The APY token is the APY.Finance governance token. As platform's features are built out, the token will be used to govern them.
APY token contract address: 0x95a4492F028aa1fd432Ea71146b433E7B4446611
APY token will be developed in three stages. Each stage releases new token features that grant greater control over the entire APY.Finance system.
APY token holders can vote to change system parameters such as fees, risk score, and rebalance thresholds.
Fees: The percentage of yield generated that will go to APY token holders for maintaining the protocol. This is initially set to 0.
Risk Score: Every strategy will have an associated risk score. APY token holders decentralize risk assessment by proposing and pushing risk score updates as the landscape changes.
Rebalance Thresholds: Determines how aggressive or conservative the strategies should be when rebalancing for higher yield.
APY token holders can vote to change strategy specific parameters such as locking periods, collateralization ratios, and account segmentation.
Locking periods: Some strategies may require locking of assets to boost yield. And example of this is Curve vote-locking.
Collateralization ratios: Any time leverage is used, a safe buffer of over-collateralization must be maintained to avoid liquidation. This can be more aggressive for higher yield, or more conservative for less risk.
Account segmentation: A strategy can interact with a protocol using any number of accounts. This allows for techniques such as the staging of different locking periods.
APY token holders can vote to propose new strategies for the strategy portfolio.
These proposal mechanics must be carefully designed to prevent conflicts of interest that arise from a strategy's influence over large amounts of capital.