It is with a heavy heart that we announce we are sunsetting the YOP Protocol.
In spite of this horrendous crypto winter, YOP Finance (YOP) has put huge effort into trying to make this a success. One of the first investments that Pluto Digital (Pluto) made as a VC, when YOP needed further backing to ensure its survival, Pluto stepped in to rescue the protocol and brought it inhouse. As we now know, this was at the height of the crypto market when DeFi and $BTC were strong and growing.
Since then, despite receiving many significant blows YOP kept on fighting.
We went into a Private Launch with great fanfare. Unfortunately this was short-lived as the next day Russia invaded Ukraine, destroying the macro environment. We fought on, improving the Dapp and building out boosting before our Public Launch. The week following the Public Launch saw the Terra/Luna crash, closely followed by the Celsius bankruptcy, the crash of the crypto markets and the start of the crypto winter.
We battled on. Working on improvements to the Dapp, launching campaigns such as Free Gas and promotional competitions, as well as endless amounts of AMAs to get the word out about YOP. Our messaging about transparency and security has become a standard for the industry as others have been found wanting. Unfortunately as some of the biggest names in the industry exploded around us, instead of our message resonating, it has been lost in the noise.
We wanted to give YOP to the community and create a DAO. To do this we needed a critical mass of users to manage and govern this, and a strong TVL that would provide the Performance and Management fees to fund the DAO Treasury. The YOP Ambassador program has been fantastic. A huge thanks goes out to Will, Ben, and Daryl for all your hard work. The promotion, the Twitter Spaces, the commitment has been amazing. It looked like we might be able to make this a success despite the winter. Unfortunately then came the FTX explosion. This has spooked the markets further, causing waves across all remaining exchanges. Trying to maintain a balance between market liquidity and risk exposure has become nearly impossible. With this significant shock, we have seen huge amounts leave the YOP Vaults, they are down nearly 80% from their all time high, and have lost 60% in the last 3 weeks alone!
It is not just about getting back up this time. YOP’s ongoing use of CEXs would need to be reviewed to manage risk more effectively. The risk of centralised exchanges collapsing has already pushed us towards a DEX only model, with all remaining liquidity being held in Uniswap. A new wave of marketing would be needed to bring in new crypto into the Vaults just to recover the TVL to previous levels, let alone try and hit the heights we initially thought we would achieve. And this would need to be achieved while bringing in significant numbers of new users so we can reach a critical mass, numbers we struggled to bring in at the start of the winter when there was still significant trust and belief in the market.
We are sad and disappointed that YOP has failed to deliver. It has certainly not been from a lack of trying.
Following this announcement, all staked positions will be unlocked so people can withdraw their $YOP tokens. We have disabled all deposit buttons on the Vault and YOP Lockbox to ensure no one accidently puts crypto into the protocol.
Thank you for sticking with us through everything. We wish we could have parted on better terms.
A post explaining the decision process for sunsetting YOP will be announced in a couple of hours.