HyperPay Focus — DeFi Specials
Investment, regardless of DeFi or CeFi , is a game theory of risks and returns.
The 5th DeFi Session of HyperPay Focus was hosted on 4pm, Sept.18th, 2020 (UTC+8), in which David, Community Volunteer of YFII and starter of YIP-8 was invited to share “YFII Uniqueness Lies in Imitation or Innovation?”.
The following is about the recap of AMA:
Q1. In the current DeFi market, many infantile DeFi tokens have their yields plummeting just in a blink of an eye. What is the reason do you think?
David: In my opinion, liquidity mining is a marketing method adopted when new projects are cold-started, and it is a growth hacking technology specially tailored for DeFi projects.
Similar to Airdrop or Lockdrop, it dilutes the rights of the project development team to attract community users and initialize a reasonably distributed network of coin holders.
The sustainability of Yield Farming depends on whether the long-term value brought by the business can cover mining costs. If the project has no product, community, or technical support, then it is meaningless to distribute tokens only through yield farming.
Q2. Many people in the market believe that YFII is forked from YFI and that’s it, so they are not optimistic about it. However, the increasing price of YFII has proved that it is recognized by the market to a considerable extent. Can you share with us what is YFII’s own unique development ideas to cater to the demands of the market?
David: YFII is the same as YFI. The communities behind it all agree with Andre’s yearn product philosophy, but the difference is in token distribution governance. YFII is supported by the top domestic blockchain entrepreneurs and developer communities, and the initial token distribution adopts a fair and impartial strategy, which makes the initial developer participation level to be high to be able to ensure the sustainability of subsequent development.
YFII is aimed to serve the public DeFi investments and provide new users with one-click deposit channel to the best investment products. So far, the smart pool has been launched in just one month and has created more than 20 million US dollars in value for users. It saves gas fees, avoids contract loopholes, and lowers the DeFi entry threshold.
Q3. The latest smart pool of YFII has released iToken. How does it work?
David: After deposit USDC/USDT/DAI/yCRV/ETH or other coins in the YFII smart pool, you can obtain iToken. For example, you deposit USDC, you can obtain iUSDC.
iToken can be seen as the equity Token of the YFII smart pool, representing your equity share in the smart pool. Taking USDC as an example, you can get slightly less than 1000 iUSDC by depositing 1000 USDC. If the current price is 1 iUSDC = 1.01 USDC, then you can convert 1000/1.01 = 990 iUSDC. If there are 99,000 iUSDCs in the entire smart pool, it means you own 1% of the total USDC in the pool.
YFII smart pool mining is all principal non-destructive, so the return of the target mining pool will automatically be converted to the Token and back to the pool, and the number of iTokens remains unchanged. In this way, the iToken in the pool can be exchanged for more Tokens, resulting in an increase in the price of iToken.
iToken will become the core asset of YFII’s business in the future, used for Lego-style combination with other DeFi projects, and also for YFII circular mining incentives.
Q4. Can you share with us the next direction YFII will focus on?
David: YFII currently has launched the iToken system, and will soon launch the iToken of UNI_LP series to provide income optimization for Uniswap’s LP. Invest in different Sushi projects to get the highest rate of return.
YFII is friendly to assets of wallets, exchanges and asset management, and provides convenient one-click deposit services for traditional funds into DeFi financial management. The short-term goal is to increase the scale of assets management and increase the issuance of iToken.
In the future, there will be an innovative iToken lending business to provide users with more capital leverage to increase mining return.
Q5. Why the liquidity mining returns between YFII and YFI vary a lot with the same underlying. For DAI, YFI’s return is higher than YFII; USDT, YFII higher than YFI?
David: The two have different strategies, different resources, and different costs, leading to different rates of return. YFII focuses on long-term and stable mining projects and insists on the strategy of carrying large amounts of funds
Q6. The subsequent YFIII series has launches, and more liquidity mining pools similar to YFI and YFII have emerged on the market. What’s your opinion?
David: The liquidity mining community takes up the most, and there lacks developers and operational volunteers communities, which makes it difficult for the projects to be sustainable in the long term. At present, only YFI and YFII is backed by strong community resources, so I’m more optimistic about the new projects incubated in these two communities.
That’s all !
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