🔺NodeFi (Yield Pass)

NodeFi utilizes:

1. Yield Capture layer via Yield Pass

2. Liquidity layer via the ATM

3. Additional external liquidity layer via AMMs for LPing

NodeFi is a new primitive combining the two infrastructure layers that MetaStreet has built. Nodes can be Proof of Work (like Bitcoin), Proof of Stake (like ETH), or Proof of Compute (like DePIN).

1. In the Yield Capture layer, a Node is deposited and then split via Yield Pass into a Yield Token (YP) and a Principal Token (NP or Node Pass). This allows the owner to manage their yield risk (or speculate) by retaining claims on their token emissions or selling their future claims.

2. In the Liquidity layer, the owner uses their NP to borrow the underlying emission token and reinvest it at a higher rate (Positive Carry Trade). For example, if a user can borrow at a 5% APR, but reinvest those tokens for the duration at 10% APR, they are generating 5% additional yield they previously did not have access to.

3. The final piece is the LP layer, which exists via AMMs. NodeFi's standard process is to provide liquidity to this layer for two main purposes: making Node emission rates a liquid market for retail, risk management, speculation or generating additional yield from swap fees.

FAQs

Are all Yield Pass products the same?

No, you can expect some slight differences, although the NodeFi features and benefits are largely the same. For example, Aethir nodes require a node to be delegated to an integrated operator to ensure it is producing emissions, while Xai nodes require staking in a top-tier pool to ensure the same level of quality for all depositors.

How are emissions distributed to Yield Pass holders?

All emissions from the respective nodes deposited on Yield Pass are combined into a single aggregated pool. Each participant receives emissions proportional to their share of the total pool, ensuring consistent and fair rewards. This structure allows for smoother distribution and maximizes efficiency. After the pool’s expiration date (typically 90 days from pool launch) and subsequent vesting period, you will be able to redeem your $YP token for the respective protocol's emission token.

Can I track the status of my Nodes deposited on Yield Pass and emissions accrued and claimable with the Yield Pass token? What about my Node Crystals?

Yes. NodeFi is designed to be simple and intuitive. On the specific protocol's Yield Pass page, you will be able to track your deposits, borrows, and emissions after connecting your wallet. Starting in February 2025, you will also be able to directly track your Node Crystals (MetaStreet Rewards) on MetaStreet’s native app as well.

Is there a limit to the number of nodes I can stake?

Yes, you can stake up to 128 nodes per transaction. This limit is set to protect against errors that could occur during blockchain transactions, such as node loss or operational issues. If you hold more than 128 nodes, you can easily split your deposits across multiple transactions to stake them all effectively.

What are the risks of depositing into Yield Pass?

The biggest risk is defaulting on your node when choosing the Deposit & Earn option. This option initiates a loan using your NP as collateral and the NP represents ownership of your underlying node, so if after pool expiration, you do not withdraw your node, it will be auctioned off in order for lenders to be made whole. Always review the pool expiration, loan terms, and set reminders to manage these risks effectively.