Some say that cryptocurrencies are merely speculative: that the entire purpose is to sell to someone else for higher than you purchased the token for. While this is certainly true for many tokens and cryptocurrencies, others are providing unique methods to earn yields and passive income on top of your investment.
One such token is the YLD token by the Yield app. We will explore the exciting use cases of the token in this guide. But first, we will discuss the Yield app itself.
What is Yield?
The Yield app allows users to ‘stake’ their cryptocurrencies in exchange for rewards (or ‘yield’, if you prefer). Staking means storing your assets on a particular platform to provide liquidity (availability of tokens) to other users who want to trade that token. This is similar to how a bank works, where you receive a small percentage of interest in exchange for allowing the bank to hold your funds. While holding your funds the bank can use that money to make loans, so long as they guarantee to return your money in full should you request it.
However, in the case of cryptocurrency apps like Yield, the amount of interest a participant can receive is significantly higher than at a bank. Staking on the Yield app can provide returns between 6-18% in annual interest.
Yield Use Case: Staking Rewards
YLD is primarily used as a reward token. When users deposit their tokens onto Yield they earn rewards in exchange for staking them. Users can choose to receive rewards in other tokens, however, those that receive them in YLD receive an additional 2% APY (annual percentage yield) on their base assets. This has made YLD the most popular way to receive rewards on the Yield app.
The total APY a user can receive depends on which coin they are staking and how many YLD tokens they hold. Those with less than 1000 YLD can earn 6% APY on Bitcoin and Ethereum and 11% APY on stablecoins like USDT and USDC. Those holding more than 1000 YLD qualify for rates between 7.5-12% on BTC and ETH and 13-18% on stablecoins.
In addition to receiving YLD as a reward, users can also stake their YLD on the platform so long as they have more than 1000 YLD tokens. YLD tokens also provide flexibility by allowing users to instantly stake and unstake whenever they choose. However, those who lock in their YLD for one year receive a 12% on their YLD tokens. As you can imagine, this can create a significant compounding effect where users are earning YLD tokens which are in turn earning them even more tokens through being staked.
Yield Use Case: Free Deposits and Conversions
In addition to staking, the YLD token is also used to incentivize new participants to use the platform.
For example, the YLD token can be used to transfer value onto the platform and between cryptocurrencies without paying any fees. In this case, a user who wants to send $1000 of value onto the Yield app will be able to do so for free (without transfer fees) so long as they send the value as $1000 worth of YLD tokens.
Users are also able to use YLD to swap between cryptocurrencies on the platform free of charge. For example, if a user wants to trade Bitcoin for Ethereum, they can do so with zero fees if they transfer from BTC to YLD and then YLD to Ethereum since both sides of the trade involve the YLD token.
The Yield app does this to further incentivize the use and liquidity of YLD tokens. Trading fees can be very expensive, so this provides traders on the platform with significant savings.
Yield Use Case: Referral Rewards
YLD is also used to incentivize current users to onboard others onto the platform. This is done through the Yield referral program which rewards both the referrer and the referred with $40 worth of YLD. The only condition is that the referred must keep at least $100 in an investment pool on the app for 30 consecutive days before each recipient is eligible to receive the reward.
A referral program is a unique feature and offered through a certain amount of tokens that were set aside for this purpose from the beginning of the project. Five million YLD tokens were originally in a referral pool to serve as rewards for those who onboard new users. The referral program will eventually end once this pool has been depleted. This program is therefore only temporary in theory, however, it is still running to date.
Growth of the Yield App Platform
As we have seen in this guide, the YLD token is primarily used to reward users of the Yield app and to incentivize new users to join the platform and stake their tokens. It does so by providing increased staking rewards, free trading, and referral rewards.
Like most cryptocurrencies, YLD can also be used to speculate on the future growth of the tokens’ underlying platform. In this case, that platform is the Yield App. As the app grows in users there will naturally be more users staking YLD, as such there will be less selling pressure which helps the price of the YLD token to naturally rise with the growth of the platform.
As with any cryptocurrency, there is a risk to such speculation, however, the Yield app has generally shown itself to be a major player in the staking space and anyone holding from the beginning has done extremely well on their investment.
If you are a fan of the Yield app or believe in its continued growth as a platform the YLD token is one to keep an eye on.