APWine is a yield tokenisation protocol enabling fixed APY rates, speculation on yield generated by various DeFi strategies or getting yield in advance.
Co-founded in the middle of DeFi summer of 2020 by Gaspard Peduzzi, APWine pioneers of yield tokenisation with over 20 interest-bearing tokens for users to choose from as of May 2022.
Julien Bouteloup, Marc Zeller & Jiahua Xu first backed the project. In May 2021, APWine raised 5.1M USDC during the liquidity bootstrapping event.
In essence, APWine is a derivatives layer for DeFi yield that introduced two new primitives to DeFi called Principal Token (PT) & Future Yield Token (FYT). The protocol works by first splitting interest-bearing tokens (iBT) like aUSDT of Aave with PT representing your locked position and FYT representing a right to claim the underlying yield accrued over time.
How does it work?
APWine pleces Interest Bearing Tokens (iBT) for a fixed duration of time in a smart contract and issues Principal & Future Yield Tokens in return.
The smart contract directly receives the yield generated by these assets, and only the holder of the FYTs can redeem the corresponding underlying yield at the end of the period. Both Principal T& Future Yield tokens can be sold back for their Underlying token as APWine doesn't introduce any time-locking mechanism on this process.
As PTs & FYTs are regular ERC20 tokens, they can be freely traded, opening up a new market for future yield.
APWine is the first yield tokenisation allowing users to fix yield on the Underlying token like USDC in a few clicks without the manual overhead of splitting interest-bearing tokens.
Currently, APWine operates in quarterly cycles, meaning users can speculate or hedge from APY volatility up to 90 days ahead. Principal Tokens are not linked to any specific period but to the Future itself, and future Yield Tokens are uniquely associated to each period of a given Future.
APWine's AMM is derived from Balancer V1's AMM design. The PT/Underlying pool has dynamic weights and PT/FYT constant 50/50 weights.
The design of APWine's AMM reduces impermanent loss up to 100% as the price of the PT starts at a discount and progressively converges to the price of one underlying. The weights are updated based on the yield generated to update the discount and protect liquidity providers from arbitrages.
This pool design is no different than the one you can find on Uniswap and LPs are subject to impermanent loss.
APWine features its SDK allowing any developer to start building atop protocol in a permissionless manner.
A continuously updated list of interest-bearing assets and their underlying platforms supported by APWine:
- sPSP-4 (Paraswap)
- PalPoolStkAave (Paladin)
- sdFRAX3CRV (StakeDAO)
- stETH (Lido)
- tfUSDC (TrueFi)
- gOHM (Olympus)
- sdam3CRV (StakeDAO)
- yvcrv3Crypto (Yearn)
- fBAL_BTC (Harvest)
- yCRV-IB (Yearn)
- mooATriCrypto3 (Beefy)
- mooJarvis4eur (Beefy)
- mooJarvis2jpy (Beefy)
- xSUSHI (Sushi)
- AA_idleCvxFRAX3CRV (Idle)
- amUSDC (USDC)
- sPSP-3 (ParaSwap)
- iFARM (Harvest)
- yvcrv-ibEUR (Yearn)
- mooMaiUSDC-miMATIC (Beefy)
- aUSDT (Aave)