According to raw data, Lending currently forms the backbone of decentralized finance (DeFi). DeFi Pulse shows us that the top three DeFi protocols by means of total value locked are all focused on providing lending/borrowing solutions:
With this in mind, and conscious to make the most of alternative, innovative platforms to maximise my returns, I’ve spent quite some time exploring various options outside of these big three, and a while back I stumbled upon Yield Credit. I don’t plan on repeating everything I’ve written on the topic, but a quick summary of this project would be:
A decentralized lending protocol, offering individualised loans with fixed rates.
Yield offers higher interest rates to lenders than those typically available on existing markets, whilst incentivising and offsetting borrowers’ costs with the return of the YLD token at a rate proportional to the cost incurred.
For those keen to learn more, I’ve added a few reference articles to the end of this post, though in this entry I’m going to focus on the YLD token, its comparative benefits in holding, and how to get your hands on it. Before that, let’s answer a couple of important questions.
What is the YLD Token?
YLD is built on the ERC-20 protocol standard and it’s the native token of Yield.Credit. You can store it in any ERC-20 compatible wallet (Eg. MetaMask, Trust, Portis etc.)
As a quick aside - It’s worth noting YLD is a utility token and it does not provide any governance rights. There’s a huge debate on whether governance tokens in the DeFi space are more valuable but my personal opinion is that, at this moment, decentralised governance is nothing but a fad. A closer inspection of the vast majority of protocols with decentralised governance (there are exceptions, of course) will certainly reveal t a massive concentration of voting rights amongst a select few established individuals, calling into question the very claim these protocols are decentralised at all.
Benefits of Holding YLD
YLD has minting and burning functionalities - borrowers are incentivised through YLD tokens (minting), and ALL the protocol fees associated with each loan go towards the buy back and burn of YLD tokens.
In the near future, users will also be able to stake YLD tokens to receive sizeable benefits such as:
Up to 0.25% discount on the fees
This in turn brings other advantages. Since the borrower’s reward is dependent on the interest they pay, the discount essentially increases the amount of YLD they earn for the same amount of interest and principal.
-2.5 to -5 reduction in liquidation ratios
As little as this may seem, keep in mind that the difference between being liquidated and being safe is <0.1%. With this in mind, the reduction definitely adds up and offers a lot more protection in volatile market conditions.
Growth Potential
I know this is in the realm of speculation, but hear me out. YLD is the native token of a very promising decentralised lending protocol that’s still flying under the radar.
We’re in a raging bull market and with the constant money printing on behalf of major governments, it’s constantly refueled and propelled to push forward.
DeFi lending is arguably the hottest topic in DeFi (aside from NFTs, but please don’t get me started on these). Yield.Credit offers some inherently valuable advantages to each side of the lending process:
- Lenders enjoy a fixed rate instead of a floating one, which usually trends to zero!
- For the very first time, borrowers are incentivised to borrow!
- Vastly expanded number of coins that can be used as collateral!
- User-friendly dApp interface that’s pretty foolproof!
I can keep going but if you haven’t read my previous articles, feel free to do so to uncover a lot more benefits.
At the time of press, YLD sits on a market cap of around $26 million. Its competitors in the face of Aave ($5.1 billion) and Compound ($1.9 billion) are an example of where it may go. I’m not saying it will, I’m just saying that even if there’s an off-chance of it taking a small percentage of the current DeFi lending market valuation, this could be a very prosperous call.
Here are my reasons for being rather confident:
- The team has so far delivered on everything it has set out to deliver.
- The development team has done a splendid job implementing everything as promised.
- A great, functional, and easy-to-use product with an actual use case and huge potential.
Couple these with the current market environment and how hot DeFi is and… well… you make your own calls, after all.
How to Buy YLD Tokens?
Buying YLD tokens is pretty straightforward, but please don’t make the mistake of doing it through Uniswap - the liquidity is on SushiSwap and you won’t have to worry about high slippage.
Basically, go to the SushiSwap DEX and connect your wallet. SushiSwap supports a range of wallets and if you have your METAMASK set up, you are good to go.
Simply input the contact address in the swap interface and execute the exchange.
The YLD contract address is: 0xdcb01cc464238396e213a6fdd933e36796eaff9f
However, you know the saying - don’t trust, verify! Here’s the etherscan, as well as the CoinGecko page where you can double-check the above address.
How to Stake YLD in Onsen
If you want to put your YLD to work and you’re not afraid of impermanent loss, you can also stake your tokens in SushiSwap’s liquidity mining program Onsen.
Here’s a detailed infographic on how to do that step by step:
Conclusion
With this, I conclude my guide on how to buy YLD tokens. I hope you guys enjoyed reading it and if you did, don’t be afraid to smash the like button.
Also, if you have any questions, you can ask directly in the comments section or join the official Telegram discussion group of Yield.Credit here.
In addition, you can also check the following for more information on the project itself:
Official website: https://www.yield.credit/
Official Twitter: https://twitter.com/YieldCredit
Introduction article #1
Disclaimer: None of the above should be considered financial advice. Investing in cryptocurrencies carries serious risks of capital loss. You CAN lose all of your money. Never invest more than you can afford to risk. The above is for educational and entertainment purposes only.
