Yieldfunding
Last updated
Last updated
The vision for Builda is to become the onchain yieldfunding protocol.
Yieldfunding is a mechanism where a user’s staked capital (e.g. tokens) generates yield or interest via DeFi protocols (such as Morpho vaults). Instead of the principal itself going to the project, only the generated yield is directed to the project. This reduces risk for contributors because their capital remains intact and can be withdrawn at any time. Unlike traditional VC or direct crowdfunding where capital is fully committed to the project, and potentially lost, Builda’s yieldfunding allows contributors to support projects without jeopardizing their initial funds.
"No-Loss" Contribution: only yield is being used to help fund projects, which means that any deposited assets will always be available for withdraw when desired.
Alignment: it aligns the incentives of builders and supporters, committing their capital over a specified time-frame and building a loyal community.
Risk/Reward: with yieldfunding, the risk to reward ratio compared to traditional investing is magnitudes lower. Because there is no direct investment, those with a lower risk appetite have a greater opportunity to participate.
Community-first instead of VC first: Builders can raise capital for their early needs without selling huge stakes early to VCs or launching a token prematurely.
Supplemental: yieldfunding is supplemental to any project. This means that, by utilizing Builda's yieldfunding, they still can explore other funding avenues such as through a VC if they so choose. They aren't obligated to only use Builda as their sole source of funding.
Note: participants can withdraw their staked tokens from active yieldfunding campaigns at any time.
Currently, the yield comes from Morpho Vaults & Moonwell lending & borrowing platform. Builda Protocol's goal is to have a fully permissionless framework to support any future yield strategies the community wants to enable.
Currently, projects are sourced by Builda Protocol contributors and the general community.
Eventually, projects can be sourced entirely through the community in a way that allows crowdfunding to operate in a completely trustless way, perhaps with the approval of decentralized governance or some other form of community-run governing body.
Builda Protocol rewards users with Builda Bucks for participating in yieldfunding which are a fun way to track your participation across the protocol. In addition to Builda Bucks, projects that are running yieldfunding campaigns will also reward users with their own reward points through the protocol.
Points earned from yieldfunded projects will be used for rewarding users with token allocation, NFTs, game assets, whitelist access, and more.
