2.0
Aave 2.0 was announced on 14th August 2020. Aave Market now offers 19 assets, plus the Uniswap Market offers different Uniswap pairs as collateral. The platform has also grown to over 15,000 users. Here are some of the key new features which can be expected in Phase 2 of Aave.
Pay with collateral
Currently, if users want to repay their loan with part of their collateral they need to do 4 separate transactions on several protocols: withdraw the collateral, buy the cryptocurrency which is borrowed, repay the debt and unlock all the deposited collateral. With this new function, Aave users can deleverage or close their positions by directly paying with collateral in 1 transaction.
Debt tokenization and native credit delegation
Users’ debt positions will be tokens i.e. users will receive tokens which represent their debt. This enables native credit delegation within the Aave Protocol, in addition to other features such as native position management from cold wallets and user-specific yield farming strategies.
Fixed rate deposit
Deposits on Aave can generate predictable interest rates which are not bound by market variations.
Improved Stable Borrow Rate
This will further ensure the predictability of interest rates by locking down their borrow interest rate to a specified time period.
Private markets
Aave will allow governance to open private markets to open private markets to support all types of tokenized assets. The Aave team are also working on a collaboration with RealT which will bring mortgages onto Ethereum.
Improved aTokens
aTokens are Aave’s interest bearing tokens which are minted when a deposit is made and subsequently burned when redeemed. The aToken is pegged 1:1 to the value of the underlying asset deposited with Aave. In Aave 2.0, there will now be a version 2 of the aToken which integrates the EIP 2612 which allows for gasless approvals.
Gas Optimizations
This feature is currently in the works and will lead to a significant drop in transaction costs for most of the interactions on Aave. For some interactions the gas cost may even be reduced by 50%. Aave version 2 will also implement native GasToken Support.
Security
In version 2, the internal design has been made simpler, the architecture is also improved so it is more formal verification friendly. Aave is also working with top auditors such as Consensys Diligence and Certora- a leading company in automatic verification technologies.
Native trading functionalities
Aave v2 will introduce the ability for users to natively trade their debt position from one asset to another, i.e. you can borrow DAI, and if USDC becomes cheaper to borrow, you could change your debt position to USDC in one transaction.
Users can also trade their deposited assets across the various cryptocurrencies supported by Aave, even when it is being used as collateral.
Margin trading is also introduced in version 2, so users can directly take long and short leveraged positions without using third party services. Conversely with margin lending, liquidity providers can increase the weight of their deposits to take opportunities.
Governance
Aave version 2 also introduces several new governance features. Now, AAVE token holders can delegate their voting weight to any other address. Aave believes this may lead to the emergence of Protocol Politicians, who will represent the interests of their peers to delegated their votes to them. But unlike most representative democracies we see around the world today, vote delegation is a liquid democracy so this means a user can instantly remove the delegation in a single transaction if they so wish.
The Aave team also recognises the pain points of the need to move tokens to another location to participate in governance. So Aave now allows users to be able to sign messages from their cold wallet to participate in Aave Governance. This will in turn reduce the security risk.
Decentralised Finance (DeFi) series: tutorials, guides and more
With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces
More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
YAM Finance is a new elastic supply token where the supply of the token expands and contracts in response to the token price – with the ultimate aim of stabilizing to a $1 USD PEG. A 12 hour “Rebase” will increase/decrease the total supply of the token depends on its price. This means that after a rebase, wallets holding YAM will experience changes to the balance even if no YAM is sent out of the wallet. This concept is similar to Ampleforth (AMPL). YAM has gained enormous attention after it’s launch on the 12 of August due to its extremely high Yield Farming (More than 1000% APY) rewards and Meme suitability. On top of this, the elastic supply of YAM means that it catches the attention of those who missed out on the AMPL hype train.
VOLATILITY WARNING: YAM supply is currently VERY as it was only recently launched. Expect circulating supply to increase over the next few days.
What happened to $YAM?
Due to a smart contract bug, the $YAM smart contract is no longer governable and no future modifications can be made. Initially, as part of the experiment, $YAM had a governance feature that allowed the community to vote on new features and add functionality to the contract. However, the bugged smart contract meant it was impossible for the community to reach the quorum necessary to vote new features or fix the bug. This means that $YAM cannot be modified, nor can it be safely placed in Uniswap liquidity pools.
So Final $YAM recap of the day 1) Farmers are fine. No harm was done to value locked. 2) The yield was hit due to $YAM dropping. So farmers probably wasted ~ 24 h of farming potential 3) $YAM will still run like $AMPL. There is no longer any way to alter its code / Governance
YAM is not giving up! The old $YAM will be migrated to a new version of $YAM, which will be a fully audited version of the YAM protocol. Currently, Peckshield Inc has audited the migration contract andĀ reportedĀ it to be a success. Any ālowā or āinformationalā issues which were found during the audit have also been resolved. Yam Finance has deployed the migration contract which enables $YAM holders to migrate to the new version. (https://chacc.co.uk/) Ā ButĀ $YAM holders will only have 72 hours to complete the migration process i.e. until 22nd August 2020 at 4:20pm (UTC).Ā After such time, YAM v1 tokens will no longer be eligible for migration. So pack up your $YAM bags and GET MOVING!
