We are very proud to announce that we will be releasing non-custodial (stakeless) LP farming for the first time in Crypto! This design is made possible by the eUTxO incorporated into the Cardano Blockchain.
What does this mean for the user?
A major focus of the development of our platform is minimizing the steps required for a user to begin to engage with DeFi. An advantage that Cardano allows is the possibility of earning rewards without the need of depositing a token custodially in a smart contract. Users that supply liquidity to our platform will only need to hold the LP token in their wallet to access farming. The user only needs to head to the ‘dashboard’ to see their LPs farming. This reduces the steps required for a user to participate in a farm.
Another advantage is that every time a user claims their rewards, they will automatically be claiming every LP token pay-out that they are farming simultaneously. Effectively, this means every harvest transaction on our platform will be a harvest all transaction for the user. This in turn reduces fees for harvesting your farms.
How does this change a user’s experience when farming?
There are multiple advantages to the user through the implementation of non-custodial farms. A few that will discuss here:
Less steps to engage with a farm (One-Click to Farm)
Reduced transaction count for the user
A user will always be farming while holding the LP token
The LP tokens are now available at all times in the users wallet
Less steps to engage with a farm (One-Click to Farm)
Below is a diagram comparing the steps to engage in a farm on a standard DEx vs. VyFinance. A standard DEx in Cryptocurrency requires three transactions for a user to be able to farm. All DExs on Cardano require two transactions to farm. Our DEx will only require one transaction before they are farming their LP tokens (see figure 1 below). We call this simplified process called ‘One-Click to Farm’, as the user only performs a single transaction before farming commences.
The above image compares the steps required to engage with a farm on a standard DEx vs VyFinance.
Reduced transaction count for the user
As a user only needs to perform a single transaction to engage with the farm, fees are reduced for the user.
A user will always be farming while holding the LP token
Given the current design for farms, if a user does not stake their LP into the farming smart contract, they will automatically forgo any farm that is associated with that LP token. With our system design, all users who are eligible for a farm by holding an LP token will receive that farm.
The LP tokens are now available at all times in the users wallet
As the farming is non-custodial, the LP tokens themselves remain available to the user in their wallets. This in turn allows for compound utilities to be added to the LP tokens other than just farms. We will be releasing two articles describing two separate utilities that will be provided to these LPs. Namely, layer-two LP staking, market making with LP tokens and arbitrage between layer-two LPs and layer-one LP tokens. All of these utilities will be described in separate articles that can be found here.
This is a first in the Cryptocurrency space, we’re super excited to be able to bring this unique feature, which will simplify the onboarding process for new users into DeFi.
