Bulldax DeFi Yield FAQ

With the start of the COMP distribution, governance tokens, and other DeFi projects like YFI, attention has been accumulating in the DeFi sector. There is a big demand from users who want to participate in ‘yield farming’ where users can earn both interest and governance token rewards.

However, many users face difficulties when trying to utilize DeFi Protocols because of high gas fees, complicated interfaces, and the risk of losing money.

Bulldax decided to release a new service called Bulldax DeFi Yield to provide Safe, Easy, and Cheap (SEC) services to our users who want to utilize DeFi protocols. We solve the issue of high gas fees and diminish risks of individuals users losing capital from mistakes.

Q1. What is Bulldax DeFi Yield program?

Bulldax DeFi Yield is an easy to use service that maximizes yield by depositing users’ assets into a DeFi protocol. Users will not have to pay any gas fees. The Bulldax DeFi Yield program distributes interest proportionally to the total subscribed amount.

Bulldax DeFi Yield maximizes yield by paying the users’ Ethereum gas fees and distributes rewards proportionally to the principal amount.

Q2. How is interest generated?

Borrowers who put collateral to take out a loan are required to pay a small fee for utilizing the platform. The interest paid/received by borrowers/lenders are driven by supply and demand.

If there is a small supply but high demand for a token, like DAI for instance, the platform will naturally increase the borrowing interest rates and also provide high rewards for lenders. Therefore, the interest the providers receive is generated from the fees lenders pay in exchange for utilizing the service.

Additionally, governance tokens (ex. COMP) shared by DeFi Platforms will also be distributed to participants.

Q3. What is Yield Farming?

Governance tokens are distributed to users who either lend or borrow from the platform. It rewards users and distributes voting power at the same time. The number of governance tokens users hold represents how much voting power an individual has. Users who have larger capital deposited in the protocol will receive more tokens as rewards. Yield Farming is depositing and lending tokens to maximize interest and tokens received from the platform.

Q4. Can I do DeFi Yield Farming myself?

Yes. Users can interact with DeFi protocols through non-custodial wallets like Metamask. In these non-custodial wallets, users hold private keys and manage assets personally, giving full control of funds to the users. However, DeFi Yield Farming may be difficult for users who are new to DeFi due to points provided below.

Q5. What are the difficulties and costs of lending myself?

Interacting with smart contracts (ex. Compound) individually comes with increased costs and complexities.

In order to farm governance tokens and get interest on the deposited token, a first-time user would need to execute at least 4 transactions and pay Ethereum gas fees:

• Approve token (Ex. DAI) spending. Gas fee 1 to 2 USD
• Supply DAI to Compound. Gas fee 5 to 10 USD
• Collect farmed COMP. Gas fee 25–30 USD
• Withdraw token from Compound. Gas fee 25 to 30 USD (Accumulated)

Depending on the Ethereum blockchain congestion levels, all processes can cost up to 60 USD meaning that with (for example) COMP and DAI APY (Annual Percentage Yield) of 15%, a user would need to deposit at least 7500 USD in the protocol to break even in one month period.

• Please note Gas fees continuously fluctuate.

Q6. How does Bulldax DeFi Yield work?

First, Bulldax creates a pool composed of users’ assets and interacts with the DeFi protocol as one entity, allowing the reduction of gas fees. To celebrate the launch of Bulldax DeFi Yield, Bulldax will cover all the gas fees involved instead of requesting it among pool participants.

Secondly, after the locked up period, Bulldax will distribute the appropriate interest and tokens proportionally to the pool participants to their Hanbitco wallet.

Q7. What are the benefits of using Bulldax DeFi Yield instead of farming myself?

Benefits of using Bulldax DeFi Yield instead of farming individually include:

• No gas fees;
• Easy to use Bulldax deposit interface;
• No need to send assets from Hanbitco or Bulldax wallets to web3 wallets;
• Experienced Bulldax team reduces risks of human error of interacting with web3 wallets.

Q8. Can I know the exact final quantity of interest and tokens I will receive at the end of the farming service?

No. The interest paid and tokens received by borrowers and lenders are driven by supply and demand; therefore, interest rates are always changing. If demand for a token is high, borrowers pay higher interest rates and lenders receive higher returns.

Farming yield also depends on the protocol market conditions: amount supplied to the protocol. The higher your supplied proportion to the total supplied amount is, the more yield tokens you will receive.

Note, that Bulldax distributes yield tokens directly to the Bulldax DeFi Yield pool participants and you are free to manage your earned tokens as you see fit.

However, you can refer to historic interest rates to infer a possible yield.

Q9. How will the interest be calculated?

The user’s capital percentage will be calculated from the total pool in the beginning. Through this, the system will be able to calculate what percentage of the whole interest the user will have to receive on settlement.

For example, if the user deposits an amount that takes up 10% of the total pool, the user will receive their principal with an additional 10% of the total interest accumulated from the program.

Example:

Total Pool: 100,000 DAI

User A Deposit Amount: 10,000 DAI (10% of Total Pool)

Compound Total APY: 15% (Dynamic)

DAI APY: 7% (Dynamic)

COMP APY: 8% (COMP received calculated in DAI) (Dynamic)

(Total APY: DAI APY + COMP APY)

User A Interest: (Total Pool with 30 days Interest — Initial Total Pool) X 10%

Q10. When is the return payment for the deposit interest service?

The return of crypto assets will be returned at the end of service date. (However, if the ending date of the deposit interest service is on a weekend or holiday, the crypto assets will be returned on the basis of the next business day.)

Q11. Is it possible that I can lose my deposit and interest?

This product is an investment and there is always a small possibility of your capital loss. Bulldax only acts as a platform to showcase audited projects and provide users with related DeFi services. Bulldax will not assume liability for any losses incurred due to project on-chain contract security issues.

Q12. Can I cancel the subscription?

It is not possible to cancel the subscription if you have already subscribed and deposited the tokens.

Q13. Can I trade while farming?

Since the assets will be deposited in the protocol, transaction cannot be made until the program is finished.

Q14. What is the decimal policy for Bulldax?

All participation, principal, and interest amounts in bulldax are rounded down from the fifth decimal digit to the fourth decimal digit.