yfBETA restructures the DeFi narrative to reward tokenholders. Yield is great, but how does it add value to tokenholders?
yfBETA uses yields generated from farming other protocols. When you stake your assets on yfBETA, in addition to farming yfBETA, the assets will be used to farm the highest performing assets from other protocols, leaving yfBETA strategies to do the hardwork whilst you farm more yfBETA. Rather than distributing these rewards to farmers, they are used to buy and burn yfBETA in the market, reducing the supply of yfBETA.
The yield generated from holding these assets are paid in-kind on the highest-yielding platform. When a withdrawl is made, the smart contract calculates the profit and send this to the governance address. From the governance address, 47.5% will be converted to ETH on Uniswap, and buys the liquidity on Uniswap for yfBETA with whatever ETH it’s accumulated. Another 47.5% is left on the platform and reinvested into yfBETA vaults, creating a growth in the capital that compounds over time. The remaining 5% is retained in the governance wallet for development needs, includign gas costs.
This Buy n Burn mechanic also has the added value of directly increasing the token price. Where normal burn processes leave it to the markets to apply a new price to the tokens burned - through supply and demand - a Buy N Burn actually raises the value as tokens are bought from the market from the lowest sellers. This immediately increases token price for all holders.
How does it compare? Say we all have 1m tokens total, and we each have ~10k tokens. If we burn 1% from everyone then we all have 1% less, increasing price by 1%.
But net net that's equal to what individual tokenholders had before, in value
if the smart contract buys n burns 1%, then the sellers at the market have 1% less and have more eth - and everyone else has a higher % of the token supply, which is now worth more at market.
This means that as time goes on, yfBETA is compounding it’s capital by reinvesting 47.5% of the proceeds back into the ecosystem. This means that there’s more capital at work to create burns.
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