September 2022 Yield+ Report

Yield+ is a liquidity incentive program that was inspired by the most successful DeFi incentive programs, which went live in it’s pilot phase on August 28. This report will look back at some of the metrics produced and provide insight into the progress of the program over it’s first month.  This report will be produced monthly and develop organically as the granularity and significance of data evolves.

For more information on Yield+, please refer to the Yield+ Blue Paper which outlines how we’re making EOS a more competitive and attractive platform for DeFi applications, builders, and users. Visit TokenYield.io to apply.

Total Value Locked (TVL)

The current program allows for EOS and USDT to be counted as TVL for reward eligibility.

There are 4 tiers of eligibility for dApps with minimum TVL of EOS 200K, 750K, 1.5M and 3M respectively.

Seven dApps participated from the launch, with a further six qualifying for rewards.  This contributed an initial $18.3 million of TVL.  Six further dApps joined the program with two, Vigor and DAOSwap, passing the minimum threshold to qualify for rewards for periods.

Yield+ Treasury Account

The Treasury was funded with 25,000 EOS and allocated ~14,394 EOS in rewards, ~58% of its capital.  However, at the date of this report, ~78% of allocated rewards were not claimed.

ProtocolUnclaimed Rewardsbal.defi379.3509danchorsmart3,160.6616dfsdeveloper3.0938lend.defi802.9847lend.pizza440.3609swap.defi6,256.2628Vigorlending90.0770daoswap86.7516Total11,219.5433

The account balance was depleted and adjusted accordingly:

Starting Balance25,000.000Allocated(14,394.1431)Unclaimed11,219.5433End Balance21,825.4002Net of liabilities10,605.8569

Do note that being the first month of the program this data is reporting an extended month.

Performance Metrics

The original Yield+ Blue Paper highlighted three core stages of the transition of a Layer 1 chain’s value proposition from speculation to ecosystem driven.

EOS remains in the first of these stages, ‘Green Field’, where Market Cap exists without significant TVL. In this stage, the Yield+ reward mechanism primarily aims to drive adoption through the TVL to Market Cap ratio, whilst the other factors are less significant.

As a brief reminder, the paper considers a formula to calculate total rewards is calculated via three factors

TVL to Market Cap ratioAbsolute TVL (scaled [0.1])Distribution of TVL – Entropy (scaled [0.1])

The three different factors that will ultimately determine long term rewards play different roles in driving this progress.

The absolute TVL factor at this moment approximates as 1 so it is removed from the analysis.

We note that:

our Entropy factor has been steady between 0.72 and 0.76 suggesting a relatively healthy TVL breakdown. The Absolute TVL factor has had little effect remaining at close to 1 as it should only become relevant in the latter stages of the program. We have therefore seen a high correlation of 0.9 between rewards paid out and TVL to Market Cap ratio. This positive correlation is as desired at this stage in the program.

Although we have seen a reduction in both TVL and Market Cap along with the broader crypto market, there has beein a 7.1% growth trend in the key TVL to Market Cap ratio. Although partially driven by newly qualified dApps, this trend remains present regardless.

We can also observe correlation between the price of EOS and TVL breaking down.

The early resilience of the TVL metric hints at the potential for speedier adoption in the ecosystem. Though modest, these are early signs that the program has received recognition and supports a positive outlook for the program.

Wider Market

This month has seen a general trend downwards in TVL across the wider market. Below we have plotted TVL in EOS against TVL in six other large cap L1 chains. Although EOS still ranks outside the top 20 chains when it comes to TVL, its specific TVL growth is dislocated from the market.

Future Recommendations

Since this is the start of the Yield+ program, the dataset does not allow us to draw hard and fast conclusions as to its effectiveness. It is more important at this stage for Yield+ to engage in outreach activities to encourage participation from a broader range of dApps and to capture the associated economic stimulus of greater TVL on chain.

Yield+ Pilot Phase Transitioning to Full Launch

When the Yield+ liquidity mining program first launched on August 28, it did so in a pilot/beta phase. During the Pilot Phase, the initial reward emissions were throttled to 1% to ensure that:

The smart contracts worked as intended in a production environment on the EOS mainnet. Even though the Yield+ contracts had been audited and tested on Jungle, a cautious approach was still taken at the onset of the program to minimize risk.Allow time for the DeFi protocols to deploy their own smart contracts that would manage the distribution and usage of the yield subsidies being earned through Yield+.Provide a baseline of aggregated data for establishing the program. This September Yield+ Report serves as that baseline.

Yield+ Full Launch on October 17

After 6 weeks of Yield+ operating in its pilot phase, it is now time to remove the throttle to transition into full launch phase on Monday, October 17! The full launch for Yield+ will increase the reward subsidies on EOS and native USDT from 1% to 5% for DeFi protocols enrolled in the program. This will provide 5x the incentives for protocols and end users to lock up their tokens and put them to work in EOS DeFi.

EOS Network

The EOS Network is a 3rd generation blockchain platform powered by the EOS VM, a low-latency, highly performant, and extensible WebAssembly engine for deterministic execution of near feeless transactions; purpose-built for enabling optimal web3 user and developer experiences. EOS is the flagship blockchain and financial center of the EOSIO protocol, serving as the driving force behind multi-chain collaboration and public goods funding for tools and infrastructure through the EOS Network Foundation (ENF).

EOS Network Foundation

The EOS Network Foundation (ENF) is a not-for-profit organization that coordinates financial and non-financial support to encourage the growth and development of the EOS Network. The ENF is the hub of the EOS Network, harnessing the power of decentralization as a force for positive global change to chart a coordinated future for EOS.

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