"The Monolith" by Rachel Phot

WTF is yyAVAX??


A Novel Liquid Staking Option for the Avalanche Ecosystem

Sightings of a new liquid staking asset have been reported in the Avalanche Galaxy, and it appears to have landed on Yield Yak, a Planet known for yield-farming optimization. This asset, known as the yyAVAX token, was born from a partnership between Geode Finance, Yield Yak, and Eden Network. yyAVAX is also the first example of Geode’s liquid staking architecture being deployed within another DAO. 

How does yyAVAX bring value to the Avalanche Galaxy, and to the AVAX holders within it? Why would investors choose to hold yyAVAX and what value does yyAVAX offer over simply storing the native AVAX token in your wallet? Read on to learn more!

 

Why All the Comotion?

Holding vanilla AVAX provides numerous opportunities within the Avalanche ecosystem and DeFi, however, it doesn’t generate yield on its own. By holding a liquid staking derivative like yyAVAX, you’re able to use this token within Defi, as you would with regular AVAX, but it's passively earning you ~7% APY! This increases the capital efficiency of your AVAX and removes the black-and-white choice of securing the network or participating in Defi for yields, with liquid staking derivatives you can do both. 

 

Now, for the first time, Geode is giving any project the ability to provide their users with their own liquid staking derivative. By offering DAOs their own staking solution, Geode allows them to capture all of the value that comes with offering such a product to their users, without the middleman:

  • Sustainable revenue from staking fees
  • Increased TVL (Funds deposited become the DAOs TVL)

 

What is yyAVAX? 

The yyAVAX token is Yield Yak’s liquid staking derivative. It represents AVAX staked or delegated to validators, earning yield, and securing the Avalanche Network. The yyAVAX token is inherently yield generating, with the price of yyAVAX appreciating against AVAX over time to allow its holders to easily crystallize its yield.

To acquire yyAVAX, you will need to deposit AVAX into Yield Yak’s liquid staking solution.

The yyAVAX token offers its users the ability to exit back to vanilla AVAX without any lock-up or waiting period. This is a new concept, never done before on Avalanche, with other liquid staking providers having to rely on third-party liquidity pools or offering a ~ 14-day withdrawal period to swap back to AVAX.

But how does Geode safely and effectively accomplish this? Through a mechanic they refer to as “Dynamic Withdrawals”, a stable swap liquidity pool that provides a very low slippage swap functionality with built-in peg protection incentives that generate additional yields for yyAVAX holders!

 

Enabling Elevated Yield Generation

While Yield Yak serves as a Planet in Geode’s liquid staking Universe, Eden Network serves another crucial role as node operator, providing additional layers of APR for the yyAVAX token from vanilla staking rewards, additional rewards through the validation of subnets along with other yield optimizing strategies.

By having the ability to choose its own node operator, Yield Yak is able to provide yyAVAX holders with more yield than is normally expected from a liquid staking derivative. They collectively accomplished this by leveraging Eden Network’s expertise to create what has the potential to be the best yield-generating liquid staking token on the Avalanche Network.

 

Avalanche Network Benefit

It’s important to remember that the Avalanche Network is still in its infancy when it comes to liquid staking. In fact, only a handful of other protocols offer liquid staking on Avalanche at this point in time.

By allowing any DAO to offer their own liquid staking solution to their users, not only do they provide Avalanche users with more choices, they encourage more users to take part in validating the Avalanche Network. Geode Finance also diversifies the validator set as DAOs choose who they wish to use for their node operation services.

 

Until Next Time

The crypto world is an ever-changing ecosystem. A living, breathing beast. A force to be reckoned with. And best of all, a rich environment with boundless opportunities. Keep yourself in the know and stay up to date on the latest in Crypto and DeFi. How? By following us of course!

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Until next time,
   - the SkyHigh DeFi team -

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SkyHigh DeFi

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