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Last updated: Aug 21, 2023
Yield Yak is an Avalanche-based auto-compounding platform and DEX aggregator aimed at optimizing users’ profit on liquidity mining programs.
Yield Yak is a community-driven project, meaning that the protocol community runs the platform, chooses the compounding mechanisms, suggests new strategies, proposes updates, and contributes to the ecosystem development.
The main product of Yield Yak is auto-compounding; with this feature users’ rewards obtained through providing liquidity to the farms get automatically reinvested and then accumulated to get more rewards.
Yield Yak has diverse Pool Farming liquidity sources, as all DEXes issuing tokens on the Avalanche network have pool integration for yield farming on Yield Yak, meaning that users can deposit different LP tokens from AVAX-based DeFi exchanges into farms for auto-compounding.
Once LP tokens are deposited into Yield Yak, they are pooled with the tokens of other farmers, while the compounding costs are divided among users. This function helps decrease the AVAX fees and generate rewards faster.
Yield Yak calculates returns on deposits using actual and recent performance. Simple APY is based on recent performance, which is annualized without compounding. Compound APY displays the simple daily ROI compounded over a year as it considers that users’ farming assets grow and compound.
Users can also get additional rewards by clicking the Reinvest button. When pressing this button, the system takes all pending rewards from a pool, converts them into the farm asset, and reinvests them back into the pool to compound deposits for everyone in the farm. Whoever is first to press the button, earns a reward for compounding deposits (5% of the farmed token).
Another service of the protocol is Yak Swap, which is a DEX aggregator. It allows users to compare the token pairs and find suitable prices when swapping one token for another. Yak Swap executes trades by routing them between different Avalanche DEXes, which gives better rates as compared to swapping using a single DEX.
Yield Yak also locks ‘ve’ tokens (also known as Voting Escrow tokens) on some of Avalanche’s largest platforms in order to boost yields for its users. Yield Yak then issues its own derivative version of this token that users can stake to earn platform fees from the associated farms. Examples of these are yyJOE and yyPTP. For a regular user, they can simply farm on Yield Yak’s Trader Joe and Platypus pools and benefit from Yield Yak’s veJOE and vePTP balances.
In addition, Yield Yak also allows users to stake tokens to earn AVAX rewards. The reward here is AVAX, and not minting new Yield Yak tokens (YAK), so this will not increase the supply of YAK which is not an inflationary token.
Before starting to use the Yield Yak app, it is first required to connect Metamask wallet or use Wallet Connect and prepare AVAX to pay for transaction fees.
For farming, a user needs to select the Farm section on the main menu of the app. Then, the lists of platforms integrated into Yield Yak will be displayed (Aave, Pangolin, Trader Joe, Platypus, and so forth). Users can filter the platforms by clicking ’All Platforms’ and then choose the platform to farm.
There are three types of farms to choose from: single asset, LP tokens, and Stablecoins. After selecting the pool, users will be able to see the profit in each pool, then they need to deposit liquidity in the selected pool, pay the fee and confirm the operation.
If a user hasn’t added tokens to the liquidity pool before, it can be made by clicking ‘Get LP Tokens’, as the next step the user will be automatically switched to the platform that was chosen before receiving the corresponding LP tokens. After receiving LP tokens, it is necessary to return to Yield Yak and deposit the desired amount of tokens, pay the network fee, and confirm the transaction.
For swapping, the user needs to select the ’Swap’ section on the main menu, then select the token pair, enter the amount to be swapped, and click the ‘Check Price’ button. The system will automatically aggregate the list of platforms with the best rates at the moment, which will be displayed logically from top to bottom. As a final step, it is required to click ’Swap’ and confirm the network fee.
To stake tokens, the user needs to select the Stake section on the main menu, select the pool, enter the amount to be staked, pay the network fee, and click the confirmation button.
Yield Yak fees are usually between 5-10% of the reward tokens. Fees are variable and depend on the network's conditions. Yield Yak charges no deposit or withdrawal fees.
YAK is the native governance token of Yield Yak and has a total supply of 10,000 YAK with no plans to mint additional YAK in the future. 7,350 YAK of tokens were released for circulation right after the initial distribution, 2,650 YAK are reserved as non-circulating, 1,500 YAK is left for the team, and 1,150 YAK are meant for the development of the ecosystem. The initial distribution was mainly aimed at early supporters and was divided as follows: 50% for depositors, 15% - for reinvest pushers, 15% for the team (vested), 15% for the ecosystem, and 5% for the community.
YAK can be used for Yield Yak staking. YAK Stakers receive farming rewards in AVAX which are funded with revenue from the platform, as well as voting power, so they can govern the network and decide on important issues. The voting power is determined by the amount of staked YAK. YAK can also be accepted as collateral on Marginswap and Moremoney.
Yield Yak has been audited by CoinFabrik who Yield Yak has enlisted to continually review new smart contracts as new strategies are rolled out. What this means is that while the majority of Yield Yak’s products have been audited by CoinFabrik, not all smart contracts (particularly if they are new farms or strategies) will have been audited.
Also, Yield Yak runs a Bug Bounty Program to reward users for reporting issues. In addition, Yield Yak farms are protected by a timelock, which delays the team from making changes or withdrawing funds on behalf of users.
The team behind the Yield Yak remains anonymous.
All partnerships of Yield Yak revolve around Avalanche-based projects. Yield Yak is partnered with nearly all of the major DeFi protocols on Avalanche, including Trader Joe, Pangolin, Platypus, and Moremoney Finance. It also partnered with Cook Finance and KassandraDAO Index platforms to optimize yields for Avalanche indexes.
It is planned to introduce Vaults into the ecosystem, which will be designed for long-term users, enforce security measures, develop new effective compounding strategies and products, as well as integrate more Avalanche platforms. Yield Yak will also be launching its own liquid staking derivative, bringing yields from the Avalanche P-Chain which secures the network to the Avalanche C-Chain. This liquid staking token will go by yyAVAX and is coming soon.
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Last updated: Aug 21, 2023
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