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The Yield App Q1 2022 Report: Assets up 20% following successful V2 launch
Yield App is pleased to publish its first quarterly report for 2022, which saw us successfully launch the hotly anticipated Version 2 (V2) of our platform and grow our managed assets by 20%, despite a prolonged market downturn during this period.
Yield App’s managed assets grew from $475 million at the end of Q4 2021 to $572 million by 31 March 2022, marking a 20.4% increase. The platform continued to grow at a steady pace and we expect to see this trend to remain strong throughout 2022.
The three months to the end of March saw us grow our customer numbers further, with 8,200 new customers signing up for the Yield App platform during the quarter. As of 31 March 2022, Yield App counted 79,556 customers among its user base, up from 71,356 at the end of December 2021, marking an 11.5% increase.
The number of Diamond Tier members has seen a steady rise, with 2,825 customers now counting themselves among this elite group, marking a 20.8% increase quarter-on-quarter. Our Diamond Tier members must stake or lock 20,000 YLD or more on the Yield App platform and represent a key focus group for our business, playing a vital role in the stability of the entire Yield App ecosystem.
Our Bitcoin Portfolio once again experienced the strongest inflows during the quarter, with managed assets increasing by 63% from 1,456 BTC at the end of December 2021 to 2,375 BTC by 31 March 2022, representing a market value of $111,775,625 (All asset values are quoted as of 31 March 2022 and sourced from CoinGecko.com).
On Saturday, 26 February 2022, the Bitcoin Portfolio moved to a monthly redemption cycle. Customers can now deposit and deploy their BTC at any time and redeem their assets on a month-end basis, making our Bitcoin offering even more accessible and competitive by providing the added flexibility that our customers have been asking for.
Meanwhile, our stablecoin offering also experienced significant growth during Q1, with total assets managed across our stablecoin portfolios up 33% over the period. The addition of two new stablecoin assets – DAI and TUSD – means we now run four stablecoin portfolios in total.
As before, Ether (ETH) remains our largest asset by market value, with 70,425 ETH now managed on-platform, valued at $235.78 million as of 31 March 2022. This is up from 62,607 ETH at the end of 2021, representing a 12.5% increase quarter-on-quarter.
The Yield App rates structure and Tier Membership Rewards Program are designed in such a way that our customers are paid part of their earnings in our YLD token. During Q1 2022, we are pleased to report that a total of 11,555,972 YLD was paid out as rewards to our customers.
In our founding tokenomics, we originally allocated a pool of 45 million YLD for our Tier Bonus rewards program. These bonus payments on base assets were intended to reward early adopters of the Yield App platform.
Due to our strong growth in the first year after our launch, this rewards pool came to an end in February 2022, at which point we decided to extend the pool by another 30 million YLD to keep paying rewards in YLD to our customers for longer. YLD on YLD staking and locking rewards are paid out from a different pool of assets and are not affected by this change.
During the first quarter of the year, Yield App paid out 7,519,755 YLD of this 30 million YLD rewards pool. We will keep all our customers regularly updated regarding the amount remaining in the Tier Bonus rewards pool on the stats page of our website.
During the first quarter of 2022, Yield App rolled out Version 2 (V2) of the platform, the biggest upgrade to our offering since our launch in February 2021. V2 was officially launched on 18 January 2022, along with a rebranding of the Yield App logo, a spate of new functionalities and a massive YLD lock-up promotion. Below, you will find a full overview of the rollout of Yield App V2.
New V2 Tiers and rates
V2 saw us introduce a whole new Tier Rewards structure, offering the highest earnings potential to those customers who have made the greatest long-term commitment to our ecosystem, while ensuring we continue to reward all our customers with market-leading rates on their digital assets.
The new Tier system divides customers into four tiers – Bronze, Silver, Gold and Diamond. Bronze Tier members are those with 0-999 YLD on the Yield App platform, while those with more than 20,000 YLD have become Diamond Tier members (previously Tier 5). As before, Diamond Tier members earn the highest rates on stablecoins, BTC and ETH.
