Yield is a non-custodial P2P lending platform that not only encourages lending (as usual) but also rewards borrowing in the form of YLD tokens. Yield also supports lending and borrowing of any ERC-20 token.
What is Yield Credit?
Yield Credit is the “future of DeFi lending”.
It is a non-custodial, personalized platform for fixed rate and incentive lending that pioneered its own DeFi lending niche; Peer-to-peer (P2P) lending, which is very popular in TradFi and has never been done in DeFi before.
Unlike how existing DeFi lending platforms work, the P2P aspect of Yield Credit means lending and borrowing are individualized rather than combined. When you lend cryptoassets with Yield Credit, they do not go into the pool of funds with other lenders, but go directly to the borrower.
This simple innovation in DeFi lending has the following very important implications:
Yield Credits are fixed, guaranteed and unchanged. The platform offers guaranteed fixed interest rates ranging from 2% to 12.5%. Yields can offer guaranteed fixed interest rates because loans are individualized and the parties involved agree to the loan offer or the terms of the loan request before it is disbursed.
Interest rates do not tend to ~ 0%
When lending or borrowing on Yield, the agreed agreed interest is exactly what will be earned / paid regardless of when the loan is repaid and what happens on the platform or the broader cryptocurrency market.
You do not need to worry about the dynamics of the market, due to which the rates on your active loans will tend to ~ 0%, because there is no general pool in which interest is distributed among different participants. Thus, each lender receives the full amount of interest on the loan repaid.
Credit or deposit for any ERC-20 token
Yield supports lending and borrowing of any ERC-20 token, including stablecoins, cryptoassets, DeFi tokens, utility tokens, elastic supply cryptoassets, wrapped cryptoassets, etc. This is truly a game changer as it opens up gateways to huge capital that previously could not be lent or borrowed on existing platforms.
In addition to the obvious benefits of Yield Credit being DeFi’s P2P lending platform, Yield introduced another key innovation:
Yield Credit is the first DeFi lending platform to encourage borrowing; if you successfully manage your loan on time, paying it off on time, you can earn up to $ 350 in YLD (subject to changes)…
Thus, not only lending is stimulated (as usual, interest accrual)but also borrowing through a reward in the form of YLD tokens for maintaining healthy loans and timely repayment.
Overall, Yield Credit’s incentivized borrowing, combined with the benefits of guaranteed fixed interest and the ability to borrow or borrow any ERC-20 token, is a recipe for success.
Who created YLD and when?
Yield was created by a developer under a pseudonym or organization known as Coiner_, who is rumored to have started working on Yield in 2018 following the rise and fall of Elixer (ELIX).
After Elixer, Coiner_ held on to the belief that a P2P DeFi lending platform that could work on its own and dramatically improve the market leaders was urgently needed. He was determined to build the platform and got enough supporters to see it through.
More than two years later, Yield finally launched on the Ethereum mainnet on March 10, 2021.
Prior to this launch, Yield launched a mock beta in early February 2020, which went very well, with early contributors receiving a YLD token giveaway for their contributions to the project. Then, in December 2020, the Yield app went public for further testing and distribution of YLD tokens to early adopters.
During this beta testing period, Yield acquired several notable contributors / developers, one of which is the Ampleforth Team (AMPL).
Yield Token Distribution (YLD):
- 200 YLD – Original beta platform testers
- 25K YLD – Top 100 YLD Token Holders
- 25K YLD – liquidity providers on Uniswap
- The current distribution of YLD is The Graden (liquidity extraction program)
What is the YLD token used for?
Yield’s native cryptocurrency is YLD, an ERC-20 token that can be crafted and burned and serves as a utility token for the Yield lending dapp and any future Yield dapps. YLD is mainly used to incentivize borrowers to reward YLD, provide discounts on commissions, and more.
Functions of the YLD token
- Minting and burning of YLD to timely reward loan payers;
- Staking – to receive discounts on commissions, reduce collateral and mitigate the consequences of liquidation;
- Yield Farming – YLD is rewarded by liquidity providers like SushiSwap.
