Yield Swaps

Yield swaps involve the exchange of yield generated from an underlying asset, over a period of time, and require at least one party locking LP tokens for the duration.

As an entirely new mechanism on-chain, Yield swaps provide users with various benefits and increase the depth of financial activities found within DeFi, opening new ways to leverage the volatility of the crypto markets through speculation.

Yield swaps on Helix.Finance connect users who otherwise would not have connected with each other, allowing for new possibilities within DeFi

Which Assets Are Used For Yield Swaps

Locked LP tokens <--->Other Locked LP tokens Locked LP tokens <---> HELIX (paid immediately) Locked LP tokens <---> DAI/USDC (paid immediately)

The LP tokens in a yield swap are locked in a contract that collects the yield over the duration of the agreed-upon period, this yield is then sent to the speculator when the underlying LP tokens are returned to the original party.

Negotiation Process

The negotiation process is the same for both LP and Yield swaps, with one small addition to the Yield swap process... the time period for LP locking (and yield generation) must be agreed upon in the Yield swap offer. For further information on the negotiation process, check the image here

At the end of the agreed time both parties receive their assets, with the locked LP tokens being returned to the original party, & the speculator receiving the yield

How To Create A Yield Swap Offer

The basic steps to creating a yield swap are as follows;

• To create a Yield swap you must already hold the asset in your wallet. These can be LP tokens from any ERC-20 protocol, or assets to swap for LP tokens.

• Navigate to the Yield Swaps tab and create an offer

• In the tab provided, choose the asset you are providing for the Yield swap offer, and dictate what you would like in return. Finally, the duration of the yield swap.

• After confirming, you will be notified of any offer acceptances or pending negotiations. Negotiations will take place on-chain, and come with an associated gas fee.