Staking and locking YLD
One of the biggest changes introduced as part of V2 was the ability to stake or lock YLD tokens for 12 months to earn additional rewards. YLD tokens must now be staked or locked in order to reach a tier, while earning up to 6% p.a. on staked tokens and 12% p.a. on locked YLD (available to Silver Tier members and above).
This change ensures we reward commitment to our ecosystem appropriately, while providing our customers with the earning opportunities to suit their needs and goals.
YLD lock-up promotion
As part of the launch, we introduced a lock-up promotion, allowing all customers who locked up their YLD for 12 months before 1 March 2022 to earn 20% on their tokens for that year, instead of the standard 12%. This promotion was hugely successful, with more than 75 million YLD locked on the platform during the offer period.
The offer has now come to an end, but our customers continued to take advantage of the higher rates available for locking YLD up for 12 months. We now have more than 82 million YLD locked on the platform (as of 17 April 2022), demonstrating the trust and commitment of our valued customers.
Full cycle conversions
With V2, we introduced the ability for those customers who have completed Know Your Customer (KYC) level 2 to convert any of their existing assets for another asset available on the platform, including BTC, subject to a daily limit of $5,000 (USD value). This is another feature which proved to be particularly popular with our community.
New digital assets
V2 also saw us integrate two new stablecoins onto our platform. By popular demand, the first to join was algorithmic stablecoin DAI, while March saw us add TrueUSD. Customers are able to earn the same market-leading rates on the two new stablecoins as our USDT and USDC offerings, with more new assets set to join the platform in the near future.
Control over compounding and earnings
Improving on our V1 functionality, V2 of Yield App gave customers much greater control over their earnings. This includes an auto-compounding feature, which can be toggled on in each portfolio to ensure that all earnings are automatically redeployed into the same portfolio, as well as an auto-deploy option which deploys all deposited assets into the corresponding portfolio automatically.
Enhanced security features
As readers of our previous quarterly reports and blogs will know, security is a top priority for Yield App. V2’s enhanced security features include the ability to set a limit on daily withdrawals, an automatic logout feature, and a customer activity log, with additional features in the pipeline for Q2.
Rewards performance 24h/7d/30d
The new and improved V2 dashboard shows earnings over the past 24 hours, 7 days and 30 days, and in a selection of base currencies to suit the needs of our international customer base.
Following the rollout of V2, Yield App unveiled the option to see the new interface in dark mode upon request from our community. Customers can do this easily by heading to the drop-down menu underneath their username and toggling on the Dark Mode option.
We have continued to add new language versions of our interface to cater to our international customer base. Yield App is now available in a total of eight languages, with Polish recently added to the list, which was welcomed by our Polish community.
Export transactions aligned with Koinly format
With V2, our customers can download a CSV file of all their transactions on the platform for accounting and tax purposes. This is now available in a format aligned with tax software Koinly, making the process of paying taxes on crypto less cumbersome for our customers.
The first quarter of 2022 saw us move our Bitcoin Portfolio to a monthly cycle, where our customers can now deposit and deploy assets at any time and redeem on a monthly basis. This simplifies the Bitcoin deployment process and gives our customers greater access to one of our market-leading products.
Q1 also saw us make the decision to mint 100% of unminted YLD as we looked to dispel questions and doubts about our minting schedule. This was done in March 2022, meaning all 300 million YLD has now been minted. All undistributed YLD will remain locked in a wallet under our control and will continue to be distributed as per our emissions schedule, which remains unchanged, as per the graph below.
We believe this move offers our valued customers greater visibility into all our activities and a better understanding of our ecosystem, ensuring that we maintain an industry-leading level of transparency. While we originally decided not to mint all our tokens at launch, we subsequently realized that this only created unnecessary confusion.
The first quarter of 2021 saw us maintain our long-term focus on capital preservation through the use of market-neutral strategies as we looked to take advantage of a challenging market backdrop. In line with this strategy, we are pleased to share the latest update from our portfolio management team.
Over the first quarter of 2022, the portfolio team allocated into three new strategies, bringing the total number of systematic trading strategies on the Yield App platform to 19. In addition, during Q1 2022 we rotated positions across 16 approved DeFi market-neutral pools and increased allocations to two existing systematic trading strategies.
We only deploy capital to highly liquid alpha opportunities utilizing different tenors and signaling mechanisms across a range of proven external managers with strong governance procedures in place.
