Riding The Avalanche: My Long-Term $YAK Strategy On YieldYak

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Written by

#Club1BCH

9 months ago

In community: Everything Crypto(f12e)

Topics: Avalanche, Arbitrum, YieldYak, Yields, Cryptocurrency, ...

Yield Yak is the most popular and most used optimizer on Avalanche, due to the great variety of opportunities that it offers. An optimizer is in charge of maximizing the annual percentage of rewards that users can get when farming or staking your cryptocurrencies on other platforms.

The optimizers use the rewards users receive to exchange it for the cryptocurrency or cryptocurrencies you are farming or staking. The next step is to put those cryptocurrencies back into the farm. The compound interest is obtained by using the rewards and reinvesting them in the farm. Sit back and earn!

Yield Yak offers one-click leveraged farming strategies for borrowing and lending markets like Aave, Benqi, and others. These strategies optimise your single-asset deposits, automatically compound your returns, and save you time

I like long-term strategies, and auto-compounding pools are my favorite pools! I can add crypto and enjoy the full package... optimized yield, no waste on gas, and perpetual earnings. I seen the power of auto-compounding with my staked $AVAX, and I was thrilled when Yield Yak launched on Arbitrum.

Popular Yield Yak farms compound every few hours, and the reward tokens are converted into deposit tokens on behalf of all users in the pool many times per day. Yield Yak on Arbitrum meant that I was finally able to stake my lazy $ARB tokens. Found a good pool that offered 3% APY, and moved them all when the deltaprime pools were added. The APY was considerably bigger, often going above 10%.

I explored the available pools and found a better option for $GLP! The APR on GMX was 8%, while the $GLP pool on Yield Yak had 37% APY! Always go for APY instead of APR, as the auto-compound will always generate more rewards. The tokens are pilling-up automatically without any additional effort.... No need to check... no need to worry!

I am telling you nice and early... 2024 is the year of the Yak! To fully understand the success of the optimizers, we have to look at the $YAK tokenomics and how the token powers the whole ecosystem.

YAK is the native token to Yield Yak, with a fixed-supply set at 10,000 $YAK. The token can be staked to earn platform fees, and no additional YAK may be minted now or in the future. The YAK holders are receiving 70% of all platform fees, distributed every 24 hours. I want to be part of the YakPack, and holding $YAK is part of the journey. I set a long-term strategy, adding at least 0.1 $YAK per month to my current holdings. The canonical chain for YAK is Avalanche, where it was originally deployed, but the token can be bridged to Arbitrum as an OFTv2 token from LayerZero.

I decided to start building my $YAK treasury on Arbitrum, as the layer2 chain can be easily accessed trough Across. The YAK tokenomics are not affected by bridging, and the YAK must be locked on Avalanche before it can be minted on Arbitrum. The YAK tokens must be burned on Arbitrum before they can be unlocked back on Avalanche. The initial plan was to start buying 0.1 YAK from January, but I decided to have my first share as a Christmas present. Swapped 59 USDC for 0.106 $YAK, and the long term strategy started ahead of the schedule.

You can use your $YAK to earn AVAX or compound it for more $YAK. My fractions were bought on Arbitrum, therefore my option was to deposit YAK to earn YAK.

Staked into the pool and let the optimizer to it's job, applying a strategy that returned 3.7% APY based on recent performance. The APR will be lower without compounding effects.

Yield Yak calculates returns based on actual performance, and includes factors like platform fees and trade slippage. Returns are variable and you may not realize the full impacts of APY if a farm stops emitting rewards or other factors change.

The cogwheels were already moving in January, when I added another fraction of $YAK in my portfolio. It was staked in the same pool, and if I stick to the plan I will have a full token by October. Holding YAK is not only a sign of power, but also the gateway towards decentralized governance. YAK is the native governance token for Yield Yak, and the holders participate in protocol decisions and governance. The voting power is determined by how many YAK you have staked. The balance is called vYAK, set at 1:1000 vYAK ratio. This means my 0.2 YAK will give me 209 voting power in snapshots!

February is the month of love and rejuvenation! I celebrated the Chinese New Year, Pancake Day, Valentines Day and ... another 0.1 YAK! This time I used wETH for the trade, and got the desired fraction. Using Yak Swap is the best option, as the integrated zero-fee DEX aggregator will use the reinvest functionality.

Every time a reinvest is triggered, Yield Yak's smart contracts use Yak Swap to check that rewards are optimized for pool depositors. Therefore, I am boosting my deposited YAK by buying more YAK. This is DeFi at maximal power!

Farmers who use Yield Yak will earn the average price for rewards while enjoying compounding effects on their deposits. It's not even spring and I already have 0.31 YAK earning compounded interest.

What is compounded interest? Yield Yak exchanges my rewards for the base asset and adds it to my position, and the next injection of rewards will come from a larger base amount. The perpetual action will growth that accelerates over time, delivering higher and higher rewards.

I am planning my next move while exploring a new pool! I deposited USDC into the Silo pool, where the APY was 13.8%, and will let it grow until it's time for another YAK fraction. The base amount of USDC will grow through compounding, and will be ready to be swapped for 0.1 YAK at the start of March.

Why I am sticking to the 10% plan? Because buying fractions nullifies the price volatility, helping me to maintain an average price. Maybe will increase the share if the bull run will bring a massive market rejuvenation, or if I hit the jackpot with some random airdrops! Until then... It's time to sit back and earn with Yield Yak!