Understanding YOP Finance — The Self-Proclaimed DeFi for Parents

IBC Group News
4 min readJul 6, 2022

Yield farming platforms such as YOP Finance hunt for safe and highly profitable farming opportunities in all of DeFi. The returns generated are automatically compounded every once in a while to maximize returns. All one has to do is deposit Ethereum, Bitcoin, or stablecoins into YOP Finance’s vaults and earn up to 65% APYs.

To understand how YOP Finance works, it is necessary to first understand how powerful yield farming is.

Let’s get started!

What is Yield Farming?

Yield farming refers to the methods used to generate rewards and earn returns on your cryptocurrency assets by depositing them on DeFi platforms such as Aave, Compound, and Curve.
The strategies used to generate yields can involve lending, staking, and providing liquidity using your crypto assets. After the deposit, rewards start to build up passively as time goes by. But what if you could compound (re-invest) your rewards instead of just letting them sit passively inside your wallet?

Unfortunately, doing so is time-consuming and will cost a ton in transaction fees as deposits are continuously being made. These fees will eat away at whatever profit is generated. Therefore, investors prefer to let yield farming platforms such as YOP Finance do all the heavy lifting on their behalf.

In addition to automatically compounding your rewards every once in a while, YOP will move investors’ assets to a more profitable/less risky DeFi protocol, should the opportunity present itself.

Is YOP Finance Easy to Use?

The truth is, DeFi must become inclusive to get to its 7 billionth user.

YOP Finance was built with simplicity in mind from the ground up so that even non-crypto natives can find it easy to earn interest on their crypto assets. Users just need to follow a three-click process to start earning rewards passively on their crypto deposits.

Most DeFi platforms have complicated jargon that can scare away the average crypto investor due to all the overwhelming information. To steer away from that trend, YOP Finance has built a super simple UI, free of data overload and complicated jargon.

Only the more essential info is displayed at first glance with an option to quickly navigate to YOP Finance’s docs page for more vivid explanations.

DeFi should be transparent

No matter how good a project may look on the outside, if you cannot find the answers to your questions, it is all for naught. New DeFi projects led by anonymous teams are problematic as the founders could abandon the ship at any given time. Long story, short, there is nobody to take accountability.

YOP Finance is deanonymized and its members can be looked up on its website. The team already has a proven track record since they are a part of Pluto Digital — a UK-based DeFi company, and to leave no room for doubt, YOP has made the data behind the APY calculation available and easy to find on their documentation page.

So How is YOP Able to Offer 65% APYs on Ethereum, Bitcoin, and USDT Deposits?

YOP, which stands for Yield Optimization Protocol, can perform such a feat using a few ways such as:

  • YOP Finance’s proprietary strategies built using smart contracts may involve simple tasks such as staking on a DeFi protocol named Compound to more complex tasks such as taking a loan on Aave and using the loan to provide liquidity on an Ethereum-USDC pair on SushiSwap. The liquidity provider tokens earned from SushiSwap can then be staked on another DeFi protocol.
  • YOP Finance features a BOOST mechanism wherein users can stake $YOP tokens to further increase their APY. Users can increase their returns thanks to the boost mechanism which involves buying and staking YOP’s utility token ($YOP) for a while. The boost is in the form of a multiplier x1 — x10, which applies to the Reward APY, which is above the base APY of the vault.
  • YOP also has a treasury that continually generates rewards, an important concept that should not be underlooked is risk management. YOP’s yield farming strategies are implemented according to the Trust Score determined by the Risk Engine.
  • By taking into calculation a certain set of inputs, YOP’s Risk Engine can carefully weed out risky protocols that are highly susceptible to losses.

Conclusion: What Lies in the Future For YOP Finance?

Aiming at enhancing accessibility, YOP Finance is looking to move its services across other blockchain networks. YOP will have access to more lucrative yield farming opportunities that will add more depth to the overall strategy set out in YOP’s smart contracts. Currently, YOP’s vaults allow users to deposit Ethereum, Bitcoin, and stablecoins, namely DAI, USDC, and USDT. And the list is sure to increase once YOP diversifies into more blockchain networks.



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