ElasticSwap — Real Yield
There has been a lot of discussion around the various yield-bearing strategies in DeFi recently. This of course makes sense given that most yield strategies are worthless in a bear market. Yield farming was transformative to DeFi as a whole, but when yield is paid out in a token that continues to dilute those who are diamond-handing it, you quickly find out the emperor is wearing no clothes.
When yield is paid out in a token that continues to dilute those who are diamond-handing it, you quickly find out the emperor is wearing no clothes.
When ElasticSwap first launched in March, we too had a staking contract that paid out $TIC tokens, which were immediately claimable. We were not surprised that people sold every price rise to convert their “yield” into “real yield”. Yield in an underlying token is only as good as the value of that token and the ability to use it outside of that very narrow ecosystem.
Recognizing this problem, the ElasticSwap team decided to alter our staking contracts. Stakers generate rewards in an unrealized state and those rewards become realized as the protocol itself generates fees. Then, when the rewards are claimable, they are not just the underlying $TIC token but $TIC-USDC.e ELP tokens, meaning you get a commensurate amount of $USDC.e with your $TIC, making this yield “real yield”. You can unwind the ELP tokens and take your $USDC.
Months later we now see the move towards protocols generating “real yield” is in full swing. People no longer want to earn a protocol’s token as yield… nor are they as willing to earn those tokens if they require extreme lock-ups. What they do want is to earn ETH and USDC and DAI and FRAX. We didn’t realize at the time that we were on the front-end of a trend and we continue to view our rewards program as incredibly beneficial.
We remain committed to our community and we love that the “real yield” we generate is directly tied to the protocol’s success. What better way to get your community to buy in and push the project as well.
Who knew, little ElasticSwap, leading the way in the world of REAL YIELD!
Come join us!
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Discord discord.gg/elasticswap
Website https://www.elasticswap.org
Twitter @elasticswap
Github https://github.com/elasticswap
Audit Report https://code4rena.com/reports/2022-01-elasticswap/
