The Weekly Yax #7: Business Model Resiliency

The Weekly Yax is the easiest way to keep up with the yAxis Project.

Every Sunday, we highlight major news and developments, alongside key takeaways from the week’s episode of Ya Herd?

Major News & Developments

Ya Herd? Week #7 Key Takeaways

  1. Secular Trends & the Hunt for Yield: The broader macro environment is starved for yield. As shown in the graphic below, the yield on the 2-Year US Treasury has been in secular decline for decades, now yielding just 0.15%. The German 2-Year Bund is even worse at -0.68%, part of the roughly $18 trillion in negative yielding debt globally. Institutional capital, family offices, and pensions are salivating at DeFi yields, which despite the composite stablecoin rate index making a new yearly low to 3.5% (source: Skew), that’s still over 20 times better than the 2-Year Treasury. Institutions demoing private pools on Aave and 5.5x YTD growth of the USDC market cap are anecdotal evidence that these traditional market participants are beginning to wade into DeFi via stablecoins. yAxis is positioning itself to be on the receiving end of these capital flows, offering attractive, “set and forget” yields with cutting edge security.

2. Market Cooldown Scenario: While an extended market cooldown presents some challenges, such as yield compression, from an operational perspective, there are some advantages for yAxis. For instance, yAxis could have an easier time onboarding development resources to write yield farming strategies as other projects born in speculative mania fizzle out and developers look to re-position to a project with a sustainable, long-term vision like yAxis. In addition, v3 Canonical Vaults will support assets with evangelical holder bases (BTC | ETH | LINK). For market participants who plan to hold regardless of short-term market conditions, yAxis presents an attractive opportunity to park their assets and earn yield. For market participants who retreat to the safety of stablecoins, yAxis’s stablecoin vault offers a convenient solution, reflecting yAxis’s ability to attract TVL and generate revenue from a variety of market participants, even during an extended market pullback.

3. Raging Bull Market Scenario: If the current bull market rages on, yields should rise across the entire DeFi space, allowing yAxis to farm higher base yields and support more TVL. This scenario would also likely accelerate the existing flow of traditional finance capital into DeFi, increasing yAxis’s exposure and access to large pools of capital. Furthermore, if YAXIS appreciates, YAXIS rewards increase in value, enabling the vaults to onboard more capital and generate more revenue, conveying the reflexivity inherent to the design of yAxis.

4. Strategic Vision & Value Proposition: The cornerstone of the yAxis value proposition is security. With the launch of v3 in Era 2 and its associated buildout of advanced security features, yAxis can more aggressively market to institutional capital. The current MetaVault, created by transferAndCall, our security-focused lead developer, is double audited and does not allow smart contract interactions, thereby not exposed to flash loan risk. Additional planned security features for v3 (in-house insurance and AMAR — automated monitoring and response) and automation with Chainlink’s keepers only strengthen this value proposition. Reducing the probability of principal loss, a major concern of traditional market participants, improves return profile (EV) significantly. This edge in risk-adjusted return positions yAxis as to be a leader as the DeFi market matures. Concurrently with efforts to attract institutional capital, yAxis plans to launch on a scaling solution in later eras following the v3 launch, which will position the project to increase access to the everyday investor, furthering its core mission of making DeFi easy and accessible.

5. Marketing v3 Canonical Vaults & Community Involvement: yAxis recently received feedback from a large fund complimenting its marketing efforts, validating its current multi-faceted approach highlighted in last week’s Weekly Yax. Moving forward, the Project will continue to bolster and refine its marketing strategy to communicate the revolutionary nature of the Canonical Vaults. The marketing ramp toward v3 will heighten over the coming weeks. The Project welcomes support from the community by leveraging their existing DeFi ecosystem network to recruit TVL, facilitate partnerships, and propose treasury deposits in other projects’ governance forums. We’re all in this together, Herd!

The full recording of this week’s episode can be found here.

yAxis Project Stats of the Week

  1. MetaVault TVL $61.3 million, earning 33% APY.

Community Content Spotlight

This week’s community content spotlight goes to martec. Martec is a graphic designer who offered a very detailed review of opportunities for design improvement in the yAxis landing page, app, and other web-based mediums. The design improvements were largely aimed at ensuring consistency throughout yAxis branding and helping to accrue brand trust. Thank you for your time and effort in providing this feedback, martec!

Join Us: Bounties & Jobs

Coordinated by the yAxis Champions Programme, the yAxis Bounty Board lists requests for proposals (RFPs), where community members can respond to specific Project needs and receive compensation upon task completion. See the current opportunities below and check the Bounty Board frequently as more opportunities will be added over time.

If none of the current opportunities appeal to you, but you would still like to contribute, reach out to waali@yaxis.io. You have the opportunity to shape the next era of yAxis.

That concludes the seventh edition of The Weekly Yax. Thank you for reading and looking forward to many more!

Onward and upward, Yax Herd!

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