Welcome to the recap of our AMA with APY.Finance.
Our vibrant and enthusiastic community had a lot of questions to ask. To those who want to know quickly what APY.Finance is about, we are sure this recap is gonna help you. So without further ado, continue reading 😉
✔️Introduction with APY.Finance :👉
Q1. Can you please introduce yourself and also tell us a bit about APY.Finance ? @willshahda
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.
There are three major pain points with the yield farming user experience: barrier-to-entry, time commitment, and cost.
APY 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.
We also use a risk assessment framework to assign every strategy a risk score. APY then distributes user liquidity across a portfolio of yield farming strategies to optimize for risk-adjusted yields.
Q2. What products or solutions is APY.Finance providing currently? @willshahda
APY.Finance is providing a yield farming robo-advisor platform.
APY’s smart routing system is our special sauce. We optimize for risk-adjusted yield by routing between a portfolio of yield farming strategies. By pooling user liquidity together, we are able to do this routing atomically and at a very low gas cost to the user.
Q3. Did APY.Finance do any partnerships ? @willshahda
We will be announcing partnerships in a future article.
We have received interest from other projects to use APY on their backend to provide their users with yield. It’s something we are pursuing and we will have more information about it down the road.
Interest from other projects shows you guys are doing extremely well in what you have set out to do!
Q4. Finally, what does APY.Finance plans to achieve by the end of this year? @willshahda
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.
🐧Community ask Questions by Twitter ✔️
Twitter Question no 1 (Latam con Expert)
Username : @JLEspertLA
there was a great success in the proposals of LEND, COMP, etc. Then YFI, YFII, BZRX emerged offering new innovations. Taking this progres into account, what are the most innovative points that APY brings to the DeFi ecosystem now?
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.
Twitter Question no 2 (Diluvina Velasquez)
Username : @Diluvinav
Does the Apy Finance chain have the skills and experience necessary to produce a project with high standards?
I think community is the key, so my question is what is Apy Finance’s strategy to create a local community? Thank you
The team absolutely has the skills and experience necessary. Our engineering team has been forged in the fires of hackathon competition and is ready to prove themselves by making APY a top project in the DeFi space.
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.
Twitter Question no 3 (Yuki)
Username : @MiyukiMikoto
Are APY Financial Assets subject to interest rate fluctuations? Can it be affected by market risk? How does APY Finance protect against volatility and liquidity risks? How does APY Finance risk policy work?
Risk management is critical in so many ways. While I’ve touched on how we handle smart contract risk, financial risk is equally important. Leveraged positions are often taken in yield farming strategies, and this always introduces liquidation risk. There are a number of triggers that initiate a rebalance of our yield farming strategies. Whenever a rebalance is necessary, a portion of yield is reserved to incentivize a third party to initiate the rebalance.
One of these triggers is liquidation risk, an example would be the liquidation risk on a leveraged Compound position. Even if you collateralize and borrow the same asset, you are gradually paying out interest rates that can eventually bring your collateral low enough to make your position vulnerable to liquidation.
The system can calculate the amount of collateral buffer that is required based on the interest rate and collateral factor to determine the safe margin.Once the system approaches the edge of that safe margin, a rebalance becomes available to unwind a portion of the position to keep the collateral secure. This is done when farming COMP with the DAI³ strategy. Not only does the user not need to worry about liquidation risk, they don’t need to pay the insane gas fees to manage that risk.The economy of scale provided by pooled liquidity on APY disperses those gas costs.
Twitter Question no 4 (AMAers)
Username : @4BracesCP
One of the keys to a large user base of Ethereum is that their yield farming can bring more benefits. What are the differences and advantages of yield farming from APY Finance?
APY is not just about managing yield farming strategies, it is about community automation of capital.
Creating the infrastructure that allows a community to govern the management of a yield farming strategy portfolio requires us to build the tools that will enable arbitrary automation of capital through governance.
There are many interesting experiments occurring with DAOs and governance, but the ability of a DAO to programmatically interact with the wide range of financial primitives in DeFi is quite limited.
We see the technology we are building at APY for our long term vision of fully decentralized, permissionless, and community-owned yield farming as the connection that will bring the world of DeFi and the world of DAOs together like they have never been before.
You can read more about our plans for governance in our recent article introducing the APY token: https://medium.com/apy-finance/introducing-the-apy-token-edac64d0cf6b
Twitter Question no 5 (JossifStalon)
Username : @JossifStalon
One of the difficulties of defis in general, is easy access to them, which sometimes comes down to using metamask only. From the APYFINANCE team, are you working on more integration to facilitate access to the protocol?
Our initial focus is onboarding new users to DeFi. Most of these users come from other areas of crypto so they are comfortable using exchanges and wallets.
From there we are looking at integrations that will help onboard users less familiar with the Ethereum ecosystem. We have talked to a few other projects about this and we are exploring some interesting options.
✍️ Telegram live Questions answered by APY.Finance ✔️
I saw something about PROXY CONTACT on Telegram group. Can you explain please what is proxi contact? And how it is wroks?
A proxy contract is used by smart contracts to provide an upgrade path. It is necessary when trying to iterate on functionality without requiring users to migrate to a new contract.
APY will use these with critical contracts while in active development to provide new features to users and ensure that we can stay agile when responding to the every-changing DeFi landscape.
Each project has interesting stories before it is created. So can you tell people about the story that gave you the motivation to build and develop a great project like your?
The idea behind APY came out of the HackMoney hackathon. We saw tons of yield opportunities that were being left on the table due to the barrier to entry and time commitment required to use them. We won the 2nd place Uniswap prize for the project we developed. As the DeFi space continued to grow, we saw an increasing necessity for a high-level yield farming aggregator that not only automated strategies, but optimized portfolios of them.
How safe are your own contracts? What security mechanism does APY Finance use? How do you guarantee security to users?
We look at the security of our system in layers.
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.
Finally we are exploring possibilities for insuring the system using either Nexus Mutual or our own insurance pool that accrues capital using a small portion of yield.
Let’s talk about transparency. Recently, numerous DeFi project exit scams have emerged. So, my question is How we can ensure us that APY Finance will never scam in any way?
Because we are not anonymous developers and our tokens are locked and vested for 4 years 😂.
We are known members of the community and cannot hide behind a Twitter avatar. We are true believers in crypto and see DeFi as an important step in the evolution of the world’s financial systems.