VyFinance DEx and Bar

[GENERAL] Summarize your solution to the problem.

Build a second layer solution to our DApp that allows users to access yield generated from the swapping of tokens on the DEX. Users stake their token and are distributed fees accrued from the DEX.

[GENERAL] Summarize your relevant experience.

The team at VyFinance has a diverse and accomplished range of staff. Steven, our CEO, has been working/trading in markets for 7 years building a wealth of knowledge. Annushal Bhushan, our Haskell Engineer Lead, heads a team of 8 engineers, each highly qualified and experienced.

[IMPACT] Please describe your proposed solution.

What problem are we addressing and why?

There is a tendency for DeFi ecosystems, particularly Decentralized Exchanges (DEX), to distribute income by continually minting more of their token, resulting in a runaway deflationary effect on their value. This can sometimes be a slow process, and results in an unsustainable downwards pressure on a tokens value. This issue is a function of deflationary systems, and their long term tendency to decline in value. We believe it is important to design a sustainable DEX, thereby allowing long-term usage of this tool without consistent deflation to those holding the principal token of the platform. 

How will we address this problem?

At VyFinance, we are designing our DEX with 3 principal mechanisms to solve this design flaw:

• We are constructing a distributive mechanism (The Bar), for holders of our token (VYFI). This will create a second layer of utility, providing a purpose to holding our token outside  of just minting for providing liquidity. 

• The BAR redistributes a percentage of every swap that takes place on our DEx to users. This is done by converting the fees to VYFI (through the purchase of our token) and then serving those tokens to users that have staked at the BAR. We also distribute the income generated from all aspects of our ecosystem. You can see our entire ecosystem here: Link to Whitepaper.

• This ultimately results in income generated not solely through a minting process, but the provision of a service (eg. Swaps). This acts as a counterweight to the pressure created from Yield-Farming. 

Our token has a maximum supply of 450 million, to be farmed out over the course of 20+ years. This is designed specifically so that there is the opportunity for the buy pressure created through the BAR to overtake the downwards sale pressure from our Yield-Farm. In this circumstance, VYFI becomes an inflationary token, not deflationary as other

Our token has a maximum supply of 450 million, to be farmed out over the course of 20+ years. This is designed specifically so that there is the opportunity for the buy pressure created through the BAR to overtake the downwards sale pressure from our Yield-Farm. In this circumstance, VYFI becomes an inflationary token, not deflationary as other DEx’s.  

How did this solution come about? 

We have many years of combined trading experience at VyFinance, and have been managing funds privately before the beginning of this project. After interacting with multiple platforms across many blockchains, we observed the issues as described above, and decided to implement our own design to overcome these flaws as we perceived them. 

What do we hope to achieve through our project?

So far VyFinance has achieved some incredible milestones and built a number of Cardano firsts. Our platform was the first on Cardano (to our knowledge) to implement NFT staking, Multi currency rewards for staking and On-Chain Governance. We were also fortunate enough to win the first annual CNFT award for “Best Long Term Utility'' in regards to our Purple NFT.

Our product will benefit the wider Cardano community by providing a service that addresses issues we have identified in the current prevailing DEx models. Our second layer solution, will provide the Cardano community with a DEx which does not solely create profit derived from the minting of more tokens but, through provisions of real-world services. 

We plan to be on the forefront of the Cardano ecosystem as one of the primary DExes in this space. We believe that our position from building and being a presence during the infancy of Cardano will give us a distinct time advantage over competitors. We believe our unique design gives us a competitive advantage over inflationary DExes’. 

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

The creation of a DEx that allows users the opportunity to earn a token that isn’t simply created for selling, will drive the use of DeFi across the entire Cardano ecosystem. Innovation on-chain is key to the adoption of that blockchain. Our solution for the issue of deflation to the current DEx modal is an original implementation, designed to drive adoption of DeFi across Cardano.

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

As with any business in this sector, we have a few risks that we have to face. These can be divided into two main forms; Business, and Technological.

