AMA with Tim, Jan Strandberg, and Justin Wright from Yield
On Wednesday the 18th of November, the DuckDAO community had an AMA with Tim, Jan Strandberg, and Justin Wright from Yield.
Yield — A Summary
“Invest in a Simpler DeFi”
YIELD aims to eliminate the complexity of DeFi by offering a product that allows everyone to benefit from this new financial system. In times of unprecedented economic turmoil, they intend to establish a safe haven for investors and savers built on these new decentralized financial tools, and make them as accessible as traditional savings accounts and investment packages — if not more so.
With YIELD, you simply deposit assets, select a fund, and earn high returns based on proven, hedged, and insured investment strategies.
Other features:
- Earn 10% APY Guaranteed (Up to 20% with $YLD tokens). With no gas fees and daily interest, Yield is able to offer you significantly higher returns than traditional savings accounts.
- Use Cash or Crypto. Forget about swapping assets and paying fees before you even start investing — With YIELD, you can deposit and withdraw funds 24/7 using your bank account, debit card, or crypto wallet.
- Stay Secure. YIELD operates under a banking license, and is managed by crypto professionals & cybersecurity specialists with years of experience in FinTech. In addition to their audited security infrastructure, all assets are protected by the YLD Insurance Fund.
- The $YLD Utility Token. Enjoy exclusive benefits — Boost your APY up to 20%, earn interest on your tokens, and enjoy voting rights in governance decisions.
Website: https://www.yield.app/
LinkedIn: https://www.linkedin.com/company/yieldapp/
Telegram: https://t.me/yieldapp
Twitter: https://twitter.com/yieldapp
Reddit: https://www.reddit.com/r/Yield_App/
Participants:
Yield — Tim Frost — CEO
Yield — Jan Strandberg — Marketing & Growth Lead
Yield — Justin Wright — Finance and banking Operations Lead
DuckDAO — Limmy — DuckDAO community representative
Please note that the following summary has been edited for clarity.
Limmy
Welcome everyone to another DuckDAO AMA.
We are joined today by Tim, Jan Strandberg, and Justin Wright from Yield. On behalf of the DuckDAO community, I’d like to welcome you to our channel.
Justin
Thanks, happy to be here
Jan
Thank you duckdao for having us here and eager to take this partnership to the next level 🤙
Tim
Hello everyone
Limmy
Okay, let’s get this started shall we.
As always, our first question will focus on yourselves, rather than your project. Could you please tell us a bit about yourselves — What are your backgrounds/experiences and how did you find yourselves in the crypto space?
Justin
Sure, I have spent most of my career in capital markets and fund management before moving over to Fintech. This is my first venture in the crypto space. I have spent the last 6 years building out Beehive P2P, the largest SME P2P lender in the Middle East and having been introduced to DeFi by Tim and seeing the potential to really take crypto to the mainstream, I jumped at the chance to be part of the founding team.
Tim
My name is Tim and I am CEO of YIELD.
I have a rich Fintech, marketing, business development, and operations background. YIELD.app is my 3rd digital bank and I have been a key figure with many successful fintech and blockchain companies. Specializing in early-stage growth, operations, and development. I was part of the founding Wirex team and supported operations, business development, and marketing for the first 18 months. I also joined and helped take EQIBank to market a global digital challenger bank with an average client AUM of $250,000. I have helped accelerate early-stage blockchain startups QTUM, NEO, Paxful, Polymath, Selfkey, Everex, and many others.
YIELD is a licensed and regulated FinTech company that enables anyone to invest in decentralized finance with the touch of a button! Thanks to our intuitive app and web platform, users around the world can start earning returns from DeFi products without having to go through a lengthy, complex and often costly learning process. Our users earn around 15% APY through our DeFi strategies on the backend.
We are backed by:
- https://www.alphabit.fund/
- https://bnktothefuture.com/
- https://digistrats.com/
- https://www.palcapital.com/
- https://www.yeomans.capital/
- https://chronosvc.com/
Jan
Being a growth hacker, digital nomad, and creative thinker, I handle digital marketing for YIELD. I’m data-driven and have extensive experience in branding, PR & SEO. I’ve helped successfully scale-up companies in the sphere and I was the head of marketing at Paxful, which I scaled up from 50 000 users to more than 4.5 million and from revenue aspect from less than 100k$ weekly volume to more than 45 million in weekly volume.