You can track the YLD offer and play around with different scenarios of how it can be influenced using the YLD Offer Calculator:
Yield Credit users are charged a fee, which is then used to buy back and burn the YLD. If a user decides to stake (block) YLD, he can get a discount of up to 25% on commission (depending on how much YLD is blocked).
In addition, if a borrower stakes in YLD and receives a discount on fees, the amount of YLD he earns on the loan increases. In addition, they automatically lower the collateral liquidation rates.
So staking YLD to save on fees essentially gives borrowers another option if they ever need to keep their loans in the event of a market downturn, besides replenishing their collateral.
Yield has a YLD liquidity mining program called “The Garden” that helps with the distribution of its YLD token. The Garden began operations at the end of January 2021 with an award of 50,000 YLD per annum designed to reward liquidity providers.
YLD Reward for Current and Future Gardens (liquidity extraction programs) depends on the total amount of YLD mined by borrowers in the Yield app this month.
How is Yield different from AAVE or Compound Finance?
Yield Credit is a uniquely designed DeFi lending platform that completely overhauls the DeFi lending model used by protocols such as Aave or Compound, replacing their pooled lending with a personalized peer-to-peer (P2P) model.
This simple change has serious implications and is transforming DeFi lending as we know it today.
Features of Yield Credit that differ from Aave and Compound:
- Lending and borrowing is individualized;
- You can borrow and borrow any ERC-20 token * (with chainlink oracle as of March 2021);
- A wide range of collateral options from the first day (31 in total);
- Guaranteed fixed interest rates;
- Interest rates do not tend to ~ 0%;
- Borrowers earn YLD for maintaining stable loans and repayments on time;
- 100% commission is used to burn YLD.
As you can see, Yield Credit has a lot of differences / improvements over Aave and Compound, which allows it to take market share away from them.
Yield simply offers more incentives to use capital, and so the unused capital in Aave or Compound may go in search of better returns on Yield Credit. After all, Yield encourages borrowers to do just that and also supports any ERC-20 token.
Thus, Yield is opening the gateway to a huge ERC-20 capital that previously could not be lent or borrowed using existing platforms.
How much can you earn from paying off loans?
The borrower can always earn money by repaying the loan on time. As of March 2021, there is a cap of $ 350 per year for each loan.
What is Yield’s Chainlink Integration?
Yield Credit has integrated Price Feeds into its core network to secure its customized fixed rate lending markets.
By integrating Chainlink’s decentralized oracle network, Yield strengthens the security of its protocol by ensuring that smart contracts use high quality decentralized price data that is reliable even in the face of urgent loans and high gas prices.
Yield chose Chainlink over developing its own Oracle solution or using a different one for the following reasons:
- Chainlink is the most secure, reliable and time-tested decentralized oracle network in the industry;
- Chainlink price reference feeds have become widely used in the DeFi space, and for many cryptoassets, there is a stream of oracles being added even more;
- Chainlink pulls data from a variety of high quality data aggregators, providing volume-adjusted pricing with market coverage on all relevant CEX and DEX;
- If Yield developed their own pricing oracles, it is unlikely that they would be as reliable and secure as Chainlink’s offering;
- Developing your own oracle system would require not only a lot of time, but also a lot of investment.
Overall, thanks to the Chainlink integration, Yield users can rest assured that the pricing data used in Yield smart contracts is of the highest quality, reliability, security and protection against unauthorized access.
What currencies can I borrow and borrow?
Yield Credit launched with support for over 30 cryptoassets including AMPL (first to market), YFI, SUSHI, LINK, ANT, and more.
As Yield develops and its user base grows, more and more cryptoassets will be supported.
After all, Yield provides P2P lending for any ERC-20 token with Chainlink oracle price flow. When Chainlink creates new price streams for cryptoassets, they can be added to yield.
Currently, the minimum loan amount is USD 1,000.