$YAM’s distribution will only be made to Yield farmers – platform participants who stake YFI, LINK, AMPL, COMP, MKR, LEND or $WETH on the platform. This is a more fair method of distribution as there is no pre-sale of the token to early investors. The developers have stated that they were inspired by $YFI to adopt the staking model to distribute YAM.
YAM distribution and Supply
YAM will have a total supply of 5,000,000 Tokens (not counting rebases)
Yam will be distributed to these following staking pools on http://yam.finance: WETH, YFI, MKR, LEND, LINK, SNX, COMP, and ETH/APML Uniswap v2 LP tokens. During the initial launch, 2,000,000 YAMwill be distributed to the staking pools (250,000 per pool). There will be a second distribution “Wave-2” that will be distributed to the Uniswap pool with 1.5 Million per week and decreasing by 50% each week after.
Yam distribution over time
Smart Contract Audits
YAM has not undergone any smart contract audits. You can view the Yam’s source code on Github or on the submitted contracts to Etherscan. YAM is compiled using truffle, and the engineers at truffle are also conducting their own tests on the code. The staking contracts have been adapted from Synthetix – similar to those deployed by YFI with some changes to Starttime() and other variables. The token contract is based on COMP and Ampleforth – meaning it’s a non-standard contract which could present problems if placed in liquidity pools.
TLDR The contract is largely based on the original Synthetix rewards contract developed by @k06a, which is battle tested and widely used in the industry.Changes are minimal and mostly related to config parameters.Below a description of all the differences, https://t.co/xxhGqvzPwX
Notable members of the Crypto community have come out to call Yam a scam or ‘transparent pump and dump’. The of the reasons why it’s accused of this is because questions into the long term use case of $YAM. YAM is launched as a zero value token, meaning that there is no inherent value other than speculation. Long term use case of $YAM as a synthetic asset is also untested, as it’s not truly a stable coin. Both YAM and AMPL attempts to stabilize price by changing its supply – a feature that inconveniences users as their wallet balance would change over time. Whether or not YAM is a scam or not can only be proven over time.
Farming Tools and Profitability
Currently, the best tool for YAM farming is Yieldfarming.info developed by @weeb_mcgee. Currently the panels are hidden so you can only access it via this hidden URL https://yieldfarming.info/yam/yfi/.
Iāll keep this weekās newsletter short and sweet. Primary markets (BTC, ETC) have been relatively stable, which an overall trend of recovery after last weekās flash crash on the 2nd of Aug. The crash was primarily targeted at leveraged traders, with over $1 Billion USD worth of contracts being liquidated across multiple exchanges. After this crash, prices quickly recovered nearing previous highs. This goes to show one of the dangers of over-leveraged positions, as there can be sudden volatility in either direction causing positions to be liquidated.
Yield farming is HOT, but farmers Beware!
Personally, Iāve been yield farming quite a lot this week with generally favorable results. Please note that Yield Farming is EXTREMELY dangerous as it involves the use of potentially unverified audited code on smart contracts. Do Your Own Research (honestly this is whatās taking up most of my time)
Starting off, Yearn’s developer Andre Cronje (check this interview summary) launched Yvaults 2. Simply funds saved there will automatically be invested into the best strategy possible to generate more profit. The new system allows for the addition of new strategies too ā basically what the founder Andre sees fit. Annual returns can vary ā weāve seen numbers between 50% and 200% APY. However, there isnāt a good way to calculate for the time being.
One of the biggest trends this week is the emergence of $YFI clones. $YFI farming was extremely popular 2 weeks ago as it has extremely high yields. However ā this has since paused as there is no new distribution of $YFI. Many opportunistic developers sought to create forks for $YFI that would distribute new coins such as $YFII, $YFFI, $YFT, and $WIFEY (just to name a few) in a similar fashion. One of the biggest risks with these $YFI clones is that the use un-audited code – so they are extremely vulnerable to smart contract bugs (such as this one https://twitter.com/oli_vdb/status/1290370855709573122 ).
BEWARE: $ASUKA & YYFI exit scams
Two infamous projects pulled of exit scams in the past month, with developers minting a huge number of tokens and trading it into DAI. Both $ASUKA and $YYFI preyed on farmers who added liquidity to balancer pools that are required to farm the tokens. These pools are dangerous because the funds are directly used as a counter-party to trades, meaning that the poolās DAI will directly be used to buy up the corresponding token. The $YFFI developer minted 1,000,000 $YFFI and sold it immediately, making off with $70,000 in the process (could have been more if he understood how balancer works).
For the time being, Iām staying away from any yield farming involves liquidity pools.
CREAM
This week Iām testing out CREAM mining. CREAM is a project inspired by Compound and they are offering airdrops of CREAM token to those supply / borrowing from the protocol. Currently, the projectās code is up on GitHub but is pending formal audits. This means there will be potential smart contract risks with farming here.