I’ve also been involved in the gambling industry and own also a successful marketing boutique agency.
Happy to be part of the founder’s team here at YIELD
Limmy
Ok fantastic guys. A nice mix of traditional market experience and crypto knowledge. It’s always a little sketch when it skews too far to one direction haha
1. The current market has experienced rug pulls, DDos attacks, the recent harvest.finance attack, just to name a few. New types of attacks are facing DeFi Projects each day, leading to Investors getting burned.
Can you please state clearly what security measures YIELD has in place to guard against such occurrences and boost confidence amongst investors?
Justin
We are bringing a traditional enterprise and portfolio risk management approach to this asset class. This covers off-chain business processes and security, coupled with technology stack
We also have industry leading experts in their fields such as data security consultants who are supported by our various oversight, enterprise and risk management committees.
We continuously evaluate and identify critical systems stress points and test stress test these alongside market related scenarios to mitigate and remove points of failure across our operating environment including DeFi instruments held in our portfolios.
Limmy
Are you utilising external audits as well as internal?
Justin
Yes
We will undertake regular audits across all business units as a licensed financial service provider alongside smart contract auditing of the investment opportunities.
Limmy
Ok thanks Justin — that’s a pretty comprehensive list of checks
2. The following question may seem strange, but I think it is still relevant because this thought was one of my first after I noticed the yield.app project.
Since the beginning of this year, the term “yield” has developed into a nonword/nonsense (albeit a profitable one) for many, and the term has a relatively negative connotation due to various events over the past few months. How did this choice of name come about and are there any fears or concerns on your part that this could lead to a handicap in terms of marketing, especially when it comes to the launch?
Jan
YIELD differs from other platforms in that it was designed to enable anyone, including people who have never even heard of Yield Farming, to invest in Crypto and benefit from DeFi’s incredible opportunities. This is accomplished by accepting both traditional currencies and stablecoins, which means that our users can use their bank cards without having to manage crypto assets, and with a simplified interface where you’re only required to select the investment plan of your choice.
We understand that the name can bring a lot of different negative sentiments but the name actually tells already what we are trying to do. I also would argue that this name is super catchy and the marketing material we can produce with the name itself can bring a lot of value when going into the retail market
Also, despite the noise in the market about the YIELD name being used everywhere, it still brings a little fuzz around it. I wouldn’t see it as a problem
Limmy
Fair enough!
Jan
Btw — we forgot to send a picture in the beginning:
Instead of you doing all the Audits with the smart contracts and also having to have a big portfolio with these gas fees, we make all this way simpler and far less costly.
Sorry, just wanted to add this! 🙏
Limmy
All good — having it explained graphically certainly helps. The consolidation of the user’s actions for Defi is definitely a great selling point too.
3. I see the wallet allows you to use either cash or crypto for transactions. How are your rates for conversion calculated? It says there are no fees for swapping assets, which is great, but are the conversion rates the same as market rates?
Tim
We are accepting stablecoins as deposits with the first launch and in January the first fiat deposits. The rates depend on where you send money from, but they are competitive in the industry. There are no gas fees and this is correct. We do this because we batch transactions and operate as a managed fund.
Limmy
4. A big selling point for me is that the site says “Your funds are insured”. This is big as there have been many exploits these last few weeks with millions lost. Can you explain a little about the insurance and what investments may be covered?
Tim
We diversify and self insure the platform. Initially YIELD will be insuring the platform and guaranteeing a return. We also take a 1% fee on all revenue and aggregate this into an insurance pool. This pool will turn into an insurance product to insure our users and positions. The nature of our business is that we have built a portfolio management system and never risk capital to anything not audited and approved. We allow our clients to invest as little as $100 and this is invested into many positions.
So yes we do insure the platform, and our approach is to make sure there is never any positions that are not completely safe.
Limmy
Right, so diversification is key here
Tim
It’s one of the major keys.
