The YIELD App Q3 Report: Assets double as Bitcoin lands
As we approach our very first anniversary, YIELD App is thrilled to announce we have surpassed even our boldest projections to celebrate 60,000 users and $339.4 million of managed assets (including YLD) on our platform as at the end of September 2021.*
This is up from 45,000 users and $163.6 million of managed assets at the end of the second quarter of the year, representing growth of 33% and 107% respectively. This marks a bold first nine months for YIELD App following our beta launch in December 2020 and public launch in February of this year.
Some of our largest inflows came from the launch of the hotly anticipated YIELD App Bitcoin Fund in July, with total BTC assets on the platform now standing at 988 BTC, valued at close to $42.5 million as of 30 September, 2021. The re-opening of the fund in August also saw one of our biggest days for new user sign-ups, with close to 1,500 new users joining us on August 20th.
In addition, 12,744 Ether (ETH) were deposited into the YIELD App Ethereum Fund with a market value of around $37.9 million, as $14 million USDT and $15.6 million USDC were put into our stablecoin strategies.
We welcomed a growing number of Tier 5 users to the platform, or those that hold 20,000 YLD or more in their on-platform wallets and have access to our highest APYs. The total number of such users grew to 1,964 over the period, making this our second highest single tier demographic.
This is thanks in no small part to our highly competitive APYs, which were raised to 20.5% on stablecoins for Tier 5s during the third quarter of the year as ETH attracts 16.5% and BTC 12% for these top level users.
YLD rewards and rebalancing
The YIELD App APY structure and Tier Rewards Program means that users are rewarded in part with our YLD token, with those that hold more YLD tokens in their wallet earning higher overall APYs. Since our inception, we are pleased to report that over 21.9 million YLD tokens have been earned by our users, with a current market value of $9.2 million.**
As part of our work to support the YIELD App ecosystem and ensure that it continues to thrive, more than 29.9 million YLD tokens have been rebalanced through our treasury rebalancing program. This is up from 17.1 million as of June 30, showing strong and sustained activity throughout the third quarter. Users can monitor our rebalancing program via the following wallet address: https://etherscan.io/token/0xf94b5c5651c888d928439ab6514b93944eee6f48?a=0x1a11848434cafa84a676e70459015407ec15b542
As part of our upcoming Version 2 (V2) platform upgrade, we will be adjusting our YLD rewards programme in order to better manage YLD emissions and inflation. This will involve a full overhaul of our current Tier system that we believe will make for a more dynamic and fluid system that truly rewards loyal users that are invested in the growth and future of YIELD App.
With the updated YLD rewards model coming with the launch of V2, quarterly emissions will reduce by an estimated 60% to 75%. This should prove supportive for long term holders of our utility token, while users can expect to see a boost on their base asset as a result. More details will be published soon.
YLD listings and exchange activities
As we go to press, the YLD token is set to list on global exchange Bittrex, which boasts a 24-hour trading volume of $136.18 million, according to Coinranking. YLD is joining 306 other cryptocurrencies listed on the exchange, including BTC, ETH, DOGE and ADA. YLD can now be bought, sold and traded on a total of eight global exchanges: 1inch, Ascendex, Bithumb Global, gate.io, Uniswap, SushiSwap, Quickswap and now, Bittrex.
Coinciding with our West Ham United partnership announcement, Ascendex (formerly BitMax) also launched a net-buy competition for YLD activity in which users were able to win a share of a 26,000 YLD reward pool for trading the YLD token. This was well received, contributing to increased visibility and volume for YLD.
Marketing and communications
West Ham United
The highlight of the third quarter for YIELD App was the announcement that we are now the Official Digital Asset Wealth Management Partner of top Premier League football club West Ham United, based in London in the UK.
The heavy-weight partnership comes just seven months after the public launch of YIELD App in February 2021, demonstrating the growing attractiveness of digital assets to a mainstream audience across the world.
We are honored to enter into a partnership with West Ham United and work alongside such a prestigious team and organization. YIELD App is one of the very few digital asset managers to enter the exclusive world of sporting partnerships, making this a significant milestone for YIELD App and the digital asset industry as a whole as we reach out to a wider audience.
The deal will see YIELD App featured throughout West Ham United’s communications with its 60 million fans across the world, significantly broadening the reach of digital assets to those that can benefit most from the inflation beating APYs on offer in decentralized finance. You can read more about our partnership on our blog, and keep an eye on our social media channels for regular giveaways.
