Yield+ is designed to build economic activity on EOS through incentivizing DeFi dApps that increase TVL and generate yield. The Yield+ incentives program entered its second full month in October. This report will be produced monthly and will develop organically as the granularity and significance of data evolves.
The general theme since inception of the program is that a positive impact has been experienced, especially considering the volatile macroeconomic environment.
Yield+ entered into its second phase of increasing the TVL Yield to 5% APR on October 17th.
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.
Eleven dApps are now participating in the program with seven were qualifying for rewards and a further two now qualifying. Vigorlending had intermittently qualified in September and has now consolidated well above the threshold with over 400,000 EOS collected in TVL. Aggnewdex, having seen a surge in TVL from around 70,000 to 240,000 EOS, also now qualifies.
Yield+ Treasury Account
The Treasury was funded with a further 300,000 EOS in line with the increased APR and allocated 52,429 EOS in rewards (17% capital) at the start of the month. 97% of rewards allocated this month were claimed with the residual from last month all claimed.
The account balance was depleted and adjusted accordingly:
|Starting Balance + Funding||321,825.4002|
|Net of liabilities||258,176.4332|
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 ratio
- Absolute 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 factorhas remained steady between 0.72 and 0.76 suggesting a relatively healthy TVL breakdown. The slight trend has been from the top of this range to the bottom but the significance of this is yet to be determined.
- 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 an extremely high correlation of 0.986 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 again seen a reduction in both TVL and Market Cap along with the broader crypto market, there has been a 7% growth trend in the key TVL to Market Cap ratio.
We can also begin to observe the correlation between the price of EOS and TVL.
The early resilience of the TVL metric through the first couple months of the program 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.
This month has seen a general trend downwards in TVL across the wider market as generally we observe a ‘risk-off’ 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 absolute TVL, its specific TVL growth is positively dislocated from the market.
Many of the same conclusions can be drawn this month from the first of the program. The program sees steady uptake and steady growth in TVL against market cap. TVL in the EOS ecosystem remains strongly idiosyncratic, although not entirely immune from trends in the wider market.
Since this is still early in the Yield+ program, the dataset does not allow us to draw hard and fast conclusions as to its effectiveness. It is still 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.
An interesting data point to watch will be transaction fees paid on-chain as this will start to give a picture of the economic effects of the presence of TVL.
We are of the firm view that the accumulation of TVL on chain will drive economic expansion of the Ecosystem and contribute to the capital value, security and catalytic growth of EOS.
Level-up your knowledge of Yield+ and get involved!
Explore the Yield+ Portal.
Join the Yield+ Channel on Discord.
Connect with Yield+ Support on Telegram.
Study the Yield+ Documentation.
Dive into the eosio.yield-contracts Github repo.
Read the Yield+ Blue Paper.
Read the Previous Yield+ Report
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 Antelope framework, 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.