Smart Yield is an innovative, world-first platform which aims to simplify the process of DeFi field farming, drastically reducing the amount of manual work on the part of the investor whilst reducing the various risks of loss that come with investing in these high-volatility assets/pools.
For those who may be unfamiliar, yield farming is the process of continually moving crypto between farms on multiple de-fi platforms, to take advantage of the best rates while they are available across the entire de-fi space. DeX platforms will frequently offer great APY rates to encourage people to provide trading liquidity to certain currency pairs, however these rates don’t tend to last long and are often only available for smaller, less liquid tokens which come with a significant risk of impermanent loss (if you buy a token to add liquidity, and the token drops in price, you may lose more than you make back in yield). There is the additional risk of providing liquidity to a token which subsequently proves to be a rug-pull or other type of scam.
Smart Yield mitigates against all of this, by automatically spreading deposited user funds around a selection of different farms, limiting exposure to any one poll to only a small percentage of the total invested pool of tokens. This removes the manual process of buying tokens, adding liquidity, staking LP tokens, selling the returned rewards, withdrawing LP and moving to a new farm, whilst also allowing this process to happen across many different pools simultaneously. Additionally, these farms will be chosen from a list of tokens/exchanges which have already had their contracts audited, minimising the risk of investing into a pool that turns out to be a rug.
The funds will be spread across a mixture of low and medium-risk pools, along with one or two high-risk/high-reward pools to bring the average API up overall without increasing the risk profile of our portfolio to an unacceptably high level. The list of farms will be changed automatically as yields increase/decrease, to ensure we are always invested into the best paying farms in the low/medium/high risk categories. Over time, the number of farms in our pool will increase, allowing us to scalp the best rates available and boost the overall returns to investors.
Yield farming will never be a zero-risk investment and there will always be the possibility of lower-than-expected yields or loss, but with Smart Yield we can reduce these risks and create a steadier, lower-volatility return than is possible anywhere else.
Great… so how does this make my SENSI go up in value?
Good question. And the answer is two-pronged. Firstly, Smart Yield has a function which takes a percentage of the BNB yield and uses it to market buy SENSI tokens. This in itself creates significant upwards price pressure, but there will additionally be a portion of these tokens which are burned, creating an additional deflationary effect. The remainder of these tokens will be used to top up the SENSI locking reward pool, increasing the returns for those who lock up their tokens and reducing the number of SENSI tokens in circulation (SENSI that are locked up can’t be sold). The net result is a strong deflationary effect on the token along with incentives for people to hold and not sell. SmartStake yields will also be paid in SENSI (again, market bought at the point of withdrawal) which will encourage people to hold at least a portion of their returns in SENSI.
There will also be additional rewards on the BNB staking side of the platform for those who lock specific ratios of SENSI to BNB staked. This feature is unlikely to be part of the first iteration of Smart Yield, but will follow in subsequent updates.