Algorand pioneer Yieldly is building bridges to the future of DeFi
The Decentralized Finance (DeFi) markets are synonymous with the Ethereum blockchain protocol. So it is quite an event when an ambitious DeFi application chooses to launch its offering on another one. That is exactly what Yieldly, the provider of staking contracts and a no loss lottery, chose to do when in 2020 it became the first DeFi platform to be built on the Algorand blockchain. The relative attractions of Algorand – lower fees, faster transaction speeds and energy efficiency – were predictable enough, but Yieldly has other reasons for preferring the alternative blockchain. Dominic Hobson, co-founder of Future of Finance, spoke to Simon Giles, co-founder of Yieldly, about its initial choices and what the business plans to do next.
Questions that are being asked
- You chose to work with Algorand rather than, say, Ethereum, which was an unusual choice, because so few projects have been launched on Algorand – indeed, you are the first DeFi project on Algorand. What explains your choice (e.g. energy savings, speed, cost, security, variety and quality of the smart contracts – or institutional appeal)?
- Institutional blockchain networks (such as Corda and Hyperledger) solve the problem of costs and speed by not being decentralised blockchain networks at all. Have you with Algorand solved the problems of speed and cost while remaining genuinely decentralized?
- Is the Algorand Proof of Stake model open to manipulation by bad actors?
- Something that made Algorand an unusual choice is the absence of an exchange, which you are correcting. Why does an exchange matter (e. g. a seamless choice across tokens)?
- What does your native token (YLDLY) bring to the project that ALGO cannot offer?
- Your long-term goal is to replicate institutional quality savings and borrowing products in DeFi. Why did you start with a lottery (Yieldy No Loss Prize Game)?
- How do you identify (a) stakeholders and (b) winners in the Yieldly No Loss Prize Game?
- How do investors earn rewards on the Yieldy No Loss Prize Game deposits (i.e. Algo rewards)?
- What is the Total Value Locked in the Yieldy No Loss Prize Game?
- You also offer a liquidity pool for depositors and borrowers (Yieldly Pools). How does that work (especially in terms of calculating the yield)?
- What technical or commercial advantages does Yieldly Pools offer you?
- You have built a bridge to Ethereum, so inter-operability between blockchain networks is clearly part of your strategy. Were you surprised a bridge to Ethereum did not exist already or does that reflect the limited use (hitherto) of Algorand for DeFi apps?
- What is the advantage of the bridge to Ethereum?
- How does the bridge to Ethereum work?
- Are you building or planning to build bridges to other blockchain protocols/networks?
- Are your bridges intended to offer an alternative to centralized crypto-currency exchanges?
- How do your bridges compare with FINP2P, the protocol that allows investors to execute token trades in apps on one blockchain network and settle and custody them in apps on another blockchain network?
- The Algorand Standard Asset (ASA) allows any asset to be tokenised to an Algorand blockchain network. Are security tokens, fractionalised real estate, NFTs etc. part of your commercial strategy?
- Your strategy aims to recruit others to develop further applications on Algorand using your smart contracts. What can you do to make that happen?
- Who audits your smart contracts and why should developers and investors have confidence in them?
- You worked with Nuggets, which is a big believer is self-sovereign identity. What contribution can digital identities make in terms of attracting institutional money?
- DeFi is young and only now starting to attract regulatory attention, but hard for the uninitiated to understand. To what extent are you looking to make DeFi more accessible, especially to institutional money as opposed to Millennial/Gen Z retail money?