Yieldly is one of the most popular DeFi apps available on the Algorand ecosystem. Yieldly.finance offers a fresh take on the future of decentralized finance wrapped up in an inflatable flamingo. In this article FR4X takes a look at the features and benefits of the Yieldly platform and YLDY token.
Yieldly arrived on the scene in late 2020 and its product launched in June 2021. The company debuted out of the Algorand Asia Accelerator and is run by a competent team of blockchain and technology veterans. The firm is also backed by a plethora of well known venture capital firms including Borderless Capital, LongHash Capital and CMS Holdings, with additional support from NGC Fund, Kosmos Capital, LD Capital, YBB Foundation, OKEx Blockdream Ventures, Kyros Ventures, Mozaik Capital, Kernel Ventures, GTA Ventures and IBMR.io to name a few.
Built on Algorand
As a first mover in the Algorand DeFi space Yieldly set out to build and accelerate the decentralized finance ecosystem on Algorand. Yieldly capitalizes on the numerous advantages the innovative protocol provides including its low fees and efficient design. Yieldly is committed to sustainability and benefits from being built on one of the only carbon neutral blockchains.
Algorand's L1 network addresses key issues that hinder present DeFi adoption. In critical areas such as performance and scalability, todays DeFi apps can struggle with network congestion issues and unpredictable prohibitively expensive transaction fees. This in turn creates high barriers to entry and adoption. On Algorand transactions execute in 4.5 seconds with a fixed low fee rate of .001 Algo per transaction (about less than one tenth of a cent).
No Loss Lottery
The first version of Yieldly's product offering debuted as a weekly prize game. Initially billed as a “no loss lottery” users can stake their Algo coins on Yieldly which in turn grants you an equal number of tickets for a chance to win a weekly prize of a large windfall of Algo. It’s a no loss system as you keep your tickets whether you win or lose. All the while, your staked Algo accumulates rewards and automatically gets entered into the next week’s prize drawing.
While your tickets are active, Yieldly pays out daily rewards for staking in its own YLDY token. Participants can unstake and claim back their Algo and YLDY at any time with a simple .001 Algo transaction.
Algo staked on Yieldly earns YLDY tokens and once claimed you can take those same YLDY tokens and stake them on the Yieldly platform for even more high interest returns. The YLDY staking pool is another avenue to earn passive income on the platform as the token also provides reward returns in both YLDY and Algo.
When it debuted in June 2021, Yieldly offered apy returns well over 100% but as early rewards have been dispersed and with more users participating, rewards still sit at a very juicy 40% apy simply for parking your YLDY in the pool.
How It Works
Yieldly quickly locked up over $10 million USD in value in its first week and its TVL, or total amount deposited, has been climbing on a steady clip since. The first week's prize was around 6000 Algo, last week’s August 26th prize amount came in at 32,000 Algo. 41 million total Algo have been staked in to date. Yieldly’s CEO Seb Quinn has projected that they expect to reach a 1 million Algo weekly prize award sometime next year.
The system works by taking the Algo rewards that are normally generated by staked Algo in the system and then awards that lump sum to the randomly selected winner. (Fun fact, simply HODLing Algo earns hodlers about a ~5.5% apy in most wallets paid out by the second) Users that stake their hard earned Algo’s through Yieldly will now instead generate rewards that are paid out daily in YLDY tokens. At the time of writing the apy is around 20%, with Yieldly presently offering roughly double the standard Algo rewards at its current market price.
Before it was launched, Yiedly’s platform and smart contracts were audited by award winning cybersecurity firm Halborn. In their report, the team acknowledged that the platform utilizes the “best possible practices” for securing their smart contract ecosystem. Yiedly’s prize games and staking pool contracts were put to the test and passed most triumphantly.
ETH, BNB, MATIC Bridges
Early on the team at Yieldly realized the platform would stand to benefit from increased exposure, capital and participants by creating cross links with other blockchains. With this in mind they first debuted a bridge to the Ethereum blockchain. With this product users can take advantage of the ability to move and transfer digital capital via a bridge which utilizes the YLDY token. ETH users can purchase and swap YLDY on Uniswap and other decentralized exchanges and can convert ERC-20 wrapped YLDY to its native ASA YLDY format and vice versa.
Similar bridges are in the works for the Binance and Polygon network blockchains. Through the YLDY token users can take advantage of cross chain swapping and staking across Algorand Standard Assets (ASA), ERC and BEP2-based DeFi protocols.
Yieldly recently provided the community with an updated roadmap of their future plans. Next up the company plans to incorporate exclusive NFT prizes into the prize games and is looking at moving to a new multi winner game instead of the current winner take all format. On deck in Q3 is a number of iterative improvements including TEAL 4 support and automatic staking and partner ASA staking pools where you could stake YLDY and earn other tokens in the Algorand ecosystem. Q4 promises even more system improvements to the prize games, auto-compounding pools and the debut of the Binance BNB and Polygon MATIC bridges. Looking further ahead to 2022, Yiedly plans to add the ability to purchase and swap Algo on the platform and they are building out an automated market making product which could feature Uniswap like functionality to exchange and trade tokens.
How to Buy YLDY
There are currently two exchanges where you can purchase and trade the Yieldly YLDY token. Uniswap is the first and it should be noted that this is primarily meant for Ethereum network users. In order to stake any YLDY purchased on Uniswap a conversion step via the bridge is required with the requisite ETH gas fees.
YLDY can also be purchased from the MEXC exchange and this is a far more straightforward process recommended for most Algo users. On MEXC users can transfer crypto or sell Algo for USDT and then use USDT to purchase YLDY directly.
As MEXC sells the native ASA version of YLDY, you can then withdraw this same YLDY and transfer it to your Algo wallet. Take that same YLDY and stake it on Yieldly to earn more sweet YLDY to compound with their generous staking rewards system.
There is no time like the present to learn crypto and DeFi. For folks that take the time to explore, the journey can be fruitful. The Algorand blockchain has the proven speed and security to power the next generation of accessible, fast and low fee DeFi platforms that other chains are beginning to struggle with. Yieldly and its flock of flamingos are leading the way on this promise to make it easy for anyone to access Algorand and experience the benefits of DeFi.