Business Risks include: 

• Regulatory Risk. Proposed Solution: We have to always work actively to keep up with the current regulatory environment, and adapt solutions as regulation is adopted. An example of this was our ICO, for which we adopted a KYC mechanism. This was to ensure we meet regulatory standards across multiple jurisdictions. We work with advisors to ensure that as new regulation is enacted, we are able to meet the requirements as they arise. 

• Cashflow. Proposed Solution: We have cash reserves, and a Cardano reserve. But as for any start-up, this is always something that needs to be managed appropriately. We have taken steps during the bear market to protect ourselves, including reducing wages, costs, and marketing. We have renegotiated with our development team and have confirmed our current engineering staff for the next 3 years. This gives us the skills required to continue construction on the project. 

• Competition. Proposed Solution: We won’t be the only DEx on Cardano. We believe that whilst our design is unique and economically more capable, it is important to ensure that the user base is aware of this fact. We are implementing a learning management system to onboard new users to the DeFi space. As well as undertake multiple marketing campaigns to build our community. 

Technological Risks include:

• Cardano extending protocol release dates. Proposed Solution: This is part of the reality of building on a new blockchain. We are one of the first projects to fully integrate smart contracts with the PAB - which means we have less custom code impacted by protocol changes than other projects. 

• Extended costs due to delays. Proposed Solution: See solutions to ‘Cash Flow’

• The Cardano toolkit is still being developed. Proposed Solution: We often need to build our own tools to be able to perform the functions we require. However, this takes time, and can be difficult to estimate. Cardano development is still in its discovery phase.  

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

Towards our goal, we have completed three major milestones:

• We have completed full integration of CIP-30 wallets and smart contracts with Cardano’s PAB
• We have completed the initial construction of our BAR 
• We have constructed a Concurrency Library (CCLib) 

We have 5 stages to complete the final product. These are as follows:

1. First iteration MVP DEx without BAR (integrated with CCLib) 
2. Complete and merge Bar with CCLib
3. Second iteration merged (DEx and BAR integration)
4. Build farms 
5. Start Audit

Each of these development cycles is further broken down into 7 subsegments:

1. Off-chain code development
2. On-chain code development
3. On-chain third-party internal audit  
4. UI development/Integration
5. Blockchain Query Servers development/integration (How we interact with data from the blockchain for the purpose of the UI) 
6. Testing/Traces 
7. Testnet 

These need to be conducted for each stage (1-5)

We provide a detailed breakdown for each of these in our budget. 

[FEASIBILITY] Please provide a detailed budget breakdown.

[FEASIBILITY] Please provide details of the people who will work on the project.

Steven Ward - Managing Director

Ryan Felt - Engineer lead (https://www.linkedin.com/in/ryan-felt-a262a912b/)

Anusheel Bhushan - Haskell Engineer lead (https://www.linkedin.com/in/anusheel/)

Franco Luque - Team 1 Tech lead

Maico Leberle - Team 2 Tech lead

Please see full team: https://vyfi.io/team/ 

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

Yes, we plan to return to Catalyst and propose our Auto-Harvester once our DEx and BAR are completed.

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

We have a clear sign of progress to share with our community for each stage. This is our Public Testnet. Once launched, we will be continually updating the testnet with features as they are constructed. This will allow us to have an open dialogue with our community whilst development is taking place, as users will be able to interact with the platform itself. 

We will also release a technical update fortnightly, to be held alongside AMA’s on both Twitter and Discord for our community to speak with us directly. Here we will share the day to day operations of the build, and how each task is tracking. 

[AUDITABILITY] What does success for this project look like?

Success for this project is a fully functional DEx with an integrated distributive mechanism (BAR). Allowing users who yield farm on our platform the capacity to share in the earnings of the services provided across our ecosystem. Our ultimate aim would be to reach a point of equilibrium, where our token is behaving in an inflationary, rather than deflationary manner - whilst being able to maintain all the liquidity required for a fully functional DEx. We are here to build a sustainable DEx. 

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

This is a entirely new proposal on Catalyst.