We’re pleased to announce the introduction of a new project within the YFLink ecosystem: LINKPAD, a decentralized and transparent venture capital fund.
For the first time ever, retail traders will be able to obtain exposure to high-profile, tier-one private investment opportunities, simply by staking the YFL token.
What We’re Building
With the launch of LINKSWAP, the YFLink treasury is expected to see inflows of capital that will be used for project development and an assortment of other uses. We believe that a portion of these funds could be tactically allocated towards making strategic investments in early-stage projects that can drive value to the YFLink ecosystem.
Essentially, we’re looking to build a venture fund with a fraction of the fees generated by the LINKSWAP platform, and use these funds to make seed investments in early-stage projects. To mitigate issues with transparency and liquidity, we will be only making investments in tokens, not equity.
We understand that there currently exists a climate where large venture capital players get access to presales, private sales, and seed rounds that the typical retail investors simply cannot get involved with.
LINKPAD is the first initiative of its kind, in that it allows the retail investor to gain the same benefits of triple A investments by simply staking the YFL token. As operators of LINKPAD, we are well connected in the crypto ecosystem and have easy access to private sales for projects (examples include Filecoin, Polkadot, Moonbeam, etc.) and are capable of delivering value and returns to YFL stakers.
The new system will not reduce the percentage of the fees directed to the staking vault, so YFL stakers will receive the same amount of income from staking as before. The capital will instead come from a portion of the percentage of fees that are presently set to be directed to the treasury. If needed, the cash reserves within the fund can be sent to the treasury if any expenses arise via a governance proposal.
Our investment mandate will be public and we will regularly update the community on our investments. All funds will be held within a 3-of-4 cold storage multisignature wallet, held by Roy, Palis, Cole, and Leeren. These four individuals are geographically distributed across the globe and are involved in different aspects of YFLink.
How This Benefits YFL Holders
The goal of these investments is to drive value to YFLink and the YFL token — by finding early-stage projects with tokens that have yet to list, we can help bootstrap their development and direct exclusive listing to the LINKSWAP platform. In a way, projects that we will fund will become branches of the YFLink ecosystem.
We also think it is important to put the funds garnered by the YFLink treasury to work. Year to date, DeFi investments have strongly outpaced both BTC and ETH. To give an example: AAVE is up 7,000% since the start of 2020. If the treasury funds are held only in ETH, we will likely dramatically underperform the DeFi market.
As all funds will be withdrawn from the vault, all movements will be publicly audited.
All profits made by LINKPAD will be allocated to holders on a rolling quarterly basis. This essentially makes all YFL stakeholders Limited Partners in an actively managed venture fund and opens up a new stream of revenue for the staking vault.
Here’s a simple breakdown of the ways this benefits the YFLink ecosystem and the YFL token:
- Creates a new stream of profits for the YFLink governance vault, decreasing the P/E ratio of the YFL token (and thus increasing its monetary value).
- Directs value to the ecosystem through exclusive listings, heightened liquidity for LINKSWAP, onboards new development projects to the YFLink ecosystem.
- Because many, if not all, of the projects funded by LINKPAD will exclusively list on LINKSWAP, the fees and initial trading volume spikes generated by these listings will also direct value to the governance vault.
- Incentivizes long-term staking — because those staking tokens in the vault won’t receive the profit distribution if they withdraw their tokens before the end of the quarter.
Here’s What We Propose:
We propose that we redirect half (50%) of the fees that would otherwise go to the treasury to be sent to the LINKPAD fund. This capital will be used for investing in projects and driving value to the ecosystem. These funds will remain fully owned by the ecosystem, with all profits from token sales being redirected to the governance staking vault on a rolling quarterly basis.
How fees will look under our proposal:
- 0.05% (one-sixth) of the 0.30% trading fee will be a ‘protocol fee’
Protocol fees to be allocated as follows:
- 80% to YFL-LINKSWAP Governance Vault stakers
- 10% to YFL Treasury
- 10% to the LINKPAD fund
With this new system, the YFL tokens staked within the governance vault will each be generating more revenue than they are presently.
These funds will be used in a variety of ways to produce additional revenue for the YFL governance vault, these include (but are not limited to):
- Seed investments in early-stage projects that can enhance the YFLink ecosystem (whether through development, LINKSWAP exclusive listing, or YFL liquidity pairs).
- Liquidity provision on LINKSWAP (to enhance the TVL and liquidity across the various lucrative pairs that will account for impermanent loss.
- Yield farming across the aggregated DeFi space (will be limited to low-risk, fully audited protocols).
- Investing in community-led projects — if you have a product or idea that can drive value to the YFLink ecosystem, we can help fund and grow that project!
