DeFi Pulse AMA
For those that missed out, yAxis participated in an AMA today hosted by DeFi Pulses’ Jake Lynch.
An hour long grilling! Here’s the full transcript:
Jakelynch Hello everyone and welcome! Today we have an exciting AMA with @Bobby | yAxis Project and MrMister | yAxis Project from yAxis! How are you both doing today?
Bobby Hey Jake! Thanks for having us, pleasure to take part in the AMA
MM Doing fantastic, so stoked to be here!
Jake awesome, good to hear it. Let’s get this started! Our first question is always: can you tell us a little about each of your backgrounds and how you ended up involved with yaxis?
Bobby Sure. I’m a tech startup founder in the space myself, and node validator from the previous cycle. For me, the tech hit me like a lightbulb and I saw so much possibilities — I really got pulled down the rabbit hole!
yAxis was founded just after last Summer when DeFi was gaining attention. I was a first day investor and holder in the platform. After being active in the community, a few months later when the founding team left, I was asked to step in and replace. That’s almost a year ago now!
What is yAxis?
Jake nice to hear about people stepping up like that so, can you give us an overview of what yAxis is?
Bobby Today, the team is 100% community-sourced yAxis is a meta yield aggregator. So it sits on top of the DeFi stack and allows users to deposit and leverage other platforms below. In effect, that allows us to provide a yield portfolio that will ultimately be allocated by the DAO like a traditional fund manager would do.
Today we’ve just announced a launch date for our upcoming v3 which is a significant leap forward for us. The V3 Vaults or Canonical Vaults as we are calling them, represent a significant upgrade to the architecture & they embody the team’s initial vision of creating a meta yield aggregator that is able to deploy multiple assets across multiple projects to reflect a yield portfolio, managed by the DAO.
Until now we have been focussed on USD-based yield, and a large part of the V3 is the ability to support any ERC20 asset. So whilst we are launching with USD, ETH, wBTC and LINK-based vaults, the design allows us to quickly roll out new vaults to support any ERC20 asset we choose.
Jake sounds like v3 is a huge update so we’ve talked a little about the past and the present, let me ask you about the future. What’s the long term vision for yAxis?
Bobby Long-term, our mantra has always been to make DeFi easy and accessible. It’s currently a complex space that only relatively few participate in. Our vision is to act as a bridge between institutional or retail investors that are attracted by the yields on offer in DeFi, but without the time or knowledge to safely chase them.
I think that’s mostly a shared vision with a lot of the teams in DeFi. We have to keep evolving to be more inclusive and draw in capital to the space. Whether that is by offering a mobile-first experience or fiat onboarding etc.
A big part of that will require maturing of the current DAO models and tools needed to be able to operate and sustain a decentralised financial system An example would be digital identity, and the ability for a DAO to conduct business with legal entities.
Jake It’s a complex industry, but it’s definitely a competitive one. Could you talk a little about what you think makes yAxis a compelling project? In other words, what are it’s greatest strengths and how does it stand out from the competition?
Bobby Sure. Firstly, the ability to sit on top of other platforms, like Convex, and plug any yield strategy into a vault to make an effective portfolio for users that is both visible on-chain and managed by the DAO.
Auto-compounding yield and sharing gas fees amongst depositors are important in today’s gas price environment. That being said, we are looking to also launch beyond ETH in the near future.
As I touched on before, our innovation contributed to the space is our vault architecture, which allows us to support any ERC20 asset, and launch a new vault and strategy within a day.
That enables us to now expand and grow the platform very quickly as well as react to industry events. The YAXIS token is our governance token. We did a token swap from the old YAX, to an ERC-677 token.
Users can earn YAXIS, on top of the strategy yield, by depositing in the vaults. With v3, holders can now lock in YAXIS for a period of time, in order to receive veYAXIS. The longer you lock, the more veYAXIS you receive. veYAXIS earns a share of the platform fees, and allows a vote to skew/distribute rewards towards your vault of choice.
Then finally security is another advantage and something we take seriously having recently swallowed a large delay to tighten up the platform. After a thorough audit, we moved away from a design that allowed a range of similar tokens in a vault. E.g DAI and USDC. Instead allowing the strategy token itself to be deposited, removing attack vectors.
Many DeFi platforms are skating along and hoping no one picks on them. We’ve tried to proactively prevent that and be responsible, which is often the hardest option in a progress-driven space.
Jake Ok so let’s talk about some mechanics. How do yAxis vaults work?
Bobby Awesome. So with the v3 protocol upgrade we have fundamentally changed the way yAxis users generate yield. A key component of this is the introduction of mechanisms that personalise APR and “Boost” your YAXIS rewards.
By locking YAXIS, users are able to increase the YAXIS rewards they receive through that ‘Boost’ multiplier. So each vault has a yield farming strategy, but then separately a min/max amount of YAXIS rewards on top. Your personal boost multiplier dictates where in that min/max range you earn.
At launch, we’re leveraging Convex as a popular platform with >$15B TVL and building vaults on top of those pools. The vaults are acting like an ‘auto-compounder for Convex which holds a lot of potential TVL for us.
It can cost as much as $1000 to compound yield, which is prohibitive for most users to do regularly. We see that as a compelling reason to still deposit and farm with your favourite Convex pool, but through yAxis.
Our vault rewards use the familiar gauge system, based on Curve. That’s the most significant new feature. It’s a rework of the tokenomics, and encourages users to lock in a portion of their farmed rewards. As the tokenomics play out, it becomes a tug of war between vaults to distribute more rewards towards themselves.
