DeFi Yield Protocol (DYP) liquidity providers are now earning roughly 33.9 ETH per day, or around $25,000 worth of the second-largest cryptocurrency by market capitalization, by staking their DYP tokens.
DYP is a unique protocol that allows virtually any user to provide liquidity, earn DYP tokens as yield while maintaining the token price. Unlike some DeFi user interfaces, the DYP interface is quite simplified, accommodating new and expert yield farmers.
The protocol’s staking and governance decentralized application is now live and, according to available data, over $44 million worth of cryptoassets have been locked by liquidity providers on DYP across five participating pools:
DYP’s smart contracts are all audited by PeckShield and Blockchain Consilium, with checks powered by the CertiK Foundation running as well. These audits help prevent exploits from bad actors by ensuring that no vulnerabilities are present in the contracts.
In the first nine days after the staking and governance decentralized application was launched, liquidity providers earned a total of 231.6 ETH, worth over $150,000.
Holding DYP tokens allows users to participate in governance and vote to add additional liquidity mining pools, burn tokens, or allocate DYP toward grants, strategic partnerships, or other initiatives.
Notably, DYP liquidity providers are rewarded not in DYP or on the assets within the participating pools, but in Ethereum for the first time. This ensures price stability for the token and greater security for users through the integration of anti-manipulation features.
The price volatility for the DYP token is reduced via the platform’s smart contract, which at 0:00 UTC converts all liquidity pool rewards from DYP to ETH automatically, and distributes the rewards to liquidity providers.
The conversion maintains price stability, but if the price of DYP is down 2.5% or more at the time of the conversion, the maximum amount of tokens that will not affect the cryptocurrency’s price will be swapped for ETH, leaving the remaining tokens to be distributed the following day.
If for seven consecutive days there are undistributed DYP rewards that cannot be converted into ether without affecting its price, the DeFi Yield Protocol governance kicks in. Voters will choose whether they want to distribute the DYP tokens to token holders or burn the tokens that could not be swapped.
Burning tokens, it’s worth noting, removes them from circulation and is believed to benefit every DYP token holder, and demand remains the same but supply drops.
This mechanism, it’s worth noting, also prevents token price manipulation by removing the incentive. Whales and other large players lack an incentive to manipulate the price of DYP, as the rewards are distributed in ether – the second-largest cryptocurrency by market capitalization.
The Ethereum Network’s growing size has a corresponding need to keep on mining on the network. The DYP team is committed to supporting Ethereum mining for more than three years and have invested in their mining farm.
To reward users, every ethereum miner address that interacts with the DYP smart contract will earn a monthly bonus of 10% in DYP of the ETH income earned monthly. Essentially what this means is; if ETH price is $400 and DYP price is $2, if you earn 1ETH monthly, you also get a monthly airdrop of 10% (20 DYP tokens worth $40). To claim the airdrop tokens, users will need to join their Ethereum mining pool with a 0% fee, meaning users will also earn more monthly.
DYP also has an automatic earn vault that moves a participant’s funds around using the best yield farming strategies. The automatic earn vault will distribute 75% of the earnings among the liquidity providers and 25% to buy back DYP tokens. Ultimately this promotes liquidity in the pool and maintains the price of the token.
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