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Vesper Finance is a Yield Farmer favorite: a non-custodial platform offering set it and forget it, auto-compounding, simple passive yield. The raw beauty of the platform is its revenue model that returns organic, sustainable and attractive yield.
The platform offers Pools where holders can deposit ETH, WBTC, LINK, USDC, etc to passively earn APY, analogous to a traditional HYSA or retirement 401k. The Pool for its native token, Vesper (VSP), is where the magic begins.
Before we dive into the Vesper Pool, let's see the tokenomics and who the founders are.
-First year only: decentralized token emission to users with skin in the game ie Pool farmers, uniswap sushiswap 1INCH LPs, etc
-Token holders govern as a DAO
The builders of Vesper have an established track record with decades of Open Source software experience and have worked closely with Satoshi in the early Bitcoin days. Most importantly, the builders have a long term first approach. Vesper was conjured with the fundamentals of modularity, simplicity and security which naturally fosters continuous innovation and platform enhancement. For instance, the current Pools on the platform are conservatively rated. Aggressively rated pools are being built and outside developers are incentivized to contribute their own yield strategies for a 5% performance fee override (with the other 95% back to the Pool farmers). Partnerships with hedge funds are being entertained by the DAO to serve as their crypto 401k.
Now for the magic of the Vesper Pool: the yield earned and distributed daily is not an inflationary handout. Where does the yield come from? The platform generates revenue via 0.6% withdrawal fees and 15% yield performance fees. This revenue then goes to the open market to buy back VSP which is distributed as yield back to Vesper Pool farmers. This cycle generates constant buying pressure against VSP liquidity or supply on the open market.
Again, this is not inflationary yield. It is derived via open market buy back with fees the platform uniquely generates.
Now for some numbers (that anyone can verify because blockchain):
The current TVL is $580m. The average monthly fee revenue over the past 120 days is $3.5m, or $116k daily.
With a current FMV of $11.58 per VSP, the platform buys back ~10k VSP on the open market and distributes amongst the 2.5m VSP in the Vesper Pool.
10k/2.5m is 0.4% daily yield or 147% apy.
In other words, Farmers with more than 365 tokens are earning more than 1 token per day.
The upside from here:
Let's define churn to be the ratio between fees generated daily and TVL.
Then the current churn = $116k fees : $580m tvl or 0.02% daily churn.
If the platform TVL grows to $2b and we apply a 0.02% churn rate the fees generated daily := $400k.
Of the 7m VSP supply, suppose 5m are in the Vesper Pool.
At a (fully diluted) market cap of $500m or $50 per VSP, the platform buys back $400k/$50 := 8000 VSP on the open market.
Distributed as yield to the Vesper Pool, 8k/5m = 0.16% daily yield or 58.4% apy, which is after the token 5x in value.
In summary, the Vesper Finance platform is a self-fulfilling, simple to use platform with incentives for all types of Defi players:
- HYSA for basic crypto hodlers + VSP emission (first 12 months only, inflationary reward)
- organic passive income for VSP farmers (hodlers)
- 5% performance fee override for Pool strategy developers
- weekly VSP emissions for LP farmers (first 12 months only)
Visit https://docs.vesper.finance/ to learn more.
Use https://app.vesper.finance/ to earn more.
