Zap Vaults Launch by PolyZap Finance

Published on: 18.06.2021

PolyZap Finance announced Zap Vaults with $PZAP burning launch.

As more seasoned DeFi investors perhaps know, there is a weakness with nearly all Yield Farm projects, which is sell pressure. On a Yield Farm investors stake tokens in farms and pools that give daily rewards, which are then sold by many investors to regularly take profits. If the number of investors selling outweighs the number of new investors or liquidity added, the farm equation does not balance. This can result in a projects native token to constantly lose value.

How to combat constant sell pressure is a real challenge for any project, and there are various approaches to solve the problem. Ideally giving your projects native token — PZAP in this case — more utility is a good solution. The goal being that investors have more reason to hold their tokens longer-term, rather than selling them daily. This will then in turn help token price stability and promote continued project growth.

On PolyZap the incentives for holders are currently:

PZAP token holders get no deposit fees on PZAP farms and pools, reduced Harvest Locks, and receive the highest farm interest allocation.
Zap Pools — earn more PZAP by staking your tokens in the PZAP pool.
Zapper Hub — stake PZAP to earn other tokens, like MATIC or USDC.

Additional planned incentives (more details soon!):

Initial Farm Offerings (IFO) — vetted partner project offerings, where you can stake PZAP / LP to buy new project tokens, often at a discounted cost.
PZAP the PolyZap token will eventually be the governance token of the PolyZap protocol, and in the future holders will get a profit share of DEX fees.

The new Zap Vaults — are another strategy that we can utilize to combat sell pressure and promote PZAP price stability and growth. They are also a great benefit for PZAP holders, as the vaults continuously burn PZAP, which helps fight inflation.

Zap Vaults or Auto-compounding Vaults

A token vault is similar to a farm pool, where to stake tokens you first create a Liquidity Pair (LP), by adding liquidity at a DEX. Depending on the type of LP supported by the vault, you will have to add liquidity at a different DEX, which could be PolyZap, QuickSwap or SushiSwap for example.

Once you’ve added liquidity at the DEX, and have the correct LPs in your wallet, then your ready to stake your LPs in the supported LP token vault of your choice.

To summarize — LP token vaults (Zap Vaults) are essentially ‘smart’ vaults that efficiently execute yield farming strategies, and compound rewards back into the initially deposited token types. The best part being… that it all happens automatically, and continuously!

For investors, the vaults simplify staking and compounding, as after adding their chosen LP assets, the vaults code takes cares of the rest. Also removing the hassle and costs associated with doing multiple manual transactions (TX) daily, if for example you want to compound a traditional (non-compounding) farm LP pool.

Zap Vaults added at launch:

ETH-MATIC
USDC-USDT
MATIC-USDC
ETH-USDC
MATIC-QUICK
USDC-DAI
DAI-USDT
WBTC-USDC
USDC-QUICK

Additional points to note about the Zap Vaults:

On PolyZap there are no vault deposit or withdrawal fees for investors!
A 4.5% performance fee from the rewards is used to buyback and burn PZAP continuously.
The vaults are auto-compounded every 5 minutes, which means there is a constant buy pressure, which will help to stabilize the PZAP price.
Annual percentage yield (APY) — takes the frequent compounding into consideration as a yearly compounded calculation.
Daily interest percentages(Daily) — show the interest rate calculated in real-time.
The total amount invested (TVL) — shows the value of all investors funds that are currently staked within the vault.
Code for the vaults was forked from the PolyCat vaults code, then modified and improved for PolyZap. So thanks to them, the code has been audited once already, by Obelisk.
Another code audit is also planned for the modified PolyZap vaults code, to give investors additional confidence and security, more details coming soon!

Burning Zap Vaults!

Now, you may be thinking — what could possibly be better than a regular Zap Vault? Well I’ll tell you — it’s a Burning Zap Vault, which has a sole purpose in life of burning PZAP!

I know, it’s hard to believe, but it’s true…. we are also launching Burning Vaults that take 100% of the profits to buyback PZAP, which is then sent to the burn address. Poof… up in smoke, gone and never coming back!

Burning Zap Vaults added at launch:

ETH-MATIC
USDC-USDT

These dedicated burning vaults will be used mainly by the PolyZap team to stake a % of the fees gathered from the DEX and Yield Farm. The benefit here is that we are able to constantly compound the staked LP, buyback PZAP with the profits and burn it. As TVL in the vaults increases, so does the buy pressure. This should over time help to combat the daily sell-off’s for the PZAP token.

Additionally — if investors want to help PolyZap grow faster they can also stake some LP in the 100% Burning Zap Vaults. You won’t make any profits as such compared to the normal vaults, however you will be doing a great service to PolyZap, and PZAP! We are also considering an additional reward scheme for investors that decide to support the platforms growth in this manner.