Justin
Coupled with the insurance provisions, we will be innovating around this as we grow as well to mirror more traditional protections, similar to an FDIC scheme
Limmy
Your previous question has in some ways answered the next one but:
5. Where does the YLD Insurance Fund allocation come from & is it transparent (viewable on-chain?) Are there any plans to seek further insurance from a regulated insurance company outside of the yield ecosystem?
Justin
We will be operating a transparent model and as part of this will be publishing regular reports and audits amongst other key metrics for our users.
Tim
There will be an address, and as Justin said we will be publishing reports. In 2021 we will be working with Insurtech companies on how to insure our platform more broadly.
Limmy
Partnerships, partnerships :)
Will they be in the traditional space? Or can you not say due to NDAs etc.
Tim
We are talking to both blockchain insurance tech and more traditional. Until things are concrete we cannot really disclose which ones.
Justin
We are targeting a global audience from day 1, we are already working with and continuing to build out alliances with other professional actors in traditional finance and the DeFi space. Some of these are technology led, all of them are knowledge driven with the aim of constant improvement and to pass the benefits back to our customer’s
Limmy
We look forward to those announcements in the coming months then
6. Who becomes the custodian of our funds when we deposit them and whom is the YLD insurance fund insured by?
(We had a lot of insurance questions)
Justin
All funds are held between hot and cold wallets in Bitgo insured wallets once they are deposited. These are aggregated into our deployment wallets that have been built in-house as part of the portfolio management system for allocation into our fund strategies.
The 1% APY insurance pool (tertiary tier 3 capital) is segregated and audited.
Limmy
7. There are different types of lending and credit platforms within the DeFi space. These projects employ different strategies to allow users to borrow from and lend to each other with no central entity involved. This means that Know Your Customer identification or paperwork is not required.
YIELD provides a platform that bridges traditional and decentralized finance, so would this mean that YIELD runs with a central authority? Does that mean Yield loses the biggest advantages of DeFi?
Justin
We are CeFI on Defi; the bridge we are building allows us to participate and benefit from the available opportunities in the deFi space whilst providing safe custody and a simple familiar front end to our customers. We have a team of analysts, quants, portfolio managers, and developers that maximise the returns we can create balanced against the lowest risk to achieve these.
Limmy
8. Why is the yield token necessary? Coinbase has been operating for many years and they have not implemented any token. What can we expect from the yield token?
Tim
With our token which has an updated utility model coming out Monday, users can raise their APY from 10% to 20% by holding a certain level of YLD tokens. We also use 50% of our profits to rebuy the token from the market for liquidity rebalancing. YLD gives you access, and increases your APY. We have modeled our token model after successful similar companies in Celcius and other successful fintech companies and built in strong velocity and utility to bring the real value of the platform.
Justin
At launch we will be targeting users familiar with crypto as we build out our fiat rails and banking features, we want to reward these early adopters through our token program and will continue to evolve this as we grow.
Limmy
That makes sense — those who are already familiar with DeFi will have no trouble at all hopping onto your platform
9. How are you able to guarantee us 10% APY +50% of any additional profits, and on what assets are these profits and APY guaranteed. Is it all the assets that are integrated on your platform or some and are we paid these profits in kind or in the YLD token?
Justin
The 10% APY guarantee is on USDT/USDC and will be paid in the same tokens. The updated tokenmodel being released monday will include higher APY guarantees to include $YLD
Limmy
Ok cool — so we just need to sit tight until Monday and we will have more details around the rewards and token utility
Tim
We are releasing an updating utility model on Monday. We are guaranteeing a 10% APY in stablecoin and up to 10% APY extra in YLD. We can do this because we perform higher with our portfolio. We use 50% of net proceeds to rebuy YLD and treasury management.
Justin
We will also add other assets as we move past launch
Tim
We can answer everything now. Just waiting on official approval from lawyers. We think you will be excited by the updated model. We have had some great token economists working with us.
Limmy
I won’t make you break any red tape don’t worry lol
10. Yield farming has come to stay in the DEFI space, please tell us how $YLD compares to many yield farms offering high APY on liquidity staking, and why would crypto investors pick it over other yield farming opportunities?
