Yelay has become “The Yield Layer” in decentralised finance (DeFi) — an essential piece of middleware that connects yield generators with capital aggregators while optimising returns through automated allocation and risk management.
Simply put, The Yield Layer is all abstracting away the complexity of building with yield, whilst aggregating rewards for $YLAY holders.
$YLAY is the native token of Yelay, and staking $YLAY earns sYLAY tokens. These sYLAY tokens give holders a share of protocol rewards while enabling network decentralisation through trustless incentives.
Let’s explore how the $YLAY token is your ticket to the future of DeFi yield. 👇
Token Fundamentals
The $YLAY token operates as an ERC20 token with a total supply of 1 billion tokens, with a significant portion of the token already distributed and in circulation.
The current distribution is as follows:
- Circulating: 67.6% (676M)
- Treasury: 32.4% (324M)
The breakdown of the Treasury is as folows:
- Community Rewards: 15% (150M)
- Team: 5% (50M)
- Reserve: 12.4% (124M)
$YLAY and sYLAY
The protocol uses the $YLAY token and the token state sYLAY to calculate rewards. The relationship between $YLAY and sYLAY is designed to create strong economic alignment between stakeholders.
$YLAY is the native token enabling governance and staking.
sYLAY stands for “Sharded YLAY,” is non-transferrable between Web3 wallets, and earns multiple reward streams.
You can stake $YLAY through two distinct mechanisms:
- Gradual Staking, which accumulates sYLAY linearly over 208 weeks and provides a steady and predictable growth path for your holdings.
- Locked Staking, which provides an immediate sYLAY boost in exchange for time-locked commitments of your holdings.
Protocol rewards are distributed proportionally to sYLAY token holders. For example, if there are 1000 sYLAY tokens in the ecosystem, and you have 100 sYLAY, you’ll get 10% of all rewards distributed to sYLAY holders — which is before any multipliers are considered, which we’ll discuss in a future article.
Immediate Rewards vs Flexibility
Gradual Staking allows you to unlock your $YLAY position at any time. However, unlocking results in the loss of accumulated sYLAY and the rewards that they’re entitled to, creating a natural incentive for long-term participation.
Locked Staking allows you to receive your full sYLAY allocation immediately upon staking, but you can’t unlock it until the lock period ends.
Here’s an example of locked staking:
- You stake 208 $YLAY tokens
- You choose to lock for 100 weeks
- You immediately get 100 sYLAY the day you lock
- You do not accumulate additional sYLAY over this 100 week period, as you already received all the sYLAY up front, immediately boosting your rewards
Locked Staking is attractive if you’re seeking to maximise your initial yield potential and are willing to commit to a fixed timeframe, as your tokens can’t be unlocked until the lock period lapses.
What Happens When a Lock Ends?
When a lock period ends, you have a strategic choice: either claim your position and make your YLAY tokens liquid again (losing all accumulated sYLAY) or initiate a new lock to maintain the accumulated sYLAY (and yield potential.)
This flexibility allows you to adapt your strategy based on market conditions and personal circumstances. Regardless of your chosen strategy, you’ll earn sYLAY and start earning rewards from multiple streams within the protocol.
Reward Structure
Whether you choose Gradual or Locked staking, your sYLAY will immediately start earning you rewards from four distinct reward streams, offering a diverse way to earn with Yelay:
Protocol Emissions
- 15% of the $YLAY supply is allocated to node rewards, meaning the more you stake, the more you earn! Emissions start with a higher initial inflation but reduces substantially over time as the ecosystem matures.
- Reward Form: $YLAY tokens
- Example: $YLAY tokens deposited directly into your wallet from us over at Yelay.
Protocol Fees
- A 10% fee from all yields generated by Yelay is shared with the ecosystem, split equally between node operators and the Yelay treasury. Node operators share these fees with sYLAY holders who have staked their $YLAY to the operator’s node, creating a sustainable revenue model that grows with protocol usage.
- Reward Form: USDC
- Example: Yelay pays USDC proportionally to sYLAY from the 10% of fees taken on yield generated from the ecosystem.
Integrator Rewards
- This reward comes in the form of native tokens from projects building on Yelay, incentivising ecosystem growth and platform adoption while providing exposure to new, promising DeFi projects — a great way to automatically diversify a portfolio!
- Reward Form: Protocol tokens
- Example: A protocol pays in their native $EXAMPLE token to access Yelay’s infrastructure, with a portion of $EXAMPLE distributed to sYLAY holders.
Strategy Provider Rewards
- These are rewards from yield protocols for their total value locked (TVL) contribution to Yelay. This gamified mechanic provides additional value streams for all protocol participants, particularly benefiting sYLAY holders.
- Reward Form: USDC
- Example: Aave wants more TVL and is willing to pay if Yelay routes TVL through Yelay to the Aave protocol.
The Future of Yield is Here
$YLAY tokens power an ecosystem where yield becomes a carrier of value, enabling new DeFi possibilities.
By staking $YLAY and accumulating sYLAY, you’re participating in the future of decentralised yield generation.
Ready to be part of The Yield Layer?
Learn more about our ecosystem in our [Ecosystem Overview] and explore our long-term vision in [The Future of Yield].
