A brief report on the YFValue protocol, its background/history, value and mission, audit status, yield farming pools, and the YFV token.
Yield farming and liquidity mining projects have been the new DeFi craze lately, especially aggregators. The popularity of yield farming aggregators arises from the fact that they automatically switch users’ funds among the best sources of generating income. The first project to kickstart this chain reaction was yearn.finance (YFI).
YFValue Protocol is a fork of yearn.finance. It was born out of the idea that the DeFi playing field wasn’t so level. The unique design allows even small to average users to participate, which makes it quite a big deal.
As of September 5, the platform has a total value locked worth over $329 million.
Table of Contents
Background And History
It’s becoming a common practice in the open-source world of DeFi to launch projects without disclosing team members or reserving shares for them. The YFValue protocol is no exception.
YFValue was launched anonymously and fairly, meaning the team also didn’t start farming earlier than everyone else. It was announced in a Medium post titled “YFV: Bring True Value to Yield Farming” on Aug 16. The project was launched sometime after that.
Simply put, YFValue Protocol is a yield aggregator, which allows users to turn their latent assets to productive ones. It’s particular selling point is the fairness of participation. It allows equal opportunity to big and small players.
The YFValue Protocol ensures that by employing two mechanisms. 1. Determination of the inflation rate of the governance token through voting 2. A referral system with on-chain automatic burning.
It deploys different strategies to give users the best yield. The protocol is controlled by a Decentralized Autonomous Organization (DAO). The governance token is YFV.
YFValue Vision and Mission
The team has defined the vision of YFValue as “To bring fairness, true value, and innovation to yield farming”. The four mission principles are accessibility, governance, profitability and insurance.
YFValue’s emission schedule is designed for a longer period of time, so YFV token can reach the broader community employing multiple strategies to earn it. Its interface is designed for ease of use and contains detailed instructions. Furthermore, YFV focuses on accessibility and user experience.
The on-chain governance is flexible and effective. It encourages community participation by introducing transparent no-cost voting. The vote payment is carried out through vETH and vUSD and paid through a common fund.
The YFValue protocol focuses on small-cap tokens so that small capital owners with lesser-known assets can take part in yield farming. In addition, the protocol uses flexible and optimized strategies for profit maximization.
The project was developed without any payment given to the team, with the parameters and execution decided by the community. The platform also provides an optimized aggregator to ensure the best pricing and liquidity for trading the native YFV token. Furthermore, profits generated in the platform are distributed to YFV holders.
Owing to the smart contract risks and exploitation incidents in the past, an insurance treasury is used via YFV team contributions and community funds. It will be used to provide insurance cover through Nexus Mutual to mitigate risk, in the event that the gets hacked or exploited.
Unlike many DeFi projects, YFValue underwent a formal audit done by the Arcadia group. The audit found no high or critical severity issues, but minor code quality and health issues. And these shortcomings have been fixed since then, according to the team.
YFValue Protocol : Pools
YFValue allows direct deposits and staking of stablecoins, for the first time ever in a yield farming pool. It also allows minting of two elastic supply coins vUSD and vETH, which rebase to USD and Ethereum prices, similar to the Ampleforth.
- Pool 0 aka Seed pool: staking Stable-coins (USDT, USDC, TUSD, DAI) emitting 3% of the total YFV supply.
- BAL Pool: staking BAL/YFV (98/2 ratio) emitting 3% of the total YFV supply .
- YFI Pool: staking YFI/YFV (98/2 ratio) emitting 3% of the total YFV supply.
- BAT Pool: staking BAT/YFV (98/2 ratio) emitting 4% of the total YFV supply.
- REN Pool: staking REN/YFV (98/2 ratio) emitting 4% of the total YFV supply.
- KNC Pool: staking KNC/YFV (98/2 ratio) emitting 6% of the total YFV supply.
- REN-BTC Pool: staking RenBTC/wBTC/YFV (49/49/2 ratio) emitting 10% of the total YFV supply.
- ETH Pool: staking WETH/YFV (98/2 ratio) emitting 10% of the total YFV supply..
- LINK Pool: staking LINK/YFV (98/2 ratio) emitting 10% of the total YFV supply.
- UNIv2 Pool (to be voted): staking yCRV/YFV (50/50) emitting 25% of the total YFV supply.
- YFV Pool: staking YFV emitting 15% of the total YFV supply.
YFV Governance Token
The governance token for YFValue protocol is YFV. It has a total supply of 21M. It’s based on the popular and widely used Ethereum based ERC-20 token standard. The emission is variable and yield pool dependent.
YFV token is used for making governance decisions, expressed by the holders thorough voting. Generally, these include voting on strategies and their parameters, token emission schedules, reward distribution, etc.
vUSD and vETH
vUSD and vETH tokens are rewarded to users who stake YFV. An exact amount of 1 million vETH and 1 million vUSD will be distributed to all yield farming pools based on their percentages.
Once the YFV of all pools are used up, vETH and vUSD will utilize an oracle price feed to match USD and ETH based on their prices. The protocol will also use a rebase mechanism of vUSD and vETH every day, similar to how the Ampleforth system works.
General DeFi Fair Disclosure And Risk Warning
No human endeavor is without risk and DeFi is no different. All users should note that interacting and depositing funds into smart contracts for any purposes carry risk, due to the complexity and dependency on multiple interlinked components outside a single project’s control.
A failure in one component can lead to an avalanche, risking all others attached to it. Please invest only what you can afford to lose, owing to the risks involved and the known volatility of crypto-assets. Consider risk tolerance and practice risk management, before investing.
Lately, the DeFi has been the playground of large capital holders or the so called whales. It is in part due to the high entry requirements, thus stopping average retail investors from participating in the lucrative market.
YFValue is aiming to change that through the allowance of direct stablecoin deposits, no cost voting, referral system, on-chain automatic burning, low cap assets usage and a varied inflation rate.