March 2023 Yield+ Report
Notice To DeFi Protocols From the Yield+ Team
In the initial Yield+ Blue Paper, there were a number of requirements laid out for DeFi protocols to be eligible to receive funding. Although code audits were recommended in this document, it was not presented as a requirement. However, after listening to feedback from the EOS community, a decision has been made by the Yield+ working group to require that all participating protocols receive an audit from a reputable firm, in order to be eligible for this program.
This amendment will help further ensure the safety and security of user funds on the EOS Network. All protocols currently participating are required to meet this new requirement by April 15th 2023 in order to continue receiving funds from Yield+. Any questions on this can be directed to the Yield+ Telegram group.
Thanks for your cooperation and participation in growing the EOS ecosystem.
As spring approaches, EOS TVL in the program was broadly unchanged in local terms and achieved a modest increase of 3.3% with $39.4m of TVL due to the solid performance from EOS over the month.
The program is subject to a review process currently, particularly with regards to entry requirements where an audit will be required, and to further metrics that may be examined to optimise the presence of TVL on -chain. As such we expect to see some volatility of TVL over the next period as dApps adjust to the changes.
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.
Top 5 dApps Change in TVL
| EOS (m) t-1 | EOS(m) t | Δ | Δ EOS | Δ USD | |
| vaultdefi | 10.79 | 9.47 | -12% | -1.32 | -1.57 |
| swapdefi | 8.11 | 7.85 | -3% | -0.26 | -0.31 |
| lenddefi | 4.00 | 3.81 | -5% | -0.19 | -0.22 |
| danchorsmart | 3.59 | 3.74 | 4% | 0.15 | 0.17 |
| dfsdeveloper | 3.57 | 3.39 | -5% | -0.18 | -0.21 |
Cumulative TVL
TVL continues to disperse across dApps.
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 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. Absolute TVL does not play a role at this point and drops out the calculations.
We display the trends of the two other components, Entropy and TVL to Market Cap Ratio below and the overall Factor that we observe to test the efficacy of the programme.
Entropy trended upwards reflecting increasing diversification of dApps.
The TVL to Market Cap ratio maintained its positive positioning from last month.
Similarly, the level of the overall performance metric held reflecting stability from the fundamental growth of the program.
The normal measure of correlation between EOS Market Price and TVL broke down this month to 0.70 as we saw more market-driven performance originating from BTC in the token price.
Visual examination of the log returns displays more of a lead-lag effect than a change in TVL exposure.
The trend is depicted below of TVL/MC since inception. It continues to oscillate currently more on general market volatility with TVL acting as a (stable) proxy for EOS idiosyncratic risk.
Wider Market
Below we have plotted TVL performance in EOS against Ethereum, and then a basket of other chains ‘RoW’ comprising Binance Smart Chain, Tron, Artbitrum, Polygon, Avalanche, Optimism, Fantom and Solana.
EOS performed in-line with ETH this month but underperformed the RoW basket, which was inherently more volatile both ways than EOS and ETH. Again, specific market factors and money-flows outside of TVL effects were prevalent in this month’s data.
The data this month confirms the same conclusions reached in previous reports and so recommendations remain similar. The program sees steady uptake and steady growth in TVL against market cap. TVL in the EOS ecosystem remains strongly idiosyncratic.
Yield+ Treasury Account
The ENF has allocated in total 600,000 EOS for Yield+ to date, or 0.06% of overall supply, which has generated a TVL of circa 3% of market cap.
| Starting Balance | 212,290 |
| Allocated | 114,593 |
| Funding | |
| Unclaimed | 190 |
| End Balance | 97,887 |
| Net of Liabilities | 97,697 |
Unclaimed rewards are generally not significant.
Recommendations
The program has operated for 7 months, and there are positive trends emerging. Whilst the goal has been to attract on-chain liquidity in general, we now believe that several steps can be taken to qualify the TVL fundamentally and economically by developing:
- An allocation algorithm that responds to key metrics as originally laid out in the Yield+ paper
- More granular analysis of economic contribution from host dApps such as active wallets, users and DeFi / GameFi related performance features.
Report presented by 0rigin.one
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 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) was forged through a vision for a prosperous and decentralized future. Through our key stakeholder engagement, community programs, ecosystem funding, and support of an open technology ecosystem, the ENF is transforming Web3. Founded in 2021, the ENF is the hub for EOS Network, a leading open source platform with a suite of stable frameworks, tools, and libraries for blockchain deployments. Together, we are bringing innovations that our community builds and are committed to a stronger future for all.
