Most decentralized finance (DeFi) staking platforms enable users to earn yield proportionate to the amount staked. Powered by the native Non-Fungible Yearn token (NFY), the Non-Fungible Yearn platform aims to create an environment whereby yield is linked to a non-fungible token (NFT) instead of a wallet address. This opens up an array of new opportunities for NFTs, yield farming, and DeFi! Furthermore, these NFTs will hold the rights to staked funds and the yield that is earned from them.
Until recently, NFTs have largely been used for creating virtual economies, in-game assets, and collectibles. However, the use cases for NFTs have increased dramatically in recent months. Using the Ethereum-based ERC-721 token standard, Non-Fungible Yearn is pioneering a new wave of NFT-based staking.
In this article, we’re going to explore the Non-Fungible Yearn platform and the Non-Fungible Yearn token (NFY). Also, we’ll discuss the increasing adoption of non-fungible tokens (NFTs), the different types of NFTs, and their various use cases.
Non-Fungible Yearn is bringing a new wave of innovation to decentralized finance (DeFi) and the crypto industry. If you would like to learn more about how blockchain operates on a foundational level, check out the Bitcoin & Blockchain 101 course at Ivan on Tech Academy! With simple easy-to-follow video-guided tutorials, our courses offer a variety of mediums to suit different learning styles.
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What is Non-Fungible Yearn?
Non-Fungible Yearn is a decentralized finance (DeFi) protocol creating new use cases for non-fungible tokens (NFTs) within the DeFi sector. At present, the decentralized finance industry predominantly features use cases for fungible tokens, largely, ERC-20 tokens (explained below). Non-Fungible Yearn is hoping to change this by introducing NFTs that can be implemented with DeFi protocols on Ethereum.
Doing so opens up a new paradigm of financial features for investing. Most staking funds are assigned to crypto wallet addresses. However, Non-Fungible Yearn is making it possible for unique non-fungible tokens (NFTs) to hold the rights to staking funds. Non-fungible tokens (NFTs) can be used across an array of industries. The main use cases at present are in blockchain gaming, art, collectibles, and the music industry. However, Non-Fungible Yearn’s innovative model is bringing additional use cases to NFTs in the decentralized finance (DeFi) industry.
ERC-20 Tokens Vs ERC-721 Tokens
Non-Fungible Yearn appreciates the dominance, confidence, and demand for ERC-20 tokens. But, what are ERC-20 tokens? What’s the difference between ERC-20 tokens and ERC-721 tokens?
Token standards are a pre-set framework for developers. They provide a standard for new tokens that are interoperable within the Ethereum ecosystem and current applications. “ERC” stands for “Ethereum Request for Comment” with the number “20” representing the proposal identifier. ‘ERC-20’ is an open-source token standard used by developers to design fungible currency tokens deployed on the Ethereum blockchain. Fungibility means interchangeable and can be used as a medium of exchange.
On the other hand, the ERC-721 token standard represents a unique data set. Whereas ERC-20 tokens are designed and used as cross-chain interoperable Ethereum-based currency tokens, the ERC-721 standard is representative of non-fungible tokens (NFTs) built on the Ethereum blockchain. Unlike ERC-20 tokens that are used as a medium of exchange and are divisible into smaller units, NFTs are not. NFTs represent a unique asset. This could be digital, virtual, on-chain, or off-chain. Also, NFTs display cryptographically verifiably scarce assets, with a set amount that can ever be minted. Plus, thanks to blockchain technology, NFTs can not be duplicated, manipulated, or altered once minted on-chain.
Non-Fungible Yearn (NFY) Token
The native Non-Fungible Yearn token (NFY) is an ERC-20 cryptocurrency used by all parties involved in the Non-Fungible Yearn platform. The NFY token plays several different roles. Firstly, the NFY token is used to pay for network fees when interacting with the trading platform. Also, the NFY token is used as rewards for developers, alongside community activities rewards too. Moreover, NFY token holders receive governing rights allowing users to vote on future proposals to the platform. Token governance has yet to be implemented. However, it is high on the list of priorities for development from the Non-Fungible Yearn team.
The NFY token has a circulating supply of 72,593 with a maximum supply of 100,000, according to CoinGecko. With a market cap of $23.6 million, the NFY token price is approximately $300, at the time of writing. As the NFY token is ERC-20 based, all transactions and movement of tokens are completely transparent and available to view through Etherscan.
Staking with Non-Fungible Yearn
When navigating the staking facilities on the Non-Fungible Yearn platform, there are several pools to choose from. Each pool hosts various cryptocurrencies, where users can stake and make a passive income with their crypto, earning the native cryptocurrency of the Non-Fungible Yearn platform, the NFY token.
However, the Non-Fungible Yearn platform staking is a different experience to most crypto staking protocols. When users deposit their crypto into an NFY staking pool, they are rewarded with a newly minted non-fungible token (NFT). The NFT represents their stake funds and earned yield. The NFT with its unique token ID holds the rights to the funds. Moreover, when it comes to users wanting to stop staking for whatever reason, there is no need to unstake the funds!
