Yield Accruing Positions

Yield Accruing Positions (YAPs) are fungible distributions in which ROOSTER emissions are automatically converted to more of the underlying assets, increasing the value of each LP’s share of the YAP.

How Do YAPs Work?

When an LP adds liquidity to a pool on Rooster, they can choose to set their own distribution or elect to join a YAP. YAPs are preconfigured distributions within the pool that are optimized by parameters such as token pair, fee, and width.

Whereas regular LP positions are recorded on a unique NFT, LPs who join YAPs receive fungible ERC-20 LP tokens representing their share of the YAP. These tokens equate to a pro rata share of the YAP based on its current balance of tokens. While the asset composition of the YAP may change over time (e.g., as more tokenA is sold through to tokenB), the LP will maintain the right to a pro rata share of those underlying assets.

Liquidity in a YAP may receive ROOSTER emissions just like any other liquidity in the pool. The difference is that when ROOSTER emissions are sent to a YAP, they are swapped to the underlying assets according to the current ratio of assets in the YAP. For example, if a YAP in a pUSD/pETH pool was currently 80% pUSD and 20% pETH, any ROOSTER emissions would be converted to an 80/20 mix of pUSD and pETH.

The result of this is that the liquidity in a YAP will increase over time as a result of ROOSTER emissions, meaning that the value of both the LP tokens and an LP’s share of the YAP will increase as well. Since LP tokens represent a pro rata share in all of the underlying assets within a YAP, when an LP elects to redeem their LP tokens they will receive a pro rata share of the YAP’s current total liquidity.

What Are the Benefits of YAPs?

Because an LP’s share of a YAP is entirely fungible, this makes it easy to integrate YAPs into other DeFi protocols, such as lending apps (e.g., Solera) and incentive markets (e.g., Royco). This opens the door to a host of opportunities for YAP LPs, from borrowing against their liquidity position to rehypothecating their capital investment.

For new token projects, YAPs present a frictionless pathway to multi-protocol integrations. Once a token is integrated with Rooster, it can support YAPs, which means that the token can be immediately implicated in DeFi activities like lending and rehypothecation. YAPs let tokens fast-track their adoption across the Plume network and immediately extend the available utility for token holders.

What if I would rather just receive ROOSTER emissions?

Any LP who would prefer to receive straight ROOSTER emissions can choose to provide liquidity to a pool through an NFT position and collect ROOSTER emissions from the ve(3,3) flywheel. Their position in the pool will not be fungible and cannot be used in other protocols like a YAP.