Trust and Transparency
At YOP Finance we pride ourselves in being transparent, so we can build trust with our community. The days of DeFi just being all about the high APYs are over, people want to know more about who they are working with to generate yield, and where that yield has come from.
YOP Finance are completely transparent about how we earn yield for you. Currently we are generating it from the Curve and Convex protocols. We are even happy to share with you, which pools within those protocols we are using.
For our stablecoins we are using the FRAX Curve Pool in both Curve and Convex, for $BTC we are using the sBTC pool on Curve, and for $ETH we are using the stETH pool in both Curve and Convex. You can find all the details on our Dune dashboards https://dune.com/yopfi/yop-strategies
We are sure you are aware of the challenges that some platforms have had with their stETH exposure, and our exposure has pushed us to make decisions on this as well. As you may have read in one of our previous Medium posts, Pluto made sure that all our exposure was covered so that the users were not exposed. More details on this can be found here https://yopfi.medium.com/update-for-our-eth-vault-depositors-64a91f72eeaa
Knowing where the yield comes from and how we manage to generate a double-digit yield is important for our users. I’ve heard too many people say that double digit yield is too risky, that there must be a trick or that somehow, it’s a ponzi scheme. Let us set the record straight right now with how YOP Finance achieves this and so you know what the risk is. We achieve a decent but modest APY in crypto terms, from the base APY. This is then topped up to the double digits using the $YOP emissions. The emissions have zero risk because they are owned and controlled 100% by YOP Finance, so all we are doing is moving $YOP from our wallet into your wallet. So yes, there is a risk for some of the APY, the base APY, but nothing like the same risk that one would be exposed to if all the APY was coming from the base APY. So, when Celsius and LUNA were giving 18%-20% APYs, that was very risky because all the APY was base APY. YOP Finance’s base APYs make up a small percentage of the total returns, therefore significantly reducing the risk exposure but at the same time generating the users a great return. Below is an example of the Base APY vs the $YOP Reward Emissions Top Up. Please note these numbers are constantly moving so this is just a representation.
This is extremely important to understand, so that you know how we manage risk for you and the level of risk exposure you have.
The automation we are building to provide you with automated risk management is there to protect you. The developments we are putting in place to show you the risk exposure of the pools we are deploying into, so we know what else is in that pool, and where the crypto in that pool came from, covering ourselves and our users from an AML perspective, is there to protect you. The monitoring and processes we put in place to ensure we are alerted to depegging events or bank runs is there to protect you.
We will be sharing a detailed breakdown of this monitoring and the tools we have built very soon, as again, we want you to see and understand the level of care that goes into protecting you and managing your risk exposure.
YOP Finance takes risk management very seriously, so when people doubt what we are achieving is possible, unless we are being reckless, it hurts. We need our users, our community to trust us, and we want to give you a great APY at the same time!
Dave Burrells — COO of YOP Finance