In coming weeks, we will also announce details of our partnership with Credmark, a decentralized risk modeling platform in DeFi that leverages the data provided by platforms and protocols across the industry in order to generate high integrity, verifiable DeFi risk models.
Credmark brings the risk tools used by traditional financial institutions to the average DeFi user. It tackles one of the problems in the current DeFi space, namely the lack of standards and risk modelling, to provide accurate, complete and consistent data to assess risk in DeFi investment portfolios. By leveraging the wider DeFi community to generate and validate these models, Credmark has created a scalable, trustworthy and decentralized solution to risk modeling.
YIELD App will work with Credmark to run assessments of our own DeFi strategies, and will include the pools in which we deploy some of our users’ funds. Credmark’s research will also help to inform our decisions and build stronger collaborations with members of the DeFi community, working to strengthen the entire ecosystem. More details can be found below in our portfolio management section.
Advertising and growth strategies
Ahead of our planned platform upgrade, YIELD App explored numerous new markets and strategies between July and September. This included building brand authority through paid opportunities in key media outlets such as Beincrypto, bitcoin.com, u.today and blocktempo.
The digital marketing team also began building a long-term, qualitative brand awareness strategy on Reddit and scaling this up month-on-month ahead of the launch of our V2 upgrade. Meanwhile, we have carried out a month-long visibility campaign with the crypto-friendly Brave browser. In addition, the team is running paid-ad campaigns in multiple countries including New Zealand, Australia, the UK, Canada and Poland, in order to maintain visibility and explore opportunities.
Significantly, September saw the growth team embark on a market penetration effort in India. We at YIELD App believe the Indian market offers significant growth potential over the coming months and years, and our presence there will increase steadily from Q4 as we implement a strategic marketing plan.
Community and social media growth
The third quarter has proved one of our strongest for growth across our community and social channels, with the total number of global YIELDers now standing at more than 96,600 followers, up from 87,000 at the end of the second quarter. This now encompasses regional language groups across the world: from the Netherlands to Italy, the Balkans to Russia, India to Indonesia and Turkey and Nigeria.
In addition, our dynamic long-form written content, videos and social media campaigns have helped us to grow our impressions and engagements across our global channels significantly, with a renewed focus on infographic and educational content yielding strong results.
Global community members
Global impressions and engagements
The deployment of rich, educational content across all of our channels has combined with the efforts of one of our key hires of the quarter, our social media manager Grigory Prelovskiy, to propel both impressions and engagements in our key social media platforms.
Across Twitter, Facebook, Instagram and LinkedIn we saw impressions grow 16.5% to 3.8 million between July and September, while engagements grew 8.4% to a total of 95,206. By focusing our attention on visually engaging content we have grown our Instagram the most, with impressions and engagements up 137% and 121.6% respectively in the third quarter compared to the second.
Regional community members
WeChat groups: 2,416
Telegram Simplified Chinese: 1,889
Telegram Traditional Chinese: 633
Sina Weibo: 468
Telegram Vietnam: 452
Telegram India: 409
Telegram Philippines: 323
Chinese language Instagram: 265
Telegram Korea: 253
Telegram Malaysia: 98
Telegram Indonesia: 91
Telegram Hong Kong Cantonese: 31
European language groups
(All Telegram communities)
Africa and the Middle East
(All Telegram communities)
Thanks to a strong PR push in the region combined with the efforts of our dedicated Asia growth team, we had particular success in Asia this past quarter. Membership of our Traditional Chinese language Telegram groups grew by 65%, while our user-base in Taiwan was up 363%.
We also launched a Chinese language IG for localized content and campaigns, including a Mid-Autumn Festival campaign that was warmly welcomed by the community. Our West Ham partnership was also enthusiastically received in Asia and featured on the front page of Block Tempo, with the press release published on Yahoo Taiwan, Jinse Finance, ChainNews, Huoxing Finance, Grenade and Zombit.
Influencers have long been a key part of our strategy at YIELD App and this quarter we have partnered with key opinion leaders from across the world, including Ken Mack, Mauro Caimi, FunOnTheRide, Mike Satoshi, Madcripto MX, Satoshi Stacker, GirlGoneCrypto, Jason Pizzino, Marvin Favis and La Mejor Estrategia Cripto.
We have also continued our long-term partnerships with two Polish influencers: Piotr Ostapowics, and Maciej Tomczyk, who have helped us to engage with and grow our Polish user-base - now a top five region for YIELD App.