The first quarter of 2022 was a particularly challenging time for the broader DeFi market, with year-on-year volumes across Q1 reducing significantly. The graph below (courtesy of our partners at IntoTheBlock.com) highlights the comparative volumes and associated fees generated from Uniswap liquidity providers between Q1 2021 and Q1 2022.
The compression of yield generating opportunities due to the volume reduction in the market has driven a range of participants into higher risk endeavors, trading off additional risk to sustain benchmarked yield performance. However, we firmly believe that this approach does not align with a client-first ethos, which is at the heart of how we operate our business.
At Yield App, the DeFi team continues to operate with client asset safety as its number one priority above all else, adhering to strict in-house risk modeling and capital allocation algorithms in times of high and low volume, without deviation from this approach.
In addition, the DeFi team continues to work on the development of the next iteration of our in-house risk analysis tools. Our current risk suite already provides comprehensive, robust analysis of the inherent risks of capital deployment in DeFi. However, in this rapidly developing space, we acknowledge that there is always room for improvement and development as new technology, products and information continue to emerge.
Our new risk modeling engine seeks to establish an industry standard, outlining best practice recommendations for budding protocols to not only add security to their platforms but garner community confidence by adhering to gold standard operational security procedures during development and protocol deployment.
Liquidity provision and systematic trading
Our external manager allocation is heavily geared towards two strategy types: liquidity provision and systematic trading.
Liquidity provision strategies create a relatively stable and uncorrelated return profile, as they are directionally agnostic. These strategies capitalize on highly fragmented markets, with examples including market-making and arbitrage.
Our systematic trading strategies utilize market signals to inform their positions across multiple strategies. The strategies provide attractive alpha given the inefficiency and volatility across our base assets. These strategies are mostly short-timeframe (hours/days) and use limited or no leverage. Examples include statistical arbitrage and relative value (RV).
As a result of the compression of yield generating opportunities in the DeFi market in Q1 2022, we have increased our allocations to systematic trading and liquidity provision strategies as well as increasing the overall total number of strategies on the platform. At the end of Q1, approximately half of the total portfolio is deployed into low-risk market neutral systematic trading and liquidity provision strategies.
With increased capacity across our portfolio, we are able to deploy our growing capital base across a range of DeFi and CeFi opportunities. This decision proved to be beneficial as we were able to take advantage of the increased volatility across digital asset markets. Our volatility arbitrage, relative value and market making strategies held up particularly well over the quarter. These structural changes provided us the agility required to rotate our exposure to the best performing opportunities whilst adhering to our capital preservation mandate.
Due-diligence and diversification
Rigorous due diligence is a key part of our overall strategy, conducted on all prospective capital deployment opportunities. We only deploy assets into well-proven protocols which have passed our thresholds and ensure our portfolio strategy remains highly diversified at all times to limit unexpected loss to a minimum.
Our DeFi team uses an internal proprietary risk model that focuses on four pillars of security. This model uses a sum of 135 measured variables compiled from historical data to analyze all aspects of market exposure and ensure our balance sheet reserves outperform our customer liabilities over the medium and longer term. More information about our due diligence process can be found in our blog article, linked below.
Diversification is a key element of our strategy, allowing us to minimize volatility and spread risk in order to protect overall portfolio returns and our customers’ assets. Currently, our portfolio management team is conducting due diligence on three new strategies, which will further increase diversification across our portfolio through Q2.
The first three months of 2022 have witnessed many developments in the international regulatory landscape for digital assets. Starting with global deployment of sanctions against Russia following the aggression in Ukraine at the end of February, and continuing with the long-awaited Executive Order on Ensuring Responsible Development of Digital Assets being signed by the US President Joe Biden, these developments have paved the way for enhanced regulatory oversight and increased supervision capabilities for enforcement actions by the US regulatory bodies.
A surprising move by Switzerland, which has been traditionally known as neutral on the economic world stage, made the headlines when it announced its own sanctions and restrictions on Russia and Russian entities and individuals. Singapore and Australia joined the sanctions regime in late March, while the Caribbean nations have recently made public their position and requirements on the matter.
