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Jul 28, 2021

Yieldly: Multi-Asset Staking and Cross-Chain Swapping on Algorand

By: Algorand

Blockchain projects have been using Algorand to benefit from a scalable, secure, fast, and truly decentralized network supporting multiple types of tokens and smart contracts. Besides CeFi use cases aimed at enterprises and developers, the Algorand infrastructure is making a foray into decentralized finance (DeFi) – one of the fastest-growing crypto trends. 

Yieldly leverages Algorand’s blockchain features to provide users with exciting products and potentially lucrative yield-generation opportunities.

What is Yieldly?

The team behind Yieldly wants to streamline the exchange of tokens by helping blockchains better communicate with each other. The end goal is to build a cross-chain decentralized exchange that benefits users in the first place.

Yieldly started on Algorand to let users trade faster and in a secure environment while enjoying lower fees compared to other DeFi protocols. Eventually, it will expand to other protocols to provide cross-chain solutions and thus reduce the current fragmentation of the blockchain industry.

Besides trading, users can earn crypto investment income by staking the native token, YLDY, in the ALGO/YLDY liquidity pool. Users can also stake ALGO to participate in Yieldly’s no-loss lottery, maximizing the potential gains. By gamifying users’ crypto holdings, Yieldly is attracting more crypto investors and “yield farmers” interested in DeFi earnings opportunities.

Yieldly was founded last year and is backed by well-known institutional investors, including LongHash Ventures, Borderless Capital, CMS Holdings, Neo Global Capital, Kosmos Capital, Block Dream Fund, LD Capital, Kernel Ventures, and IBMR.io. So far, investors have collectively deployed $1.7 million as part of a financing round followed by an IDO (initial DEX offering) event.

What DeFi Products Does Yieldly Provide?

Yieldly offers a suite of DeFi products revolving around trading digital assets and earning investment income. Currently, it provides three products:

  • Bridges – Yieldly Bridges is a mechanism that connects the Algorand ecosystem with other major blockchains, including Ethereum, Binance, and Polkadot. The product allows users of the mentioned blockchain networks to benefit from the Algorand protocol and Yieldy’s ecosystem. Initially, Yieldly offers an ERC20 bridge that connects Algorand Standard Assets (ASAs) with the ERC-20 ecosystem.
    Yieldly will facilitate cross-chain staking for ASA, ERC-20, BEP-20, and other protocols. Yieldly Bridges will also act as a fiat on/off-ramp.
  • Staking – Yieldly Staking is the main product enabling users to earn passive income. At the moment, users can stake YLDY – an Algorand-based token – and earn rewards in the form of YLDY and ALGO tokens.
  • No-loss lotteries – So far, this is Yieldly’s flagship product, which is another staking mechanism with earning potential. Users can put their ALGO tokens to work by depositing them into the no-loss lotteries smart contracts and receiving tickets in exchange. Every week starting from June 11, Yieldly runs one no-loss lottery draw that distributes ALGO and YLDY rewards to winners. To increase the chance of winning, users are advised to enter each draw as early as possible.
    Thanks to staking and no-loss lotteries, the total locked value (TVL) on Yieldly surged to over $16 million several weeks after the launch, helping the DeFi ecosystem make it to the top 40 DeFi yield protocols by TVL. 

Yieldy’s products provide higher-than-average gains and, more importantly, are secure. The smart contracts have been audited by award-winning cybersecurity firm Halborn, which previously verified Coinbase, BlockFi, and Stellar, among others. According to Halborn’s report, Yieldly passed all assessment steps.

The Benefits of Building DeFi Products on Algorand

There are several reasons why the Yieldly team decided to build the DeFi ecosystem on Algorand.

Algorand’s Pure Proof of Stake (PPoS) solves the blockchain trilemma by achieving the three key elements – scalability, decentralization, and security – without compromising any of them. On top of that, Algorand puts an emphasis on user experience, enabling developers to build decentralized applications (DApps) centered on speed and performance.

The greater scale allows Algorand to ensure high throughput and low costs, which is essential for DeFi protocols aiming to go mainstream.

The network’s PPoS consensus mechanism randomly selects the next block validators from the entire pool of ALGO token holders, which maintains the security of all transactions and smart contract operations. The PPoS algorithm makes cheating by a minority of potential bad actors mathematically impossible, while cheating by a majority is unfeasible.

Thanks to almost instant finality, transactions become permanent within seconds, and there is no way to tamper with the network since it’s unforkable. 

Yieldly founder and CEO Sebastian Quinn stated:

“With nominal fees, fast transaction speeds and energy-efficient design, Algorand is the ideal platform upon which to build a future-proof DeFi solution. The Yieldly No-loss Lottery really has the potential to become a major onboarding platform into the DeFi ecosystem at large.”

With Yieldly, which has secured millions in TVL within less than six hours, Algorand proves that it’s an ideal choice for DeFi use cases. Its smart contract infrastructure, the ASA framework, and atomic swaps can be combined to develop sophisticated DeFi ecosystems in line with the latest trends.

Watch the interview with Yieldly Co-Founder Sebastian Quinn on how they are expanding DeFi on Algorand: