Recap of #AMASeries19: Crypto OLALA x APY.Finance and Mr.Will Shahda.
On September 14th 2020, APY.Finance team and Crypto OLALA group organize an AMA to make the community members know more about APY.Finance and what is its application? Here is recap of it:
Segment 1: Introduce and Question Warm-up: Moderator Mark will ask 3 question warm-up.
Question 1: Can you please briefly introduce yourself and ApyFinance project?
I’m Will Shahda, the founder of APY.Finance.
I’ve been involved in the crypto space for awhile, and in particular got involved with DeFi starting in 2018. When all the speculation from the 2017 ICO craze ended, the only people still in the space were truly committed to the tech. During this time is when we saw DeFi come into the picture.
As a technologist, I was excited to see a new segment of crypto providing real value to users. DeFi got back to the roots of crypto, programmable money. The platforms that were being built were useful now, not in some hypothetical blockchain future.
During this time I started attending as many Ethereum development hackathons as possible. Building teams to hack on a project under tight deadlines. The more my teams competed, the more we won.
The most recent hackathon I participated in was HackMoney. It was here that the idea for APY.Finance was born.
APY.Finance is a yield farming robo-advisor that focuses on user experience and risk management.
We see three major pain points with the yield farming user experience: barrier-to-entry, time commitment, and cost.
There are a ton of people flooding to DeFi right now. Everyone is hearing about all this crazy action, all these crazy returns. Even BTC maxis are jumping into the ring with WBTC and renBTC. But what they face is an incredibly complicated landscape with lots of undefined risks.
I’ve talked to many crypto-natives that have suddenly taken an interest in DeFi, but found themselves lost on how to capture the opportunity. There is a big onboarding problem.
Once users figure out the best ways to yield farm, they find themselves stuck with a full time job. They spend all day on Crypto-Twitter trying to stay on top of the latest strategies, managing their positions, and assembling complicated spreadsheets to try and understand their actual ROI.
For many users, yield farming has also become far too expensive. Entering into a yield farming strategy can cost over $50 in gas fees. This creates a ton of friction for the average user, and optimizing their positions daily is completely out of the question.
APY.Finance solves these pain points by giving users a single place to deposit their liquidity. All it takes is a low cost transaction to deposit. The platform handles all the heavy lifting of yield farming by pooling everyone’s liquidity and distributing the gas cost. This makes onboarding very simple and very cheap.
Once a user has made their deposit the system automatically manages their portfolio of yield farming strategies. Continuously optimizing positions for yield, managing risks, and providing analytics to calculate ROI. Users can be hands-off, safe in the knowledge they are getting high yields without needing to commit hours a day to farming their crops.
Risk management is another big focus for APY. We believe risk is being increasingly overlooked in modern yield farming. A system is only as secure as its weakest link.
First and foremost, the security of our own smart contracts is paramount. I’ve done security audits myself so I know how important they are. Our contracts are comprehensively tested and we use the latest smart contract best practices. Once any contract is done with active development for its latest stable version, it will also be audited by a third party to verify its security.
However, securing our own contracts is not enough. It is important APY manages the risk of the financial primitives and protocols it interacts with. By distributing liquidity across a portfolio of yield farming strategies, we diversify smart contract risk to limit our users’ potential downsides.
We also use a risk assessment framework to assign every strategy a risk score. Risk scores are also the first place where we will involve governance, allowing users to propose and vote on changes to risk scores. This keeps the platform up-to-date with the latest changes in the DeFi ecosystem, as well as allowing the community to tailor the platform to their own level of risk tolerance.
As we continue to decentralize, we will allow the community to propose changes to yield farming strategies. Eventually the community will be able to propose entirely new strategies to be included in the APY yield farming portfolio.
We are building an architecture that will allow governance participants to create strategies using a UI reminiscent of https://furucombo.app/ that can be proposed and voted on. Once accepted, these strategies are deployed with the full power of the APY liquidity pool.
You can read more about our governance roadmap in our recent token economics article here: https://medium.com/apy-finance/introducing-the-apy-token-edac64d0cf6b
Question 2: How does APY.Finance work? What is the highlight of APY.Finance ?
The APY platform gives users a single pool to deposit their liquidity. The pool’s liquidity is automatically managed, continuously optimizing for the best risk-adjusted yields in a portfolio of yield farming strategies.
APY operates at a higher level of abstraction than other yield farming aggregators. Our focus is on smart routing between yield farming strategies in a balanced portfolio. Other aggregators focus exclusively at low level automation of specific yield farming strategies.
We think it is important to account for risk and not just seek the highest possible yield. DeFi is a rapidly evolving space and we need to limit our downsides otherwise we are picking up pennies in front of a steamroller. This is why we diversify smart contract risk with a portfolio of strategies and why we rebalance liquidity according to risk-adjusted APY.
Question 3: Community building and partnership are indispensable conditions in the success of a project, it shows the reliability and strength of the project itself. So with APYFinance, what organizations do you have relationship with? In the future, what is your strategic plan to build a strong community?
We will be announcing partnerships in a future article.
We believe that the best way to develop a strong community is to offer value. We want to educate users on DeFi, help onboard them into the ecosystem, and most importantly give them yield. Even before early governance features are released, we want to listen closely to our community when making decisions about the direction of APY. As long as we empower and incentivize our community, we believe they will be active participants. We want our community to feel real ownership over the APY platform.
In early stages, we think our liquidity mining program will help bootstrap users and generate interest in the platform.
Segment 2: Question Selected from the Twitter:
There have been more than 120 questions sent about the program. Now we are going to pick out five key questions to ask directly to CEO Mr.Will Shahda 😁
Question 1: Any small coding error can permanently damage the entire assets of the LPs. This is the biggest risk of Liquidation mining. How will APY deal with this problem?Has your smart contract been audited by any blockchain system ?Why should we feel safe when provide liquidation for APY?
Security is very important in DeFi and something I try to touch on often when talking about APY.
With such a heated market, we feel that many are overlooking the security risks. The risks are often not obvious and require specialized knowledge to properly assess.
We approach security in layers. First, of course, is the security of our own contracts. I’ve done security audits myself in the past, so I know just how rigorous you have to be to have confidence in the security of a contract. Proper testing and documentation can go a long way for auditors.
Next is the security of the protocols we interact with. There is a lot of excitement about the interoperability of DeFi protocols, but the security of a system is only as good as the weakest link. This is where the diversification of yield farming strategies according to risk score comes in.
With multiple strategies we are able to reduce our downside risk in the event of a vulnerability from a third party protocol, while keeping yields high.
We also believe that when properly incentivized, governance participants with specialize knowledge for assessing risk for strategy risk scores will get involved. We’ve seen this validated with the launch of YFI.
Finally, we are exploring options for insurance to limit the downside risk as much as possible from any unforeseen DeFi disasters.
Question 2: Can you explain your relationship with JARVIS Network? It is currently one of the promising projects and it is great to know that two large projects APYFinance and Jarvis Network are connected.
The founder of Jarvis, Pascal, is an advisor to APY. He has built an incredible community around Jarvis and we hope to build a community just as committed.
I have worked with Pascal in the past and have incredible respect for the way he conducts business. He is also very networked in the industry and has helped APY build relationships with critical connections.
We also hope to integrate with Jarvis and leverage their own yield farming programs as part of our strategies. I personally helped build their Synthereum platform, so I have first-hand knowledge of the benefits of being a Synthereum liquidity provider.
Question 3: Adoption is a very critical element at every crypto project. How does apy finance ensures adoption to its technology in the long run?
In the short term, we believe users will come to APY for the simple onboarding process, the risk management, and the rewards from our liquidity mining program.
In the long term, APY will do much more that attracts a wider range of demographics. Other consumer facing projects will be able to integrate with our platform to offer their users high yield crypto savings accounts. Institutional LPs will be able to deploy underutilized capital. And whole communities will be able to come together using the APY token to govern the automation and allocation of capital to yield farming strategies.
We’re excited for the future of APY and all the ways we will be able to drive adoption.
Question 4: As a Co-Founder of APY Finance, what is your humble expectation for APY token in the market for the following months and years to come? Do you see any potential for APY token to follow the trend in the market and it will really rise and shine and boom?
The DeFi market has certainly been an exciting place to be in recent months.
APY, like many new DeFi tokens, is a governance token. Its utility is derived from its power over the APY platform. As we follow our roadmap to full decentralization, the APY governance token will be given increasing amounts of power over the system.
Many speculate on governance tokens due to their potential to accrue fees. While APY does not start with fees, the community could vote them in and distribute them to token holders if they chose to. My belief is that governance tokens hold more power than just their potential to accrue fees. You can read a great argument for why governance tokens can be considered a capital asset here: https://www.placeholder.vc/blog/2019/2/19/cryptonetwork-governance-as-capital
You can also read more about the APY token’s utility in our recent token economics article as well: https://medium.com/apy-finance/introducing-the-apy-token-edac64d0cf6b
Question 5: What are the ways that your project generates profits/revenue to maintain your project and what is its revenue model? How can it make benefit win-win to both investor and your project ?
We do not have any fees baked into the system from the start. However, it is entirely possible for the community to vote in fees using the governance token if they chose to.
We hope to make APY a self-sustaining community-owned system that in the future will not be dependent on us at all. Any work done by the APY.Finance team would then funded by grants issued by an APY DAO controlled by the community.
Investors have purchased APY governance tokens. Holders of this utility token can derive significant benefits from APY governance and their ability to influence the capital in the APY system could prove very valuable.
Segment 3: Free Q & A between the community and APY Finance.
Question 1: One of the biggest issues is gas fees. As more users enter the space, these problems will only get worse. How APYfinance handle this?
APY uses a liquidity pool to collect user deposits. Users do not need to do the heavy lifting of yield farming which relieves them from the burdens of high gas costs. A simple low cost transfer transaction is all that is needed. On the next rebalance, the platform then deploys all user liquidity at once in a single transaction and distributes the gas costs.
The greater the APY TVL, the lower everyone’s gas costs become from the economy of scale.
Question 2: Kế hoạch của APY.Finance đến cuối năm 2021 cần đạt được những gì?