The latest global sanctions imposed on Russia and Belarus and the stricter enforcement actions of the UK, which has seized a large number of assets held or controlled by Russian oligarchs and their family members, have accelerated the need for regulatory outreach on digital assets regimes. In addition to Switzerland and Germany, Estonia is the latest European country to introduce a mandatory requirement for the “travel rule”, requiring digital asset service providers to undergo additional due diligence on digital asset transactions.
The digital assets space has also seen a new consultation paper on DeFi proposed by the Financial Services Regulatory Authority in Abu Dhabi and an intensification of the discussions for implementation of MiCA by the European Union, as well as a shift of focus by European regulators towards the acceptance and correct registration and licensing of entities operating in the digital asset sector.
Yield App is actively monitoring all global regulatory updates to ensure international compliance with all applicable regulations. In addition to our internal compliance efforts, Yield App is an active voice and advocate in the digital assets space for more inclusive and adequate regulation of the industry, conscious of adhering to our original objective of providing a simple offering that demystifies the process of accessing and benefiting from the opportunities available across the broader digital assets financial ecosystem.
To deliver on this, ensuring consumer protection and embracing the fast evolving regulatory landscape are critical. During Q1, we are pleased to announce the addition of Malcom Wright, Vice Chair of the Advisory Council at Global Digital Finance and former Chief Compliance Officer at BitMEX, to our Advisory Board. Malcom’s pedigree spans over 25 years of work experience, including traditional financial institutions, a challenger bank, a number of digital asset businesses, as well as deep regulatory expertise. Malcolm is the founder of InnoFi Advisory, an independent crypto consultancy, and sits on the boards of several digital asset service providers.
Meanwhile, in his ongoing role as co-chair of the GDF DeFi working group, Justin Wright, our CFO/COO, contributed an article to the 2021 GDF annual report, ‘Digital Money and Nextgen Market Infrastructure’, published on 31 January 2022. The report can be read here.
Marketing and communications
The biggest campaign of the quarter for Yield App was the hotly anticipated launch of V2 of our platform, alongside the YLD lock-up promotion outlined below. Leading up to and following the launch of V2, we shared blog and video content outlining the new features and walking customers through the new interface, as well as information about the new Tier system and V2 rates. V2 came with a full rebrand of our logo and graphics, including new eye-catching banners on all our blog content.
YLD lock-up campaign
Between launching V2 and 1 March 2022, we ran an extensive campaign advertising our YLD lock-up promotion. Customers who locked up their YLD for 12 months before 1 March would earn 20% p.a. on their holding. We advertised the promotion across our social media channels and on our weekly newsletter, with great success. Between 18 January and 1 March 2022, some 75 million YLD was locked up on the Yield App platform to earn the promotional rate.
Yield App birthday
In February 2022, Yield App turned one year old. To celebrate our first birthday, we ran a social media campaign with a timeline making the key events of our first year since launch, including reaching 75,000 customers and hitting $500 million in managed assets. For this campaign, we shared a timeline of Yield App’s first year since launch on our socials and newsletter.
In March, we added TrueUSD to the Yield App platform, increasing the total number of portfolios we offer to six, four of these being stablecoins (USDT, USDC, DAI and TUSD). To promote this move and raise awareness of our growing stable of assets, we ran a live AMA on the TrueUSD Telegram channel on Friday 18 March 2022, with our CEO Tim Frost and our CMO Adrien Geneste. We also ran a launch campaign on our social media channels.
Our first steps into NFTs
In February 2022, we made our first foray into the burgeoning NFT space with our very own limited edition NTR1-Meta custom phigital sneakers, developed in partnership with Swappable NFTs. Yielders will be able to wear these sneakers in the metaverse, or burn the NFT to redeem a physical pair to wear in real life. This move literally marks our first steps into the metaverse, with various campaigns planned for Q2 to give our customers the opportunity to win a pair of these limited edition sneakers.
Community and social media
In the first quarter of 2022, the focus of our social media strategy shifted from quantity firmly towards quality as we strive to build a resilient long-term community of Yielders. As such, we published 35% fewer posts across our social media channels, favoring insightful and educational content over short-term headlines.