Branching out to new platforms, we have tentatively dipped our toes into the world of Tik Tok through our successful campaign with Tik Tok influencer djislessthan. Currently, his video featuring YIELD App has over 28,000 views.
Giveaways initiated through influencers also continued to prove popular, including our first in the Central and South Americas region with Madcripto MX of Mexico as well as a European campaign with Maciej Tomczyk of Poland. Overall, our work with influencers directly led to a total of 13,070 new users joining us over the quarter.
Media and events
Our biggest media event of the third quarter came from our partnership with West Ham United, which saw us feature in mainstream and cryptocurrency media across the world, from Yahoo Finance to Business Wire China to Cointelegraph and Bitcoin.com. This campaign saw us reach more than 313,000,000 unique monthly visitors (UVM) and 7,614 journalists with a total media engagement of over 24,500.
Our CEO Tim Frost continued his regular commentary and media appearances, garnering coverage in Reuters, Forbes, Business Insider, CNN Brasil, Capital.com and The Daily Express newspaper in the UK. He also made appearances in interviews with influencers including Mike Satoshi in Poland and Joel “Coach K” Kovshoff.
Meanwhile our head of communications Rebecca Jones and chief marketing officer Adrien Geneste featured on New Kids on the Blockchain, talking about our Bitcoin fund and West Ham United partnership, while our chief growth officer Jan Strandberg shared his thoughts on the future of decentralized property with beincrypto.com.
July to September also saw us revive our YouTube channel, which now boasts more than 7,000 subscribers. Throughout the quarter we have invited guests from across the crypto and FinTech world to speak to us about the hottest topics in digital assets on our regular show, “Fridays with YIELD App”. This, combined with regular live AMAs featuring our CEO Tim Frost and frequent user webinars helped to propel video views over 12,800 for the period.
As our total managed assets continue to grow alongside the addition of new individual users, institutional customers, and soon new coins, tokens and currencies, we feel that more transparent reporting of our risk and allocation methodologies will benefit our community. As such, we are pleased to share this increased visibility in this report.
Over the third quarter, the portfolio team allocated into and rotated positions across 18 approved DeFi market neutral pools. This was alongside allocations to multiple liquid alpha strategies with approved external managers via in-kind subscriptions, comprising three different underlying base assets with a concentration risk ranging between 0.2% and 2.2%. The overall risk spread of the portfolio is designed to achieve market neutral exposures and consistent risk adjusted returns.
Our APY generation has remained healthy, and this was reflected through an increase in base rates for ETH to 6.5% and stablecoins to 10.5% toward the end of the quarter as the overall market recovery from May’s market pullback has continued. We will continue to adjust rates both up and down depending on market conditions to ensure that our annualized rates are sustainable, which remains our highest priority.
Bitcoin and Ethereum funds
Q3 marked the launch of our hotly anticipated Bitcoin fund, which pays an APY of up to 12% depending on a user’s tier level. We opened the fund for two separate fundraising rounds in July and August, each for a limit of 500 BTC. The first round saw us open the fund to investment from our Tier 5 members only for the first 72 hours, then our entire user base for the remaining 48 hours, with the allocation filled ahead of time.
The initial launch was carefully orchestrated to ensure our portfolio managers were able to find the highest yielding and most sustainable opportunities for our BTC fund. Assets were then deployed for a closed period of 90 days, with withdrawals considered on an application only basis.
We launched a second fundraising round on August 20, which also saw us fill another 500 BTC allocation that was deployed within the same locked period, ending October 10. The fund was opened for both withdrawals and investments from October 10 to 15, as this report goes to press. It will then be locked again for another 90 days, until January 15, 2022.
As highlighted above, our flagship Ethereum fund attracted over $40 million of assets between July and September, reflecting the market-leading APY it continues to pay. This was adjusted throughout the quarter, with the base APY being adjusted both up and down in line with market conditions.
The DeFi team has added a proprietary automated social media, sentiment and news capture/analysis tool to its research arsenal, which provides a continuous stream of actionable data directly into our analytics repository. This establishes what we are referring to internally as the “heartbeat” of DeFi. This aggregation of thoughtfully curated information has enabled our DeFi team to enhance operational agility, the forecasting of market saturation metrics, reward decay, key governance proposals, and more.
We have contracted a highly respected professional fund due diligence (DD) and audit service provider to conduct on-site and remote DD on fund managers that we are interested in adding to our portfolio family. We receive comprehensive reports on each manager, which are then reviewed for further discussions around investment sizing and timing where the strategies make sense for us given the market environment reflected across our overall portfolio positioning and risk profile.
