APY Finance Liquidity Surges to $80 Million Hours After Launch

The latest DeFi hype is APY Finance which is another staking and liquidity providing protocol offering big returns similar to those before it. Launched on Oct 1, APY aims to lure early adopters to deposit USDT, DAI, and USDC stablecoins into its liquidity contract to begin vesting its APY governance token, which has yet to be deployed. In a recent tweet, APY Finance stated that it had already accrued over $67 million in the first hour after launching:

Our first hour of launch has brought over $67m in TVL to the $APY liquidity mining program!

Stake your stablecoins at https://t.co/gdK6KULEpA today to start earning $APY!

— apyfinance (@apyfinance) October 2, 2020

At the time of press, TVL on the platform had just topped $80 million with equal amounts of Tether and USDC, with Dai coming in third.

Is APY Finance Any Different?

APY touts itself as a DeFi ‘robo-advisor’ that optimizes for risk-adjusted returns using a portfolio of yield farming strategies, which is very similar to what Yearn Finance does. Yield farmers depositing stablecoins will receive APT tokens which represent their pool holdings. Just like Curve’s LP tokens or Balancer’s BPT tokens, these deposits can be redeemed by burning the APT tokens. In this way, APY Finance was able to bootstrap liquidity before launching pooled yield aggregation and achieve economies of scale savings farming strategies that are to be enabled later this year. The APY token is what it’s pushing here, but on the surface, it appears to be aping existing platforms with similar distribution and governance targets.

Skewed Token Distribution

Token distribution seems to be heavily weighted towards investors, advisors, and the team with 56.5% of the total 100 million tokens being divided up among them. Just 31.2% has been allocated for public liquidity mining rewards and the remaining 12.3% will go to community initiatives according to the announcement. In a somewhat contrary statement to this token allocation breakdown, the blog post added;

“We have made it a core mission to ensure that the APY token holder base is large and decentralized.”

There has been no set date for the ‘alpha’ launch but the statement did add that the code has been audited by Halborn, a security firm that recently audited PowerTrade and Bancor v2. When it is launched, the assets currently in the liquidity contract will start to farm and mine APY tokens.