This strategy paid off, as we saw our engagement rate – a key metric which shows the level of interaction our audience has with our social content – rise to its highest level since Yield App was launched. At 3.9%, our engagement rate in Q1 2022 was 13.5% higher than it was in Q4 2021, and 70% higher than a year ago. Our engagement rate continues to grow steadily, despite a 2.9% decline in our follower numbers on Twitter quarter-on-quarter, and we were mentioned on Twitter 57,282 times during Q1.
As part of our strategy to focus on engagement with active Yield App customers rather than followers who do not use our product, we have also been doing fewer and more targeted games and giveaways on our social media channels with the aim to reward loyal Yield App community members, which has resulted in a reduction of our total follower numbers. We firmly believe that this new direction for our social media strategy goes hand in hand with our aim to build strong, long-lasting relationships with our customers.
Media and events
The launch of V2 in January drove up our media activity, with editorial mentions up 46% during that month compared to December, while potential reach increased by 53%. Notable mentions include an article on BeInCrypto entitled ”Yield App Launches V2, With More Than a New Look”, with a reach of 2.8 million, which helped drive positive sentiment towards our brand. January also saw our social exposure increase by 55%.
Our global coverage increased especially in Taiwan during the quarter, after Yield App was named Digital Asset Management Platform of the Year during the “Hit AI & Blockchain” Summit in Taipei, Taiwan, which took place on 5 January 2022. The award was presented by You Si-kun, President of Legislative Yuan, Republic of China (Taiwan).
In-house, we remained active on our YouTube channel with our live Ask Me Anything (AMA) sessions featuring our CEO Tim Frost, CMO Adrien Geneste, and our COO/CFO Justin Wright. Our special AMA answering all questions about our V2 launch, transmitted live ahead of the planned upgrade of our platform, garnered more than 1,800 views.
Q1 saw Tim featured on several podcasts and video channels talking about Yield App V2 and sharing his opinions on the digital asset space. Notable mentions include Crypto Pulse and an interview on the Paul Barron Network.
During the quarter, we initiated our sponsorship of Henri Arslanian, a keynote speaker with deep roots in FinTech who leads several podcasts, conducts Ted Talks and shares his views extensively in financial media. The sponsorship will see Yield App’s logo present on his website and landing pages, as well as mentions in podcasts and videos.
In addition, the first quarter saw us begin our marketing efforts for several events in which Yield App is participating in Q2, including Bitcoin Miami (6-9 April) and the Paris Blockchain Week Summit (13-14 April). We will give a full update on our growing event presence in the next quarterly report, but suffice to say this is proving to be a successful strategy for growing our global reach.
Finally, during Q1 we demonstrated our engagement across the whole digital asset ecosystem with two new interview series on our blog. We celebrated International Women’s Day on 8 March 2022 with a Q&A series profiling successful female leaders in crypto, kicking off with Jenna Pilgrim, CEO of Rite Network, publishing three pieces in total to date. On 29 March, we followed with a second interview series with digital asset experts, profiling Didier Pironi, Product Manager at Ref Finance. These interviews will become a regular feature of our content going forward.
Corporate business development
Our corporate and institutional clients continued to grow in number during Q1, counting more than 100 clients as of the end of March. We serve corporate and institutional clients across Europe, Asia, and Australia, helping them manage their corporate treasuries and protect these assets from the rampant inflation across developed regions.
Corporate and institutional assets now represent more than 9% of our total asset base, up from around 5% at the end of Q4, with 60% of these assets allocated to our stablecoin offerings. Stablecoins remains the preferred digital asset for our corporate treasury management clients due to their lack of volatility. Some 21% of these assets are held in BTC, while more than 16% is allocated to ETH. To facilitate the seamless transition from fiat into digital assets, we assist these clients with conversions from fiat into digital currencies by way of over-the-counter (OTC) trades with regulated financial institutions.
Relationship Manager program
Our highest Tier members have access to our exclusive Relationship Manager (RM) program, which provides dedicated support and helps us further enhance the personalized service we offer to our clients. We have now assigned a Relationship Manager to the majority of our VIP clients who hold a balance valued at $100,000 equivalent or more on the Yield App platform.
