Thread by @DeFi_Made_Here

If you're in DeFi for a while you must have heard how a guy bought a $25,000 boat for free.

Back then self-repaying loans were the innovation, but the space is evolving.

Now you can get an instant upfront yield without the risk of liquidation or losing money.

Let me explain 🧵

1/ The guy from this story used Alchemix loan to buy a boat for his parents.

He deposited $50k DAI and got a loan of $25k alUSD, which he converted to USDC and bot the boat.

Alchemix deposits DAI into @yearnfi and earns yield which is self-repaying the loan.

@yearnfi 2/ Sounds great, what could go wrong?

As per the initial calculations, the loan should have been repaid within 24m. That's 25% APR on DAI!

Do I need to tell you that those APRs are no longer available in DeFi?

At 1.79% APY, that guy will be repaying the loan for 25 years.

@yearnfi 3/ So a "free" boat does not seem to be free anymore.

What if he could have got that 25% yield upfront? And then get his DAI back at a predetermined date or earlier if desired?

All of that is possible with @Flashstake.

@yearnfi @Flashstake 4/ How Flashstake works

After a user deposits his assets into the protocol, he immediately gets:

• NFT which represents his principal.
• fyToken that represents rights to the future yield of the principal.

@yearnfi @Flashstake 5/ When depositing the assets, a user can choose a date until when it's locked and he will get the corresponding amount of yield based on it.

Users can withdraw the original principal at any moment by returning their NFT and fyToken (the payback amount decreases to 0 over time).

@yearnfi @Flashstake 6/ To get the upfront yield swap fyTokens for actual Tokens. There are 2 options for this:

• Burn fyTokens and get Tokens from the yield pool

Tokens deposited into the Flashstake are generating yield (from Aave, Lido, etc), and the yield is redirected into a Yield Pool.

@yearnfi @Flashstake 7/ The only way to get the yield out of the Yield Pool is by burning fyTokens.

If a user owns 10% of all fyTokens, he has the right to burn and redeem 10% of all yield in this Yield Pool.

@yearnfi @Flashstake 8/ Or

• Swap fyTokens through a liquidity pool (eg fyUSDC-USDC)

When a user mints fyTokens from a Flashstake, they can be sold into Liquidity Pool. In this model, LPs are providing this upfront yield so they can earn trading fees and potentially liquidity mining rewards.

@yearnfi @Flashstake 9/ Liquidity providers can set such a range in uni v3 that they will get discounted yield for allowing users to get an upfront yield.

For example, the current yield on stETH is 5%, LPer can provide liquidity in the "4% APR range", so he is getting 25% more yield in the future.

@yearnfi @Flashstake 10/ If stETH APR will go to 6%, then LPer is 50% up! Meaning that he is speculating on the yield.

However, if the underlying yield goes down in price, then the LPer might experience a loss.

@yearnfi @Flashstake 11/ Everything mentioned above is automated on the Flashstake UI so you don't have to think about the complex stuff, except Liquidity Providing.

There is even no UI or link for providing liquidity and it is quite complex for average users.

@yearnfi @Flashstake 12/ At the moment, LPers should provide liquidity in uni v3 or in the @xtokenterminal incentivized pools.

For example, users can provide @Rocket_Pool rETH liquidity and get extra incentives in $FLASH and #rFLASH

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool 13/ It is important to understand the risks, rewards, and tradeoffs of providing liquidity.

As an LPer "you are the yield". The upfront yield. In exchange, you receive rights to the future yield.

More info about LPing in rETH pools can be found here:

https://twitter.com/Flashstake/status/1657483107598209024

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool 14/ I think LP acquisition is a weak part of Flashstake and it would be awesome if they can create some sort of UX-friendly automated liquidity management vaults.

For example, auto rebalancing of concentrated liquidity at 10% below the current underlying yield.

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool 15/ Moving forward, what's the sense of the upfront yield and fyTokens?

Upfront yield allows to lock in a Fixed Rate.

You will not end up in a situation where you deposited at 25% APR and end up with 1% APR.

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool 16/ For example, if you think that 9.8% on USDC is a great deal - take the yield upfront and get your initial deposit at the predefined date or earlier if desired.

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool 17/ You are also getting a Zero-Loss Leverage.

As you are not taking out a loan, unlike on Alchemix, you can not be liquidated by any conditions and your upfront yield is not a debt to be repaid.

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool 18/ You can then use your upfront yield to buy a boat for your parents same as that guy! But you will know exactly when you get your deposit back.

Or buy the same token to leverage your position - all without risking your original principal.

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool 19/ On top of that, you can utilize FlashStake together with other projects to maximize your yields.

For example, with @pendle_fi as explained here:

https://twitter.com/DeFi_Made_Here/status/1643617470098423810?s=20

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool @pendle_fi 20/ So what gives the fyTokens value?

fyToken holders receive the rights to the future yield in exchange for the upfront yield.

It can be also seen as a speculation on the yield or buying discounted yield in the case of LPers.

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool @pendle_fi 21/ Buy discounted future yield tokens and redeem them against the Yield Pool in the future to get a higher yield.

Or profit from selling fyTokens on the open market when yields go up.

@yearnfi @Flashstake @xtokenterminal @Rocket_Pool @pendle_fi 22/ Conclusion

Flashstake enables yield farmers to get the yield upfront without the risk of losing the funds or any interest payments.

And enables liquidity providers to speculate on the future yield or to buy discounted yield at the price they set themselves.

23/ That’s a wrap.

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