Between July and September, our DeFi portfolio management team rolled out an enhanced DeFi risk modelling analysis suite, which builds on the existing framework developed since our launch. This latest iteration of our five key-pillar assessments (smart contract, platform, counterparty, financial and credit risk) plots and scores dozens of key data risk points.
These are continuously regression tested to ensure that all protocols and pools that are analyzed by our DeFi portfolio managers meet our rigorous security and alpha generation thresholds. These are then approved by the investment committee and hard coded into our portfolio management system. The continued iteration and development of the risk assessment framework is of utmost priority, particularly as we see new and exciting innovations coming to fruition in decentralized finance.
Due-diligence and diversification
Custodial wallet insurance through providers such as BitGo or Ledger Vault is widely cited by providers of decentralized investment platforms as a component of their security mix. This cover is valuable for assets that remain inside these wallets and vaults. However, in order to be invested and generate a return, user assets need to be moved to a range of external protocols, managers or chains offering the best opportunities. Once this happens, assets are no longer covered by custodian insurance.
With this in mind, the technology and business processes that support this transposability become critical. As our managed assets have grown, we have expanded the pool of liquid strategy offerings that generate returns within our portfolio. We have also undertaken extensive institutional grade operational and investment due diligence on several external managers to provide a complimentary mix of quantitative trading, spread trading and basis arbitrage strategies.
In our Q2 report, we touched on our utilization of diversification as a key component of minimising volatility while protecting overall portfolio returns and assets invested in the market.
Our diversification strategy encompasses our DeFi allocations, described above, and our expanding fund-of-fund capability, led by our newly appointed CIO Lucas Kiely.
The overall asset allocation weightings are continually reviewed to meet our investment objectives. Typically, our portfolios are spread across 20 to 40 positions and are further diversified within these exposures by the base assets. The benefits of this approach significantly reduce overall portfolio risk exposure into single points of failure.
Insurance reserves and auditing
Since our launch, YIELD App has built up a pool of reserves to specifically protect user funds should an event occur among these positions. As of September 30, this protection pool is valued at USD $3.7 million, which constitutes a 1% annualized contribution of net monthly deposits matched 1:1 in YLD tokens. If and when such an event does occur, funds from this protection pool would be distributed pro-rata to users affected by the event.
To provide further transparency and assurance to our users, we have also entered into a partnership with top blockchain auditing and accounting firm Armanino to produce independent audits of our balance sheet and reserves. Armanino is one of the top 25 largest independent accounting and business consulting firms in the United States and counts leading blockchain companies and exchanges among its clients. We will publish their first proof of reserves audit in our Q4 report, due January 2022.
As mentioned above, in the coming quarter we will also be working with a decentralized risk modeling platform, Credmark. This partnership will drive continued evolution in the way we assess risk across opportunities in the market place here at YIELD App. We pride ourselves on the due diligence and analytical processes we undertake in our risk mitigation strategies and believe this partnership will further strengthen our capabilities. It also underlines our commitment to keeping customer assets safe through numerous means, including active collaboration with thought leaders in decentralized finance.
Corporate business development
Product and platform development
This quarter saw us implement our first fiat currency on-ramp capability through On-ramper. This is a temporary solution designed as a stop-gap while we finish development of our own, more cost effective fiat rails. Nonetheless, it has proven quite popular, demonstrating the premium that ease and convenience can attract in the often complex digital asset ecosystem.
As part of our long-term growth journey, we have also built an in-house wallet solution to replace BitGo, our current cold wallet provider. This new core competency is a multi-asset, cross-chain compatible proprietary wallet infrastructure that resides within a single YIELD App technology and data ecosystem. This provides the flexibility to both protect users’ funds under custody and deploy capital efficiently.
The new wallet is a core component within our ring-fenced data infrastructure that includes data centres, chain dedicated nodes, a proprietary portfolio management system, bespoke hardware security modules, user databases, product engines and a regulatory risk management suite.
Along with a raft of new capabilities including automatic compounding, cross-blockchain wallets and transfer capabilities, more on-platform digital assets and the above mentioned user Tier system re-structure, the new YIELD App wallet will be deployed with the launch of our V2 upgrade.
While we know some users are disappointed that V2 is not yet live, as we explained in our latest AMA, V2 has required a root-and-branch rewrite of almost every piece of code that underlies the YIELD App platform. As we have grown much faster than we anticipated, so too have our needs. As such, the V2 upgrade has become a more critical update that must be completed with the utmost care and attention to detail.