At the start of each fiscal quarter, all the profits taken as a result of the LINKPAD fund’s investment activities will be distributed to the stakeholders of the YFLink vault.
- In an effort to ensure that individuals don’t deposit YFL the day before the distribution in order to earn some quick profits, only tokens staked for the previous quarter will receive the distribution. Exempli gratia: wallets with YFL staked in the vault before the end of Q2 will receive the profit distributions for Q3, and so on.
It is important to note that the entire balance of the fund will not be distributed to the governance vault each quarter, but rather only the profits from the quarter’s investing activities. As the fund grows alongside LINKSWAP, the profits being generated by LINKPAD will grow as well, creating even more value to be directed to the governance vault on a quarterly basis.
As we will be managing funds owned wholly by the community, we understand that there may be concerns regarding transparency and security.
We will be enlisting four measures to ensure these concerns are addressed:
- Multi-signature Wallet: As stated above, all funds will be held and transacted within a 3-of-4 multi-sig wallet held by a number of YFLink ecosystem members that are individually part of different YFLink Teams: Roy, Palis, Cole, and Leeren. No funds can be moved without approval from three of these key holders.
- Publicly-known Address: A publicly-known Ethereum address will be used for all transactions, so community members can monitor all activities.
- Regular Updates to the Community: We will provide a comprehensive quarterly report detailing our investments and profitability. We will also provide more regular updates to the community each time we make a new investment, and our Discords are always open to answer any questions privately. We also intend on actively participating in Discord in case you have any investment ideas or concerns.
- Skin in the Game: To make sure that you all know that we are invested in the success of LINKPAD as much as YFL holders, we will be bootstrapping with personal funds. The core team members will be putting up to US$50,000 of personal capital to kick-start the fund, with all the profits generated from this capital going straight to the governance vault stakers. We will not be asking for any type of management fees or profit carry for the first few months while we prove the idea and start providing value to YFL holders and the aggregated ecosystem.
Who We Are
Cole Petersen, team lead: Cole will be leading Team 07’s efforts. If you’ve been in the #price-discussion channel, you know who he is. Since YFLink’s earliest days, he’s been an active supporter of the project. Outside of his involvement in the YFLink ecosystem, Cole works as an associate at BlockVenture — a coalition of universities and venture capital funds. He is also an avid writer, and studied Philosophy at the University of California, Irvine. His interest in cryptocurrencies was first piqued in 2013, and has grown ever since. Twitter: https://twitter.com/coIecp
Roy Blackstone, lead advisor: You all know Roy as a member of Team 01 and as the Head of Special Projects at YFLink. He will be advising Team 07, helping to connect the team with builders looking for investments. He fights for justice. Twitter: https://twitter.com/fillbeforeshill
Joseph Young, researcher: Joseph will be researching early-stage DeFi projects to be considered for potential investments. He has been involved in the cryptocurrency markets as an analyst and writer since 2014. By sharing unique insights, Joseph has built up a large following on Twitter: https://twitter.com/iamjosephyoung
Nick Chong, researcher: He is analyst working for a cryptocurrency venture/prop trading fund and for industry publications. For LINKPAD, he will be researching DeFi projects.
Some notable advisors to LINKPAD will be announced in a subsequent post.
So, what’s so special about us?
Individually, we have built countless connections across the cryptocurrency space, with connections to traders, DeFi innovators, and crypto funds within the space. We will be working with our connections to identify early-stage projects with potential to grow in the upcoming DeFi cycle.
The goal is to invest in projects that will be symbiotic with the YFLink ecosystem. DeFi is built on composability: it is important that we invest in projects in all parts of the DeFi ecosystem
We believe we have the connections to identify such investments, and allow the YFLink ecosystem (and YFL stakers) to benefit as a result.
What We Need From You
In the next few days, we will be submitting a governance proposal to the official YFLink governance portal, where you, YFL holders, can vote on our proposal to alter the flow of trading fees and begin expanding the YFLink ecosystem.
If you have any questions about what LINKPAD will entail, please direct questions to us via Discord and Twitter. Our handles are as follows:
Cole: Cole#4505 / @coIecp
Roy: Roy#1776 / @fillbeforeshill
Joseph: iamjosephyoung#9424 / @iamjosephyoung
Nick: N1ck#1860 / @n2ckchong
- We’re launching a YFLink ecosystem venture fund
- The YFLink governance vault stakers are all Limited Partners (LPs) in the fund
- It will drive more monetary value to the YFLink governance vault
- It will not impact the current incentive structure for YFL stakers
- We’re self-funding it to begin, and in the future it will use a portion of the fees going to the treasury vault to fund it once LINKSWAP launches
We’ll be announcing our first investment, advisory onboarding, and a partnership in a series of upcoming posts!