In today’s edition, we’re keeping you updated on everything Clip Finance is building. The project had a huge announcement recently together with Chainlink, as they joined Chainlink’s BUILD incubator program. There are also hints that they've been invited to an additional accelerator program of one of the biggest crypto media companies.
So, what is Clip Finance, exactly? The project provides automated single-click yield vaults, available on all the most popular blockchains for DeFi including Ethereum mainnet, Arbitrum, BNB Chain, and more. These vaults utilize multiple different strategies to earn a yield on a given asset, diversifying risk, and maximizing returns. The team has a lot planned, with their initial product currently in private beta. In addition, they’ve implemented a unique NFT bootstrapping program which is now live and in the early community minting phase.
Keep reading to learn what you can expect from Clip Finance.
The Vision
Clip Finance is an all-encompassing platform for DeFi yield products as well as trading tools. The end goal is to provide users with accessible vaults that allow them to create a diversified yield portfolio with a single click. Specifically, these vaults are multi-strategy. This contrasts with many projects that include single-strategy vaults, i.e. vaults that stay fixed on one source of yield. These sorts of vaults can be great sources of yield for many. But the reality is that yields change, and incentives shift. APRs can decrease quickly, whether it’s because more mercenary capital has moved into the underlying strategy, or perhaps the project the vault is based upon decided to allocate fewer incentives. Whatever the reason, using a yield vault that is reliant on one strategy is flawed. The reason for this is that users have to spend more time manually diversifying their deposits across different pools. Alternatively, they can just deposit into one pool and have all of their eggs in one basket, or pool, so to speak. This could be vaults that stake $ETH via Lido, or stablecoin vaults that deploy user deposits into the Curve 3pool.
Clip Finance’s MVP is slated to be a stablecoin vault on BNB chain, with expansion to Arbitrum slated to follow soon after. While developing their initial product, the team ended up building out infrastructure that expands potential possibilities for the project.
The engine of the protocol is the custom-built Strategy Router and the whole architecture is designed with a cross-chain future in mind. Joining the Chainlink BUILD program, Clip will be one of the first protocols to build on top of Chainlink's new cross-chain messaging product CCIP, which means that cross-chain yield farming is no longer in the distant future. What it means is that you can soon deposit on (for example) Ethereum mainnet, but the funds could be earning yield from farms on Arbitrum, zkSync, BNB Chain, Polygon, and Optimism without you having to bridge manually and pay transaction costs.
The Strategy Router contains a preset list of strategies across different chains that are whitelisted based on the results of the risk analysis. This approach is preferable to using a single-strategy vault, as spreading out deposits can help ensure that APR dilution for a given pool is minimized. This is especially important for users with size.
Splitting funds isn’t all the Clip does. The protocol will manage risk appropriately, and change the weighting of how deposits are allocated into strategies based on performance and risk associated with a strategy.
In addition to stablecoins, Clip’s whitepaper reveals that Clip is planning to launch LSD-optimization product, upfront fixed-rate yield product, and a debit card to name a few upcoming plans.
The Product
Now, we’ve explained the vision and vast potential Clip Finance has with its on-chain Strategy Router. But how can you actually use the project? As stated above, Clip Finance will soon be launching an optimized yield vault for stablecoins on BNB chain. This is currently available in private beta, and via connecting with the team, you can get access to try it out yourself.
Users will be able to deposit the stablecoin of their choice into the vault. The deposited capital will then be divided up into multiple stablecoin strategies, mitigating risk and dependence on any one protocol.
Yield Wars
As with any product, some sort of marketing effort is often needed to make people aware it exists. Clip Finance has put a unique twist on marketing its stablecoin yield vault. They’ve introduced a unique gamified NFT experience, where minting an NFT places you in one of 10 “Legions”. You will then compete with other Legions for yield, in the native CLIP token. These “Yield Wars” are a unique way of both bootstrapping funds for the protocol a well as attracting new users. But minters don’t necessarily even need to participate in Yield Wars to earn rewards. Wallets will be rewarded with a $CLIP airdrop just for minting, and NFTs can be staked for additional rewards. 10% of the total $CLIP supply is allocated for the airdrop and 5% for the NFT staking yield.
NFT holders compete for Mana, which can be earned in the 4 ways outlined below. These 4 Warzones give opportunities to earn an enhanced yield.
Currently, during the early community mint phase you have a limited and exclusive way to acquire an NFT below the public mint price. As an added bonus, NFT holders also have access to an exclusive group of DeFi users to discuss new protocols and strategies.
Tokenomics
Clip has a unique KPI-based approach to tokenomics. While most protocols issue tokens using time-based vesting, Clip issues tokens based on the protocol's success. Token emissions are tied to TVL milestones. The same vesting logic applies to the team, investors, and users. This means that Clip's team as well as users are incentivized to make Clip a success in order to unlock token rewards. And if the protocol isn't growing, then existing token holders are not getting diluted. The first milestones have the biggest rewards and long-term depositors are rewarded with multipliers. Hence, if you like to be early with new protocols, it makes sense to get involved during the project’s private beta.
The Team
Much like a business, the success of a given DeFi project is often very dependent on the team behind it. This is especially true while a project is in its early stages. Clip Finance is uniquely positioned in this regard.
Their team includes 10 professionals with experience in the industry. The founding team, comprised of Mikk, Artur, and Alex have extensive backgrounds in business. Mikk is a serial entrepreneur who's built a tokenization platform and a Fintech startup, Artur is a co-founder of Paxful, a popular P2P exchange since 2015, and Alex was a CTO of a protocol that grew to $80m in TVL. Resumes can speak for themselves, and Clip Finance has a team of experienced individuals who collectively could take the product in the proper direction.
The team has demonstrated the ability to adapt, as they are now expanding their focus beyond their initial stablecoin product to other multi-strategy vaults. It’s also worth mentioning that the team is self-funded. They’ve been working on Clip Finance for almost 1.5 years. The project has been built from the ground up, i.e. Clip Finance is not simply a fork of any popular project.
Conclusion
As mentioned above, Clip’s initial product is a stablecoin vault on BNB, which will also be available on Arbitrum shortly thereafter. Recently, Paypal announced their foray into crypto via the upcoming launch of their $PYUSD stablecoin. It’s clear that institutions both inside and outside of the industry recognize the value proposition of stables. Stablecoins are one of the areas of crypto that has found true PMF, with real utility for retail and institutions.
The stablecoin marketcap of crypto could very well increase significantly in the near future. In this event, Clip Finance stands to gain with its UX-focused approach, and ability to pick and choose the best stablecoin yields across different chains. It may be worth watching how the team navigates its launch and what they do to prioritize current crypto trends.