The Real Yield Protocol may become an important option for DeFi investors.
Written by: Jack Niewold
Compilation: Deep Tide TechFlow
Here's an introduction to how several cryptocurrency projects are realizing real returns: ARC, Pendle, Liquity, FactorDAO, and Radiant. These projects use different mechanisms to allow investors to participate in the agreement to obtain actual benefits. At a time when DeFi is becoming more and more popular, these real income agreements may become an important choice for investors.
1. Arcadeum
$ARC is a project that took GMX's $GLP model and ported it to the entire GambleFi ecosystem: a truly decentralized casino. Their products include:
- sports betting
- poker
- Roulette and other casino games
- 1000 times leverage trading
It's worth noting that Arcadeum's "real payoff" is their ALP mechanism, which allows you to provide liquidity to the casino itself:
This gives Arcadeum LPs a guaranteed advantage:
- GLP actually depends on traders not being profitable on average
- ALP guarantees returns
Their announcement of trading perpetual futures with up to 1,000x leverage got a lot of attention, but from a real yield standpoint, it just meant more liquidations.
This caught the attention of Crypto Messiah, as well as other anonymous DeFi whales, who were all buying $ARC.
2. Pendle
Pendle is a fixed rate agreement that allows you to sell future earnings.
It has two counterparties:
- Yield Sellers: Get discounted ETH today by selling future yields at a fixed price.
- Yield Buyer: Speculate on future yield by trading GLP/ETH yield.
Since future earnings can be instantly converted into the underlying asset, I consider this a "real yield" protocol.
You can speculate on the movement of GLP fees, or buy ETH today at a discount.
Depends on your view of the market and personal risk appetite. If you believe that the GLP fee will rise in the future, you can choose to hold future income rights. And if you prefer asset liquidity and cash flow, then you can choose to buy ETH at a discounted price.
3.Liquity
After a wild week for stablecoins, it's clear we need an alternative to USDC/USDT. Take advantage of $LQTY, a cash-earning project for token holders with an ever-increasing issuance of its stablecoin $LUSD.
$LUSD, Liquity's stablecoin, has performed well despite the volatility of the stablecoin market and has remained decentralized and uncensorable. The protocol is designed so that various stakeholders in the ecosystem must pay LQTY holders:
- Borrowing costs
- liquidated excess funds
4. FactorDAO
In traditional finance, approximately 66% of funds are actively managed, generating billions in fees each year.
But in the cryptocurrency space, most funds are not actively managed:
Factor DAO is an attempt to redesign the way money is managed in cryptocurrencies.
Despite the high fees of active management, these funds are very popular because the best funds outperform the rest. Factor DAO earns stakers by:
- Get a share of the agreement fee
- incentive/ bribe
5. Radiant
Radiant is a full-chain money market that operates effectively as a bank:
- Depositors earn interest from borrowers
- Borrowers seek capital from lenders across different chains
Overcollateralization is probably the easiest form of borrowing.
Interest rates fluctuate based on the demand for borrowing on a particular asset. As an RDNT holder, you can obtain real benefits in the following ways:
- Borrowings
- Platform fees
- Imposing fines on those who unstake immediately
They paid over $6 million at a market cap of just $69 million.
In the cryptocurrency space, some narratives are long-term (real returns), while others represent only rapid capital rotation (AI coins). Due to the success of Real Yield Protocol and the push for a more sustainable DeFi, I believe Real Yield Protocol is here to stay for a while.
