Yelay nodes play a crucial role in the Yelay network’s operation, security, and scalability. These nodes form the backbone of Yelay’s infrastructure, on everything from processing transactions to enabling efficient distribution of yield-generating opportunities.
Our nodes contribute computational resources and $YLAY tokens to support the platform’s operations, acting as validators, processors, and distributors of yield-generating strategies across our entire ecosystem.
Nodes Under the Hood
The Yelay nodes function in three main ways across the network:
- Ensuring network decentralisation
- Distributing $YLAY token emissions
- Allocating partner tokens
Node operators must stake $YLAY tokens, meet technical requirements, and offer incentives to attract stakers. Benefits include $YLAY rewards, accelerated infrastructure credit generation, and delegation rewards.
In this way, our economic model helps align node operators’ interests with the Yelay network’s overall health through proportional reward distribution. As Yelay grows, nodes will play an increasingly important role in supporting new yield strategies, integrating with emerging decentralised finance (DeFi) protocols, and maintaining network efficiency at scale.
A Look at Infrastructure Credits
Another participant in Yelay’s node ecosystem are Infrastructure Credits (ICs), which provide the key to accessing our robust suite of smart contracts. Like Amazon AWS credits, ICs are used by businesses to pay for using our infrastructure — which helps ensure a fair and scalable system for everyone — and can be acquired in three main ways:
Companies can buy ICs directly from Yelay, allowing them to quickly integrate Yelay’s technology into their products or services.
$YLAY token holders can stake their $YLAY tokens to generate ICs. When $YLAY is staked, it is converted to sYLAY (staked YLAY) and begins earning ICs. These earned infrastructure credits can be used personally or sold secondhand to businesses that need access to Yelay’s infrastructure.
For businesses requiring a significant amount of ICs or for those looking to maximise their involvement in our ecosystem, creating a node can be a helpful option.
We’ve Got a Node, Now What?
When a business creates a node, it opens up opportunities for other $YLAY holders to stake their tokens (as sYLAY) to that node, introducing a gamification element through which node operators offer incentives to attract sYLAY from $YLAY holders.
These incentives from node operators include:
- Sharing the $YLAY tokens generated from node emissions
- Offering their own native tokens as rewards
- Providing a combination of $YLAY and native tokens as rewards
The more sYLAY a node attracts, the more ICs it generates, creating a positive feedback loop that benefits both the node operator and the stakers.
This system creates a dynamic ecosystem where $YLAY token holders have multiple options for putting their tokens to work, choosing between different nodes based on the incentives offered.
Businesses can then choose to buy ICs directly from Yelay for simplicity, or engage more deeply with the ecosystem by creating nodes to attract stakers. We believe the competition between nodes to attract stakers will drive innovation in reward structures, potentially leading to more efficient and attractive staking options over time.
By implementing this infrastructure credit system, we’re ensuring that access to our smart contracts is aligned with all the interests and participants in the node ecosystem. Whether a business needs occasional access or is deeply integrated with our technology, there’s a path to obtain the necessary ICs while contributing to the network’s growth and stability.
How Node Emissions Work
Node emissions are a crucial aspect of the Yelay ecosystem, designed to incentivise long-term participation and ensure the sustainable growth of the network. This mechanism rewards $YLAY token holders who stake their tokens to nodes, providing them with additional $YLAY tokens over time.
When staking $YLAY for sYLAY, holders can stake their $YLAY tokens to a node of their choice. In return, they receive sYLAY (staked YLAY) tokens as an emission, representing their stake in the node. Node emissions occur periodically, and new $YLAY tokens are distributed to stakers based on the proportion of sYLAY they hold.
When emitted, new $YLAY tokens are automatically locked for a minimum duration of 1 year as additional sYLAY tokens. This ensures a level of commitment from participants and helps stabilise the token supply.
Upon the lapse of the initial 1-year lock period, stakers can then choose to unlock their emitted $YLAY tokens. However, doing so incurs a deprecation (the exact rate to be determined), meaning they’ll receive less than the full amount emitted. If stakers choose to lock their emitted tokens for the full duration of 4 years, they’ll receive the entire amount of emitted $YLAY tokens without any deprecation.
The unlocking process is intentionally gradual, specifically designed to occur over time to prevent sudden supply shocks to our ecosystem.
The vo Model
This emission and unlocking structure is based on the “vo” (vote-escrowed) model, which has gained popularity in DeFi for its ability to align long-term incentives.
By incentivising longer lock-up periods, the model encourages participants to take a long-term view of their involvement in the Yelay ecosystem, and the gradual unlocking process helps maintain a stable token supply, reducing potential market volatility.
The vo emission model presents stakers with strategic choices. They must balance the potential for higher returns — derived from longer lock-up periods — against the flexibility of shorter-term access to their tokens. This dynamic creates a diverse node ecosystem of participants with varying levels of commitment and involvement.
Additional Incentives from Business-Operated Nodes
Beyond the ecosystem-wide partner token emissions, individual businesses operating our nodes can offer additional incentives using their native tokens, like choosing to allocate extra amounts of their native token specifically to users who stake $YLAY to their node. This creates a unique selling point for the node, potentially attracting more $YLAY stakers and increasing the node’s influence in the network.
Businesses can use this mechanism to distribute their token to users who are actively engaged in our ecosystem, potentially creating a more involved and loyal user base. $YLAY holders then gain exposure to a range of tokens without needing to actively trade or manage multiple positions, and stakers can potentially access tokens from new and innovative projects that are partnering with us.
The prospect of receiving various partner tokens increases the attractiveness of holding and staking $YLAY, which incentivizes businesses to become more deeply involved in our ecosystem, potentially driving further adoption and integration. In this way, partner token emissions create a win-win-win scenario for Yelay, its business partners, and $YLAY token holders.
By creating this unique value proposition, we’re positioning Yelay not just as a yield generation platform but as a gateway to a diverse array of blockchain projects and tokens. This feature significantly enhances the appeal of the $YLAY token, potentially driving greater adoption and long-term value for the entire Yelay ecosystem.
To learn more about what our ecosystem can do for your business, check out Yelay today.