It’s this competitive element at a high level, as well as the ‘Boost’ multiplier on a personal level, that establishes real value in locking in rewards rather than selling.
Jake So you’ve mentioned a few of them already, but maybe you could put it into one message so that it’s easier for people to see: What are the new features of v3 that people should know about?
Bobby Vaults that support ETH, LINK and BTC (with more to come). Locking system. Convex-based strategies. Gauge tokenomics. Dark mode. Multi-language support.
Jake You mentioned that the new token is built using the ERC 677 standard. Can you talk a little about what that is and why you’ve opted for that over a traditional erc20?
Bobby Yeah. The ERC677 standard is an evolution of ERC20. It’s backwards compatible and only offers advantages. The primary one being the ‘transferAndCall’ function. This allows users to be able to approve and stake in the same transaction, saving on gas.
Everyone should be moving to the ERC677 standard, I think today it’s just us and Varen (LinkSwap), that use it in DeFi.
Jake makes a lot of sense, sure we’ll see a lot of that in the future then You also briefly mentioned a little about the emphasis on security. Given the history of exploits and hacks in the industry, can you talk about how you’re approaching security?
Bobby Absolutely, it’s been a major focus. And we’ve all been there laying in bed at night wondering if our crypto savings will still be there in the morning. It’s very important for the space as a whole.
Our team employed a staggered-multifaceted audit approach for V3, whereby we combined the community-driven competitive smart contract style of audit run by (Code 423n4) with that of a more conventional audit from top tier auditors Haechi.
As I mentioned earlier, we took a large delay from the results of the C4 audit findings. And that’s a difficult decision to make, but ultimately for the best. Particularly the C4 model over traditional security firms I think are the future. And that’s down to the incentives used.
Traditional security firms are currently inundated with demand, and so they assign e.g 1 engineer per project to churn out certificates without any need or responsibility to find potential issues. They are paid regardless of output.
Conversely, the competitive model of C4, means auditors are only incentivised to discover, not produce a certificate for their client. The more they find, the more they earn.
So our traditional audit didn’t find much, but the C4 audit uncovered lots of stuff to address. This competitive and leader board element brings many eyes on to the code, benefiting projects from a wider range of expertise.
Jake I think that’s a difficult decision to make but always the right decision to make. A lot of the time this industry is overly focused on speed, but it sounds like your focus is on quality.
So I’ve got one more question before we move onto some posted by the community We talked about the vision, but let’s talk about some more tangible milestones. What does the roadmap look like?
Bobby Nice, our roadmap is pretty full for the near-medium term. Off the top of my head we have: — Olympus Pro POL (Protocol Owned Liquidity) — Borrow/Lending feature — In audit — Deployments to other chains — Expanding the vaults, and assets supported — DAO transition
After the long development cycle, we’re now looking to quickly add value by bolting on other features that work nicely with our main product.
The borrow/lending feature is one of those, based on an Alchemix fork with some key changes made to it. That’s just finished an audit with C4, and the UI will go into development straight after V3 is shipped.
Jake Nice! Now let’s address some of the community questions:
Why Convex and Alchemix?
What was the driver behind looking at Convex and Alchemix as projects to integrate in yAxis v3?
Bobby So there’s many lending platforms out there already. We chose Alchemix because it meshes with our mantra of making DeFi easy. A self-repaying loan, with no liquidations to keep you up worrying at night.
Convex and Curve have captured a majority of the ETH liquidity, and you have to go where the liquidity is and join the DeFi governance token wars
Jake for sure How are you going to maintain token value, given the amount of inflation of yAxis token supply that will be created by staking rewards?
Bobby Good question. Emitting tons of tokens only works for a while before it starts cannibalising token price. The revised tokenomics we are implementing are based on the Curve gauge system and have proved themselves successful. That’s what is driving the CVX/CRV wars today.
We’ve taken the concept and applied it to vaults, rather than LP pools. If we can add on extra revenue sources, such as through the Borrow/lending feature, and feed that into locked YAXIS, veYAXIS — then that creates tangible monetary value in holding these tokens rather than selling.
Jake Can you talk a little bit about the lend borrow feature plans as well as a potential yAxis stablecoin that was talked about a few weeks back?
Bobby Sure. The lending feature is typical of many. It’s a CDP, a collateralised loan. So a user will deposit an interest-bearing collateral and then be able to borrow a stablecoin off that.
The interest-bearing token could be mimCrv or another LP token, and the advantage of that is it allows us to offer high LTV ratios to users which make the loan much more attractive.
So as part of the feature, we will also be rolling out a yAxis stablecoin, which is primarily acting as a gateway to use the loan elsewhere. The loans pay themselves off over time.
The collateral is deposited behind the scenes into the yAxis vaults, and the yield generated pays down the debt without the user needing to do anything. These loans can be used in many ways e.g to do leveraged yield farming, by re-depositing those borrowed tokens back into a vault — or can be cashed out to buy e.g a car.
Jake Awesome, seems like a super exciting org for people to be a part of and its obvious that the community is really awesome. So now that we’re at the top of the hour: How can people get involved with yAxis and is there anything else you’d like to share?
Bobby Yeah we’ve put a lot of time into cultivating our amazing community, and very appreciative of their support. If you want to get involved, hop into our Discord server (MrMister can share that link please), or shoot one of us a DM. Otherwise we’ll see you on Sunday evening for the exciting launch of V3!
Mm And here are some links for convenience