Seasoned crypto investors are all too aware of the high cost that a hastily written piece of code in a smart contract can have for users exposed to an exploit: this is not a risk YIELD App is prepared to take. As such we ask for the continued patience of our users whom we are confident will see their expectations surpassed upon V2’s final launch.
Compliance and licenses
We were pleased to move forward on our regulatory journey this quarter by joining the Global Digital Finance (GDF) Advisory Council. The GDF is a leading industry association that drives acceleration and adoption of digital finance by engaging with the global ecosystem, including regulators, policy makers and agencies, to establish and promote industry stewardship, regulatory certainty, and best practices and standards for digital assets.
Its extensive network of members and partners complements YIELD App’s global strategy, and YIELD App’s COO and CFO Justin Wright will join the association as a co-chair of its new DeFi working group. As part of the GDF Advisory Council, YIELD App will contribute to a growing awareness of both the benefits and challenges that currently surround digital assets and build bridges between all sections of the industry.
Our corporate and institutional clients continued to grow between July and September, turning to YIELD App for treasury and investment purposes. We are now serving well over 60 clients in this segment, ranging from blockchain companies to traditional investment vehicles to family offices across Europe, Asia and Australia.
Over half of institutional funds are in ETH, while our corporate treasury clients prefer stablecoin deposits. For fiat-native clients we facilitate conversion from fiat currencies into digital assets by way of over the counter (OTC) trades.
In the near future we will deploy a targeted campaign to better inform the corporate and institutional market of the benefits YIELD App can offer in terms of diversifying an investment portfolio or as a corporate treasury tool.
For many, diversifying a portion of treasury assets to a fund paying 20.5% APY on stable assets is a welcome addition to a wider treasury strategy. Be it corporate, institutional or individual clients, YIELD App is fully equipped to provide this diversification and we will be working to disseminate this message in coming months.
Key staff hires
This quarter we welcomed some new key members to the team, including our new CIO Lucas Kiely. Lucas was formerly chief investment officer at Diginex Asset Management. He has a strong background in traditional asset management, having worked as a senior trader and managing director at Credit Suisse in Hong Kong where he was responsible for QIS and Structured Derivatives trading, as well as head of exotic derivatives at UBS in Australia.
Lucas began his career as a software engineer developing trading and risk management systems for some of Wall Street’s biggest investment banks, as well as developing the auction and entertainment booking technologies at Lastminute.com.
As CIO, Lucas will be responsible for overall investment portfolio allocations, as well as building out a more diversified investment product offering that will provide exciting investment opportunities for our users. He will be supported by our DeFi portfolio team, which we have strengthened throughout the quarter as our managed assets have grown in line with our user numbers. They are supported by hires in our fund research and compliance departments.
We also welcomed a new social media manager, Grigory Prelovskiy, who has already grown our global reach and enriched our content strategy despite being with us only for a few short weeks. In addition we have added to our growth and business development team headed by our CGO Jan Strandberg. We plan to continue to strengthen this department in the coming quarter as we seek out new growth opportunities in untapped regions and corners of the industry.
“This has been another exceptional quarter for YIELD App and our dedicated and growing team of digital and traditional asset professionals. We have seen our managed assets double over the period while we have implemented the fiat on-ramp that our community has called for and which will help us achieve our mission of taking DeFi to everyone, everywhere. This is all while also rolling out a Tier 1 partnership with one of the world's most beloved football clubs.
“While we recognize some users will not be happy that the full V2 upgrade has not yet been rolled out, as I explained in our most recent AMA, this has become a far more pivotal and crucial upgrade that must be executed with zero mistakes. I can personally assure all of our users that our developers are working around the clock to ensure V2 is delivered as soon as it can be while ensuring these non negotiable standards are met.
“We now look forward to another very exciting quarter, in which we plan to strengthen our partnerships across the industry, increase transparency of our portfolio and auditing procedures and launch campaigns to reach more and more institutional and corporate clients. In less than a year since our public launch I couldn't be more proud of what we have achieved and I look forward to another quarter of strong growth and stellar achievements.”
Do you want to make 8% - 18% APY on your USDT, USDC, ETH and BTC? Sign up for a YIELD App account today!
*All figures in this report represent platform assets and market values as of September 30, 2021. BTC and ETH values are taken from coingecko as the last time of the day.
**YLD value at $0.42 September 30, 2021