As of June 6, 2024, the Yearn ecosystem has launched a new Ylockers system, which includes the YearnBoostedStaker (YBS) contract and the new V3 automated compound vault. These new contracts are now available for yPRISMA and yCRV. This innovative asset class aims to tokenize locked governance positions in external DeFi protocols through Curve’s voting escrow (ve) model, often referred to as “Liquid Locker.”
How Ylockers work
Yearn deploys a series of smart contracts to enable users to lock governance tokens to Yearn to the maximum extent possible without permission, in exchange for yLocker tokens (such as yCRV, yPRISMA, etc.), with an exchange ratio of 1:1. The benefit of this is that users receive a fully transferable and liquid token while still enjoying the benefits of governance, such as yields or voting rights. Users no longer need to lock up the value of their assets for up to four years!
⚠️ Important note: Liquid locked tokens cannot be redeemed for underlying locked tokens. This is not feasible. But because they are liquid, they can be traded on decentralized exchanges and bought and sold based on market value.
How to obtain income
In the yLockers ecosystem, users can earn revenue in two different ways:
Deposit yLocker Tokens into YBS (Earn Stablecoins)
Deposit yLocker Tokens into an Automated Composite Vault (Earn yLocker Tokens)
Each week, Yearn’s yLockers generate revenue from protocol fees and voting incentives. These revenues are converted into ecosystem stablecoins (e.g., yPrisma’s mkUSD or yCRV’s crvUSD) and distributed to yLocker’s stakers at the beginning of each week via the YearnBoostedStaker (YBS) contract. To start earning your share, you simply stake the corresponding yLocker tokens in the staking contract.
Advantages of long-term staking
In Yearn's yLocker staking contract, long-term users will receive additional income incentives, up to 2.5 times the income increase. You can reach maximum earnings boost within four weeks of depositing yLocker tokens. The staking contract maintains a weight value for each deposited token. The calculation of the weight value depends on the number of yLocker tokens you stake and the duration of the pledge.
Each week (Thursday 00:00:00 UTC), the stake weight will increase by 50 points until reaching the maximum weight four weeks later. To be on the safe side, the reward contract is designed to ignore staking amounts that have not yet reached the 1x boost level (i.e. staking within the first week). At the end of the first week, once the staking weight reaches 100 points, the rewards can be claimed.
Example: Suppose YearnBoostedStaker's maxGrowthWeeks is set to 4 and you stake 100 yLocker tokens. When depositing, your initial weight will be 50. In weekly updates, your weight will gradually increase until you reach your maximum weight.
Future prospects of YFI token: As the core of the Yearn ecosystem, the YFI token’s potential and application scenarios are constantly expanding with the launch of new features. By introducing yLockers and YBS, Yearn not only improves user participation experience, but also brings more liquidity and efficiency opportunities to the DeFi field. As more and more users participate in this ecosystem, the value of YFI is expected to further increase.
in conclusion
Yearn’s new ecosystem revolutionizes the way users interact with DeFi protocols through yLockers and its associated contracts. Users no longer need to lock assets for a long time, but can enjoy income and governance rights through liquid lock-up tokens. With the promotion of this new model, the future of YFI token will undoubtedly be brighter. To learn more about YFI and the Yearn ecosystem, please stay tuned for our updates!