Removing Staked Assets
Users can transfer their NFT, worth the entire amount of assets it represents, and sell on an NFT marketplace. Further, NFT holders are offered the choice as to whether or not rewards are added to the NFT upon claiming their stake. Alternatively, holders can sell on the NFT and keep the earned staking rewards. Non-Fungible Yearn allows users to stake their crypto as an NFT and earn rewards. Then, users have the choice to sell on the full, or partial value of the NFT.
As all the transactional data recorded on the blockchain is stored in the form of a non-fungible token (NFT), users can sell partial amounts of the value of their NFT, whilst still holding on to their original NFT. The value will be either transferred to the buyer’s NFT, or, to a newly minted NFT for a new buyer without a prior NFT. The project’s staking model means users don’t have to unlock their stake before selling it on an exchange. Rather, users can stake their crypto assets, then sell their full or partial stake value directly. For frequent traders and investors, this can save a lot of time and money on unstaking fees. However, there is the option to unstake assets from the staking pools should users wish.
Non-Fungible Yearn has made it clear that there are no transaction fees when transferring any non-fungible tokens (NFTs) or NFY tokens. However, there is a small fee (denominated in the NFY token) when interacting with the trading platform. As NFTs are not divisible, Non-Fungible Yearn will take a flat fee from the value of the NFT before each trade is confirmed. The current transaction fee is 0.25 NFY. The fees going back into the project are split between the rewards vault, developers, and the community fund.
Similar to the staking model, Non-Fungible Yearn offers users the ability to earn rewards as liquidity providers (LP) of the NFY/ETH token pair. Users can provide their tokens to the NFY platform where the rewarded NFY/ETH LP tokens will be locked into the platform eternally. However, the value of the NFY/ETH LP tokens remains as a wrapped ERC-721 non-fungible token (NFT) representing the value of the liquidity provision. Furthermore, all related data and transactions around the liquidity provision will be immutably stored in the NFT.
If users decide they no longer wish to be liquidity providers, they can easily trade their non-fungible token (NFT) for the combined market value of the liquidity tokens and the accrued rewards.
As with the staking facilities, users do have the option to unstake their liquidity as opposed to trading it as a non-fungible token (NFT). To do so, users will need to complete the unstaking process, during which the representative NFT is burned. Any unredeemed rewards and the staked funds will be returned to the user almost instantly. Moreover, a 5% reduction in the value of the NFT is taken as a fee from Non-Fungible Yearn to encourage the self-sustainability of the project.
To interact with the Non-Fungible Yearn protocol, you will need to be familiar with the number one Web3 wallet, MetaMask. If you’d like to see a video-guided tutorial led by an industry expert about how to set up MetaMask, check out the DeFi 101 course at Ivan on Tech Academy! You’ll discover how to install and navigate the Web3 wallet with various decentralized finance (DeFi) protocols! Also, to take your DeFi knowledge to the next level, check out our DeFi 201 course to discover yield farming, crypto arbitrage opportunities, flash loans, and much more! Check out Ivan on Tech Academy today!
ImmuBytes Audit Report
With so many new projects entering the crypto space, it can sometimes be difficult to determine whether or not a new token is a scam. That’s why it is paramount to a project’s success to receive an audit of the code to ensure security for its users. ImmuneBytes is a company that has assisted various big-name crypto start-ups by thoroughly completing smart contract audits, security consulting, and penetration testing (think Aave, Uniswap, and Compound!).
ImmuneBytes completed a formal inspection of the smart contracts, line by line, to identify any potential vulnerabilities or security flaws. This could include signature replay attacks, external contract referencing, or unchecked external calls. ImmuneBytes is responsible for ensuring proper logic has been completed throughout the smart contract functionality. Additionally, the process includes analyzing the complexity of the code before deploying it onto a testnet on multiple different clients. Also, ImmuneBytes makes sure all the libraries used in the code are of the latest version.
Each issue found during testing was assigned a severity level ranging from low to medium, and high. However, there were no high-severity issues found during testing and only two medium-level issues. Four low-severity issues were found, but these were quickly resolved and posed no threat to the progress of the project.
Non-Fungible Yearn Platform Summary
Non-Fungible Yearn is a decentralized finance (DeFi) protocol created on Ethereum to bring further utility to non-fungible tokens (NFTs) in the DeFi sector. The project has achieved this by tokenizing various crypto funds that are staked in the pools on the platform, with the option of then selling on the staked funds and accrued rewards, or just partially. Moreover, Non-Fungible Yearn uses this model for liquidity provision (LP) for the Non-Fungible Yearn (NFY) token. Users receive newly minted NFTs that are wrapped with the value of the NFY/ETH LP tokens, then have a choice to either sell on the NFT or go through the unstaking process.
Non-Fungible Yearn has designed an ecosystem that is theoretically self-sustainable. The platform will provide governance rights with the NFY token and redistribute network fees back into the community and development of the project. Non-Fungible Yearn is still in the early days of launching. Plus, with a market cap under $30 million, the platform has massive room for growth and potential. Non-Fungible Yearn is definitely a project to watch during the 2021 bull run!
If you like the idea of programming your own non-fungible tokens (NFTs) Ivan on Tech Academy can help you achieve this goal! For experienced coders, try our Ethereum Smart Contract Programming 101 course! Here, you’ll learn the foundations of the Ethereum programming language, Solidity.