As a follow up to my previous article, where Yield stood out as a hugely exciting opportunity in the DeFi Lending arena, it clearly makes sense to take a further look under the hood of this soon to be released gem.
With mainnet launch just weeks away and early adopters tending their yield in ‘the garden’, hodlers are excited to see two years of painstaking and diligent work come to light for their superstar developer Coiner_.
So where did Yield come from? Who planted the seed, and who watered the crops ready for the January harvest?
The journey starts back in 2018, out of the ashes of Elixir. Known as Elix, it was a promising project initially based on p2p lending based on proof of time. It had a strong following of enthusiastic and clever early adopters. However the lead dev decided to pivot the project towards crowd funding. For many this was a bad decision. Although the project progressed the lead dev David Jackson made the decision that the project didn’t have the funds to continue development and wound the project down.
Disappointment, frustration and anger turned into hope, belief and optimism. Led by Coiner_ the Yield project rose from the ashes, bringing with it a hard core of believers in both the endeavour and hard work of Coiner_, and the long held belief that a DeFi p2p lending platform that could run itself, and vastly improve on the front runners in the space, was badly needed. Here we are today two years later on the cusp of the mainnet launch. This is exactly the type of project that truly encompasses the original crypto ethos. A groundswell of outsiders determined to show that with a good idea, robot-like skill and talent, aligned with dogged determination, and the boundless enthusiasm of enough core supporters – Coiner_’s ‘Strattonite Warriors’ ;) – could combine to create ground breaking real world change.
Fast forward to Yield’s recent history, starting with an airdrop for early adopters. The first airdrop of 200 YLD was for the engaged community with additional higher levels for original testers of the beta platform and those that helped get the platform rolling. A second airdrop was completed and split in three sections, 25k airdropped to the top 100 wallet holders and 25k airdropped to the top 100 liquidity providers of each of the two YLD pairings – ETH & RFI. Then finally holders could add liquidity to ‘The Garden’ where holders stake their YLD and RFI or ETH for further rewards.
With that potted history under your belt, let’s move to some of the detail in Yield. What are the benefits of the platform. Why do these pioneers of the platform and the token feel so bullish on the future. Here are the key bullet points for Yield.
The ability to choose preferred rate, loan term, collateral offers unprecedented flexibility for lenders & borrowers.
Guaranteed Interest rate
Critically the lender has certainty of return over the term of loan, rather than the being diluted by whale lenders diving into the pool.
- min interest: 2%
- max interest: 12.5%
- min principal: $250
- max principal: $50K
- max reward: 350 YLD
- min initial collateral requirement: 125% for stablecoins, 135% for Eth, 150% for the rest
Borrowers earn YLD for repaying loans.
Incentivising borrowers, financially rewarded for stewarding their loans successfully, will bring both sides to the platform. Rewards will be determined by market price of YLD. YLD reward = (Interest - 1)/100 x Principal
In addition to only limiting the rewards to the borrower, there will be a 12.5% max interest limit and $50K max principal limit. This is important because the reward is dependent on those 2 variables. The minimum loan duration is also, currently, 8 days. While you can repay a loan at any time, if you repay unnaturally fast, it'll take well over a month to mine the full reward. Regardless of when you pay back your loan, the full reward mines over a certain duration, which will be at least a week on mainnet. If the full duration doesn't elapse then when you go to claim the reward, you won't get the full allocation.
100% of fees used to burn YLD
Yield has innovative tokenomics to support the YLD token value. 100% of fees is used to burn YLD, and at a rate that is more aggressive than most, if not all, other implementations. As a quick comparison using the figures from Aavewatch, there is currently $12.9M sloshing around in the protocol but only $10.7K has been generated for burning. The same amount in Yield would result in no less than $128.7K for burning.
Extensive collateral options
Yield will have the most options available to use as collateral. With its partnership with Chainlink utilising their oracles, giving solid pricing for all assets.
Market cap $4.3m
Circ supply 289k
Take note of these metrics. Remember Compound’s market cap is over $700m and has a circulating supply of over 4m!!! Just soak that up for a moment and then look at Yield. Mmm, tasty.
There you have it. Yield is ready to take the Defi Lending market by storm. 2021 is going to be a very interesting year.