Our Relationship Managers are based across the globe, in France, Poland, Australia, Italy, Netherlands, China, Estonia, Serbia and Indonesia, speaking more than 14 different languages to provide a bespoke experience and tailored support to our most valued clients.
This quarter saw us increase our client-facing team, adding Polish to our list of spoken languages. As the year progresses, we intend to continue expanding both our global reach and the Relationship Manager team to ensure all our communities are catered for. Some of the services offered by our RMs include:
- Assisting in setting up corporate accounts and self-managed super fund accounts (Australia)
- Meeting with client's extended networks to answer questions one-on-one and explore opportunities for them and their businesses
- Ensuring quick and personalized responses to any support enquiries
- Considering feedback and discussing future plans for Yield App's services
- Enabling access and providing support for testing of new platform releases
We continued to grow the Yield App team with several key hires in Q1 2022. These include additions to our software development team, as well as the hire of Thomas Luhn as Financial Planning and Risk Manager, and the expansion of our community facing team with Szymon Blaszczyk, Community Manager for Poland.
Thomas brings with him experience in financial planning and risk management from previous work for financial services organizations across Asia and reports to our Chief Financial Officer, Justin Wright.
Szymon’s addition to the team has been warmly welcomed by our significant and growing Polish community as he focuses his attention on opportunities in the local market. Being able to speak the language of our community members is a key part of our strategy at Yield App.
As we compile this report in mid-April, we are about to welcome a new highly experienced DeFi Portfolio Manager to the investment team, who we believe will be a great asset to Yield App, enhancing the already strong expertise we have on board. We are looking to continue the expansion of the DeFi team as Yield App grows its customer base and managed assets.
We currently have several other open positions, including Senior Digital Marketing Manager, Event Coordinator / Manager, Finance Director and Motion Graphic Designer, and we are always looking for talented Software Developers to join our vibrant and rapidly growing team. Those interested can send their CVs to [email protected].
Yield App has always had a strong focus on building a long-lasting relationship with our community, and the fact that many of our recent hires have come from our community of Yielders reflects this. We firmly believe that those that know the business and use the platform themselves are best placed to serve other customers to the highest standard, with all our staff members using the new V2 Yield App interface extensively on a daily basis.
Dear Yield App supporters,
The first quarter of 2022 brought with it the successful launch of our new and improved V2 platform, with a host of new functionalities developed in response to requests from our community. The launch was as successful as we had hoped it would be, while the YLD lock-up promotion was far more popular than we had expected, with more than 75 million YLD locked up on our platform before 1 March 2022.
I am proud of the product we delivered and thrilled to see the support and trust our community has shown. I assure you, however, that Yield App does not intend to rest on its laurels. We have many more exciting developments planned for the rest of 2022, as we continue to work hard to build out a leading digital wealth platform.
In fact, as I pen this letter in mid-April, we have just rolled out the Yield App Referral Program. This is another key piece of the puzzle for us and a feature our customers have been requesting for some time. We structured our Referral Program in a way that we hope will help us attract long-term clients and help us build lasting relationships, expanding our dedicated community of Yielders further. We look forward to welcoming your friends to the Yield App family, and we believe that the opportunity to earn up to 1,000 YLD in return is a fitting reward.
We have also begun internally testing our mobile app, which will be a key component of our offering and will make the management of your digital wealth simpler and more intuitive. Our development team is working tirelessly behind the scenes to deliver a sleek and user-friendly mobile interface, which will be ready for testing by our community members in the near future.
As readers of our previous quarterly reports will know, Yield App has ambitious plans for the rest of the year. This includes the addition of new blockchains, the implementation of advanced fiat rails, and the further expansion of our asset offering.
Yet I am keen not to forget how much we have achieved just over one year since our public launch in February 2021. These 12 months saw us grow our business to more than $500 million in managed assets, with over 75,000 customers globally, building a reputation for providing strong, sustainable passive income on digital assets to customers across the globe.
We couldn’t have done this without our supportive and patient community, and I thank you all once again for believing in us and look forward to serving you for years to come. I can’t wait to see what the rest of 2022 brings as we continue to build out our proposition and add further improvements to our service. As ever, we always welcome feedback from all of you to help us ensure we offer exactly what our community needs.
CEO of Yield App