Tim
We are a fintech and digital bank that offers DeFi to our clients. We are making DeFi easy for the casual user who wants to earn high yields and wants to do it safely. We aim to be a digital banking front end with lucrative investment accounts that are powered by DeFi. In a world of negative interest rates we aim to be a digital bank that offers more to our clients. We see DeFi that will be a major part of the future financial system and we will be a bridge from the traditional financial world to DeFi.
Justin
We are building a sustainable multi-year project, as part of this, we’re building IP in our service delivery model alongside our tech and trading expertise which builds trust. Through institutionalising the asset class, we can offer it to non-crypto investors and other savers alongside those who want to remove the stress of managing their own portfolio or those who lack sufficient capital to trade directly and employ the strategies we can in order to maximise their returns.
Limmy
So basically, you guys are aiming much higher, have a grasp on the regulations and licenses required, and will provide traditional methods and instruments that say… a simple smart contract for vegetable farming does not?
Justin
Exactly!
Limmy
👍
11. In its paper YIELD defines “The Problem” as economies of scale, and the solution as both aggregation of thousands of users’ capital, and the employment of automated monitoring and maneuvering logics, inspired by algorithmic-trading principles.
Do you think that economies of scale may also cause large amounts of capital to sometimes experience a different type of inefficiency in the form of unfavorable price movement (similar to the price movements that were exploited in the recent Value DeFi protocol hack, or as seen in a bonding curve)? Does the “automated logic” use oracles for data points? Is it based on technical indicators, or on something more relevant to yield farming?
Justin
That’s a lot of questions in one — bear with us.
Limmy
Yes it is sorry — it’s a bit of a hairy question but we like to make our guests sweat a bit haha
Tim
We want to bring DeFi to millions of people. For us the high gas fees are not an issue. We have a fund management license and manage investments in a more traditional fund management approach. With our approach users can invest as little as $100 into DeFi that you could not replace our strategy with less than $100k.
Justin
A key part of our approach is diversification, as part of this and the underlying analysis of opportunities, liquidity is an important consideration where it is measured to understand the limitations for dynamic hedging. we analyse and measure the impact of our allocations against TLV and in some cases can take advantage of our liquidity where we work closely with protocols as they launch subject to vigorous assessments of these opportunities
Justin
With respect to impact on performance, out portfolio team monitor alongside out portfolio management system, metrics that include time since launch of pools and their relative value since last code updates, in effect when they become honey pots and vulnerable to attack
Limmy
Nicely handled
12. This one is a bit of a combination question again sorry ;)
“With YIELD, you simply deposit assets, select a fund, and earn high returns based on proven, hedged, and insured investment strategies.”
Taken from a statement said in your pitch can you please explain your investing strategies to hedging investments to gain high yielding return?
Hedging as I know it is a risk management strategy employed to offset losses in investments by taking an opposite position in a related asset. The reduction in risk provided by hedging also typically results in a reduction in potential profits. Hedging strategies typically involve derivatives, such as options and futures contracts can you share your strategy or is it proprietary?
Justin
To simplify this, the first fund (of many) is going to be relatively vanilla as we complete the build out of our portfolio management system. Our strategies will cover many areas as we grow, these include dynamic hedging against impermanent loss, multi asset backed farming and building our own vaults, automated funding rate arbitrage etc. Depending oni the complexity and associated risk, we plan to offer different funds and relative returns subject to the sophistication of the users and the associated risk
We will always run a master fund that safe and steady and designed for mass adoption
Limmy
And as you’ve said before, users using your platform won’t have to worry about the details about risk management — this is all done for them. Very cool.
13. If there is adoption in the future away from the (“only”) crypto area, the following problem arises for me in terms of the design of the project as DAO in it’s organizational form:
Can a large number of “average” people (Who may have little or no knowledge) represent a risk in relation to governance? Are there any processes planned to counteract this?
Tim
This is another update on the governance of YLD that is coming this week. We have seen the issues with many governance tokens. We are mutually aligned with our platform users. In the end they want to maximize their investments and this is what we are giving them. So we now offer up to 20% APY and use 50% of profits to rebuy YLD. With requests of our supporters we have made the upgrade in utility.
Limmy
Ok thanks Tim.
We now move onto a segment of questions focused around regulation and licenses.
