Yield Yak introduces bonds with Olympus Pro
What Is Olympus Pro?
Olympus Pro is a service for protocols looking to own more of their own liquidity. Through the bonding service, these protocols accumulate the crucial infrastructural liquidity that they generally service via liquidity mining. Instead of renting or ‘paying’ for that liquidity, they simply purchase it, turning a value-draining perpetual expense into revenue-producing assets that facilitate the functionality of the rest of the platform.
How does bonding work?
All bonding can be done directly on the yieldyak.com/bonds site. From there, you can deposit your LP token (only if the discount is beneficial to you), as well as claim your YAK rewards. You also have the option to do this directly on the Olympus Pro site.
Why Yield Yak is offering bonds
We believe this to be a benefit both for users and Yield Yak. With bonds, a user can exchange their YAK/AVAX LP position with the Yield Yak Treasury for discounted YAK.
The treasury immediately owns on the LP position, and the user receives YAK over the course of 7 days with continuous, linear vesting. The benefit to a user varies with the discount. If the discount price outweighs the rewards from LP’ing, then purchasing a bond is beneficial.
Through this process, Yield Yak takes on more of their own liquidity, which longer-term has several benefits for Yield Yak and YAK stakers:
- Goal Alignment between Protocol and YAK holders: LPs are currently incentivized by high reward rates to provide liquidity for YAK in exchange for these LPs taking on the risk of IL. In the case of Yield Yak a majority of staking rewards (currently 60%) are used to incentivize LPs. If Yield Yak owned more of their own liquidity, these fees could be redeployed towards users who would prefer to stake YAK single-sided.
- Impermanent Loss. YAK holders would no longer need to subject themselves to the risks of IL in order to share in the platform’s revenues.
- Greater price stability. Yield Yak owning more liquidity ensures that during times of price volatility, the depth of liquidity remains. Currently, LPs may choose to remove their liquidity to avoid IL during a market crash or spike, further accentuating price impact of a YAK trade. Yield Yak owning more of its liquidity ensures more permanence of liquidity.
About Yield Yak
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