APY.Finance đánh giá thị trường Việt Nam như thế nào? Bạn có kế hoạch gì tại thị trường Việt Nam?
Throughout 2021 we will be pushing forward on our roadmap to fully decentralized, community-owned governance. You can read more about it in our recent article introducing the APY token: https://medium.com/apy-finance/introducing-the-apy-token-edac64d0cf6b
We are looking to expand into the Vietnamese market and have partnered with Kyros Ventures to help reach out.
Question 3: Productivity and time are important issues that concern users. So how is Apy Finance’s mining productivity?
Serious yield farmers often find themselves stuck with a full time job. They spend all day on Crypto-Twitter trying to stay on top of the latest strategies, managing their positions, and assembling complicated spreadsheets to try and understand their actual ROI.
APY helps users by managing their portfolio of yield farming strategies for them. Continuously optimizing positions for yield, managing risks, and providing analytics to calculate ROI. Users can be hands-off, safe in the knowledge they are getting high yields without needing to commit hours a day to farming their crops.
Question 4: You organized an AMA session very rewarding and received a lot of questions related to utilities and technology, future vision, …So now I want to ask what do you want to receive from the community?
I hope for the community to make their voices heard, give us feedback, and use the platform!
We are building APY to democratize yield for everyone and would love nothing more then the opportunity to give the community the best risk-adjusted yield possible.
As we build out the APY governance features, we hope the community uses the APY tokens to govern the platform by voting on risk scores and proposing strategy changes.
Question 5: SECURITY and SCALABILITY has been a problem so far in this industry ,
How did you plan to solve this problems and with what strategy ?
We take the security of our own contracts very seriously. Even though DeFi users have recently become comfortable jumping into unaudited contracts, we still want to hold ourselves to a high standard. By diversifying our smart contract risk with a portfolio of yield farming strategies, we also reduce the risk from external contracts.
Our plan for scalability is to fully decentralize governance. By eliminating the need for centralization or trusted parties we can ensure that the system will scale.
Question 6: According to your website,APY build APY Analytics tool to track profit and risk factor on Yield farming. please explain in detail how it will work and provide risk factor? is it build on smart contract or it is a tool?
In the early stages when our team is fully responsible for the planning and development of strategies, we will be assessing the risk scores for strategies.
Our risk assessment framework will analyze and weigh factors such as smart contract risk, financial risk, and centralization risk. We actually met with a security firm the other day to help plan our risk assessment strategy.
From there, as I mentioned, we will involve the community. We will incentivize those with specialized knowledge in DeFi to propose changes to risk scores and keep the system up-to-date in a fully decentralized way.
Question 7: What (if anything) does APYFinance do to try and create a long-term value proposition in a field pretty much defined by FOMO degen patterns of getting in early and getting out fast?
I’ve been in DeFi since 2018 and have seen DeFi build itself up with platforms that provided real long term value to users. These FOMO degen markets may be a trend right now but I see much more fundamental value in DeFi as a paradigm. We intend to bring the core principles of decentralized finance to APY by building a permissionless system that can evolve through community governance, adapting as the DeFi industry matures.
Question 8: Can you introduce the Apy Finance roadmap? What are the key milestones for 2020?
First, we are starting with our liquidity mining rewards program. We are allowing users to start depositing liquidity to earn APY before we begin running strategies. From there, when we have reached the MVP for our initial strategy portfolio, we will do an alpha launch. We are well on our way to hit this target, the engineering team has been making amazing progress.
After the alpha launch we begin our plan of progressive decentralization.
We will give APY token holders increasing control over the system. Allowing them to propose changes to strategies and eventually allowing them propose entirely new strategies.
We are developing a generalized strategy architecture with our smart contracts that will support community control over discrete steps in our strategies, The community will be able to propose changes that can be deployed automatically without the need of a smart contract engineer to develop new contracts.
We hope to show a demo of how this will look in the coming months as well.
Question 9: How can much liquidity can I withdraw and how do I go about the withdrawal ?
Users can withdraw anything up to their full stake in the APY system.
We are designing the system in such a way that we can batch withdrawals as well as deposits. If we make it cheap and frictionless to deposit, we don’t want it expensive to withdraw.
Question 10 :Can you list 1 or 3 killer features of #APY.Finance that makes it ahead of its competitors ?? What is the competitive advantage your platform has that you feel most confident about ???
The first big advantage we have is in our smart routing system. By focusing on a portfolio of strategies rather than automating a single strategy at once, we mitigate yield dilution and diversify smart contract risk. It also allows us to be completely strategy agnostic.
Second is our liquidity pool. Everyone can deposit into the same liquidity pool and get exposure to this portfolio of strategies. Other platforms have many fragmented pools, increasing complexity and forcing users to understand the differences between them in order to make their own decision about strategy and risk. A single pool also increases the economy of scale for users, reducing their yield farming costs.
Third is the architecture we are building for full community governance. It will give the community incredible control over strategies that the platform includes in its portfolio. Imagine being able to use a UI similar to https://furucombo.app/ that allows you to create a strategy and propose it to the APY platform.
AMA is ended.