14. Recent happenings have given rise to regulators tightening their grip on exchanges. A little research shows that Yield’s proposal is to create a bridge between cryptocurrencies and fiat. Are there licenses you need to obtain for this type of operation and how do you guide against money laundering?
Justin
For AML, this is a standard and minimum requirement whereby we work with industry leading reg-tech providers to strike a balance between over aggressive and cumbersome KYC and a frictionless on-boarding joinery for our users…
Most regulators are looking for professional service providers that employ best practice and are also best positioned to educate and drive the licensing regime rather than fight it, something our team is very experienced with.
Tim
As crypto moves to more mainstream so much of the industry will be regulated. We have acquired an offshore banking license and fund management license. So from launch we are completely focused on building a digital banking platform to bring in millions of users and be compliant. For myself, this is my 3rd digital bank, and Justin has started multiple successful regulated fintechs. Even though this is DeFi, the bridges need to comply with regulations. Our team again handles all the complications.
Justin
Aside from having obtained the initial offshore banking, securities and fund management license that Tim mentioned, we have a roadmap for continuous licensing approvals, typically, it takes time to reach multiple jurisdictional regulatory approvals so in that respect we are setting out our intentions from the start and will continue to add licenses as we go for all of our activities with a mix of tier one and tier two regulators globally
Limmy
15. With Yield, users can directly withdraw and deposit to Bank accounts, credit cards or crypto wallets. This is a great feature but have you already secured agreements or partnership with banks/credit card companies, and filed for licenses with regulators?
I believe a lot of that has already been touched on, so I think we can move on to the next question
16. Some would say that the hype around DeFi seems to be over. What are the strategies that you are employing to make your DeFi solution unique enough to survive for a longer period of time? What are the benefits you provide that aren’t covered by other DeFi projects yet?
Justin
With any new asset class there will always be hype regardless of being crypto or not, IMO we are seeing multiple new iterations of traditional financial products being replicated in the space and we believe we are only at the start of a multi-year journey.
I have traded through and experienced multiple bull and bear markets across many different asset classes and each time they fade they come back stronger, safer and more sophisticated. YIELD.app will be at the forefront of these changes and trends with our customers’ interests front and centre. All investments find a natural floor for risk weighted return, and we believe its wholly conceivable and highly likely that for DeFi this will be above 10% expressed as APY without the added increase that can be achieved through sophisticated management strategies
Limmy
17. Will you only offer your own DEFI solution or will you offer access to established DEFI applications as well via your Easy to Use app?
Justin
Users will always come through our application, we are in discussion with as mentioned earlier, a number of different participants in the ecosystem and will continue to seek ways to offer benefits from these collaborations through YIELD.app. Some of these may be achieved at the portfolio level, others through specific product opportunities unique to our platform.
Limmy
18. DeFi has created a wave of trends that has contributed to market recovery. At the same time, Yield Farming has provided an avenue to help individuals increase their profits.
Token inflation however, will start to happen in the near future so what do you think the impact of this will be to Yield? Will this avenue for profit be degraded in the coming months/years?
Justin
The market is in its infancy and there are a multitude of competing factors that will impact the longer term outcomes, part of this is linked to wider adoption from mainstream financial services players and investors, at the same time, the underlying premise of DeFi mirrors traditional established capital markets and is supply/demand driven, there will be growing pains, however provided the fundamentals driving the market in the first place remain solid, token inflation can be further supported through new entrants and ideally participants that are bringing legitimacy and stability to the sector as a whole
Limmy
Right, so in broader terms, as the market grows and more people are attracted to your platform (and crypto in general), this risk is lessened
Justin
it’s not going to be a straight line but the omens are positive
Limmy
Wow so we’ve hit the 2 hour mark on this AMA — this is by far the longest one we’ve ever done haha. We also had the highest number of questions submitted — more than any AMA we’ve done in the past. I guess this means you guys are doing something right haha
Thank you guys so far for the excellent answers you’ve given to our community questions so far.
Justin
A pleasure!
Limmy
Unfortunately, we are out of time for the final burst of community questions, but I would encourage all here to check out the Yield TG channel and have a chat with the team there https://t.me/yieldapp
Justin
We are always available and always happy to answer your questions, hoping today’s session was informative
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