On 6 June 2021, in our blog “ Yieldly’s No-Loss Prize Game: Everything You Need to Know “ we touched on the basics of the YLDY staking pool. We introduced the concept of the fair-time staking algorithm that is hardcoded into our rewards smart contracts.
This blog will go into detail about the math of the fair-time staking algorithm and provide some illustrative examples of what that looks like to a user.
But first, not just another Airdrop. The biggest ever Thank You Airdrop on the Algorand ecosystem.
We recognize that the rapid growth we have had in the past 7 days since launch is a result of our community getting behind the platform, staking, using and providing unprecedented amounts of great feedback.
We have been listening and we have been head down working to make sure we can process, triage, and then implement a lot of the feedback into our platform to make it the best prize game/token offering in the ecosystem.
One thing we acknowledge is that we have not done enough to explain how the rewards system works. As a result, several of our users have had a suboptimal user experience. This is unacceptable for us.
We are sorry for this, and to say thank you for the support we will be doing an aggregate USD$100,000 in YLDY airdrop to all users in the ecosystem who staked ALGO or YLDY in either of our pools before 5pm Singapore Time 14 June 2021. That is to say, anyone who jumped on board in the first week of our launch and who battled through fluctuating rewards and the early stage IDO. We want to thank you for your patience and provide a token of our appreciation for your persistent and valuable feedback.
We will catalogue all the addresses who have interacted with the contracts over the past week and then arrange for airdrop on Independence Day — 4 July 2021 (NYC Time). There is nothing you need to do — we know who you are, and we will airdrop you.
Our early indication is that there are around 2,000 to 2,500 unique addresses which have interacted with either of our pools, so this means around $50 in YLDY will be airdropped into each of those accounts.
We will base the airdrop off the prevailing market price of YLDY at that time. We chose 4 July 2021 as the date as it is one month after our initial release of tokens and will mean some marketing tokens will have vested and be available to be used for this purpose.
We are grateful for the support, and we value every community member’s feedback equally, so this airdrop is not going to be weighted to your current holdings of YLDY or any other proportions. We hope that this goes some way recognizing that we value your feedback and support as we build great products for DeFi and the Algorand ecosystem.
The rewards system now and going forward
We also recognise that the UX on our rewards system can improve to make it more user friendly. We are taking steps internally to update the UX. For now, let us recap on how the rewards are calculated and how they can be withdrawn.
YLDY has an initial staking rewards reserve of 3,000,000,000 YLDY. After each prize game draw, 0.70% of the total amount of YLDY in the staking reserve is sent to the global rewards pool.
Every 24 hours you keep your ALGO and YLDY staked, you earn the ability to claim some of the global reward pool.
The actual amount a user can claim is dependent on the following six factors:
- how many YLDY a user has staked;
- how long a user has staked for;
- the total amount of YLDY other people have staked;
- how long other users in the pool have staked for;
- the amount of rewards already claimed in the global rewards pool; and
- how often people are claiming and restaking tokens.
The rewards formula
The following are the exact formulas used for YLDY rewards, which we derived from the Ampleforth Token Geyser reward . This is a tried and tested method for time based rewards. The two material differences between the Ampleforth method and the method currently implemented by Yieldly is that: firstly Ampleforth allows for time share per seconds whereas we are currently limited in TEAL to do timeshare per day; and secondly Ampleforth release rewards more regularly whereas Yieldly does it weekly (we will work to make rewards more continuous as the tech allows).
The three key formulas are below:
- Rewards Claimable For User = (User Staking Shares / Global Staking Shares) * Total Reward Unlocked
- Global Staking Shares = ((Current Block Timestamp — Global Time) /Time Period) * Global Amount.
- User Staking Shares = ((Current Block Timestamp — User Time) /Time Period) * User Amount
Each parameter is defined below.
- Global Staking Shares: Total amount of shares accumulated from all users inside the pool.
- Global Time: Time since the user has either staked, withdrawn or claimed.
- Global Amount: How much everyone in the pool has staked and withdrawn.
- Total Rewards Unlocked: Claimable YLDY from the prize game and staking pools.
- User Staking Shares: Each user’s personal staking shares in the pool (requires a full 24 hours passed to update).
- User Time: Time since the user has either staked, withdrawn or claimed.
- User Amount: Net amount the user has staked and withdrawn.
Why is the number of rewards claimable fluctuating?
If any of the six factors outlined above changes, then that will have a direct impact upon a user’s claimable rewards.
- As more people stake, more people are earning the ability to claim from the global reward pool. Every 24 hours, the amount of rewards you can claim in the global reward pool will fluctuate as a result.
- If the TVL increases, as we have been experiencing, then the amount of rewards you can claim will decrease until the next prize game draw and more rewards are sent to the global rewards pool.
- If you wait and decide not to claim, you are accumulating a bigger proportion of the global rewards pool. This means that after the next prize game draw, and more YLDY is sent to the global rewards pool, you will be able to claim a larger amount of YLDY.
Claiming rewards every week on the day the rewards are sent to global reward pool
If you claim your rewards each week in the 24 hours after a prize game draw, you can then choose to stake the rewards and compound your return.
Please note that these numbers are hypothetical and used for demonstration purposes only.
In the first week a user stakes $10,000 ALGO. The TVL for the week is $1m ALGO. Over the course of this week, the user earns the ability to claims 1% of the global rewards pool.
In the second week, the user keeps their $10,000 ALGO staked. More users have staked and the TVL has increased to $2m ALGO. Over the course of this week, the user earns the ability to claim 0.5% of the global rewards pool.
If the user decided to claim immediately after week 1, then they could claim 1% of the global rewards pool.
If they decided to wait and claim immediately after week 2 instead, then they could claim 1.5% of the global rewards pool. I.e. the percentage proportion of the global rewards pool accumulates.
The upshot for a user is that they will be able to maximize the rewards if they claim them each week in the 24 hours after the rewards are distributed from the staking rewards reserve to the global rewards pool.
Based on feedback, over the course of the next week we will update the UX to better reflect how the rewards system works. We will also look to update the regularity of emissions from the staking rewards reserve to the global rewards pool so its not just once a week.
What is the APY displayed on the site?
The APY displayed is based on the total number of rewards being distributed to everyone staking. It is a ratio based on the total value staked vs the total value of the rewards. APY is calculated as per the pool. It assumes a user claims rewards day 1 (after prize game draw) and then day 8 (after next prize game draw) and so on and so forth. Or alternatively that they claim on day 8 only (with the caveat as shown in the example above).
Individuals may experience different APY’s based on when they choose to claim their YLDY rewards.
Thank you for your continued support.
Originally published at https://yieldly.finance on June 14, 2021.