The Future of Automated Yield on Amped

We’re excited to announce the launch of yALP (Yield Bearing ALP), a revolutionary advancement in how liquidity providers interact with the Amped protocol. This EIP-4626 compliant vault transforms the liquidity provision experience by introducing auto-compounding yields and unprecedented flexibility for ALP holders.

What is yALP?

yALP is a tokenized vault that wraps your ALP (Amped Liquidity Provider) tokens into a yield-bearing asset that automatically compounds rewards. Instead of manually claiming and reinvesting your trading fees and esAMP rewards, yALP does this for you, maximizing your returns through the power of compound interest.

EIP-4626: The Tokenized Vault Standard

yALP implements EIP-4626, the standardized interface for tokenized vaults. This standard, pioneered by developers including Joey Santoro (Fei Protocol) and others, creates a common framework for yield-bearing vaults across DeFi. By adhering to EIP-4626, yALP ensures:

• Composability: Seamless integration with other DeFi protocols that support the standard
• Predictable Behavior: Standardized functions like deposit(), withdraw(), totalAssets(), and conversion functions
• Developer Friendly: Any protocol or tool that works with EIP-4626 vaults automatically works with yALP
• Future Proof: As the DeFi ecosystem evolves, yALP remains compatible with new innovations

The standard defines precise mathematical relationships between shares (yALP) and assets (fsALP), ensuring fair and transparent accounting that users and protocols can rely on.

The Power of Auto-Compounding

Traditional ALP holders must regularly claim their rewards and manually reinvest them to benefit from compounding. This process is:

• Time-consuming and requires active management
• Requires multiple transactions and constant monitoring
• Easy to forget, leading to suboptimal returns
• Inefficient for users who want passive exposure

With yALP, all of this happens automatically. Your share of trading fees (distributed as WS - Wrapped Sonic) is continuously reinvested into more ALP, growing your position without any action required on your part.

Key Benefits for Liquidity Providers

1. Set and Forget Yield Generation

Once you’ve deposited into yALP, your position automatically grows. The vault’s keeper regularly harvests rewards and reinvests them, ensuring you’re always earning maximum yield. This passive approach is perfect for long-term liquidity providers who want exposure to Amped’s growth without active management.

2. Operational Efficiency

Instead of every user needing to manually claim and reinvest rewards individually, the yALP vault handles this automatically. One compound transaction benefits all vault participants simultaneously, creating a more efficient system for everyone involved.

3. Transferable Liquidity

Unlike fsALP (staked ALP) which is non-transferable and locked to your wallet, yALP tokens are fully transferable ERC-20 tokens. This opens up exciting new possibilities:

• Trade on DEXs: yALP can be traded on Sonic DEXs, providing instant liquidity
• Use as Collateral: Potential integration with lending protocols
• Transfer Between Wallets: Move your position without unstaking
• Gift or Distribute: Easy distribution for DAOs or investment funds

4. Fair Share Distribution

The vault uses a sophisticated share calculation mechanism that prevents dilution attacks and ensures every depositor receives their fair share of the vault’s growth. Early depositors are protected, and new depositors can’t game the system.

Technical Implementation

yALP leverages sophisticated mechanisms to ensure security, fairness, and efficiency:

Core Architecture

• Deposit with S: Simple one-transaction deposits using Sonic’s native token via depositS()
• Automatic Reward Reinvestment: Keeper-managed compounding of WS (Wrapped Sonic) rewards
• Exchange Rate Mechanism: The vault maintains a precise exchange rate between yALP and fsALP, calculated as:1 yALP = (Total fsALP in Vault) / (Total yALP Supply)This rate only increases as rewards are compounded, never decreases

Security Features

• Dilution Protection: The vault calculates shares based on the state before deposits, preventing sandwich attacks and ensuring fair share distribution
• Reentrancy Guards: All state-changing functions are protected against reentrancy attacks
• Non-Custodial Design: Users can always redeem their yALP for the underlying fsALP
• Cooldown Management: Respects the underlying 15-minute GlpManager cooldown, tracked via lastDeposit timestamp

Smart Contract Details

The yALP vault integrates with Amped’s core infrastructure:

• RewardRouter: Handles minting and staking of ALP tokens
• GlpManager: Manages liquidity operations and cooldowns
• fsALP: The underlying fee + staked ALP tokens that back yALP

Key functions exposed to users:

// Deposit S and receive yALP
function depositS(uint256 minUsdg, uint256 minGlp) external payable returns (uint256 shares)

// Burn yALP and receive S
function withdrawS(uint256 shares, uint256 minOut, address receiver) external returns (uint256 amountOut)

Compound Mechanism

The keeper-controlled compound() function:

1. Claims accumulated WS rewards from trading fees
2. Unwraps WS to native S tokens
3. Deposits S back into the protocol for more fsALP
4. Updates the exchange rate, benefiting all yALP holders proportionally

This process is transparent and emits events that can be monitored on-chain.

Getting Started

Interacting with yALP is straightforward:

1. Deposit: Send S (Sonic) to the vault using depositS()
2. Hold: Watch your yALP appreciate as rewards are compounded
3. Trade (optional): Trade yALP on Sonic DEXs for instant liquidity
4. Withdraw: Burn yALP to receive S after the cooldown period

Contract Address: 0xFa9A3A721BA614C589Dcd6062578123f998d3A34 View on Explorer: SonicScan

The Future of Liquidity Provision

yALP represents a paradigm shift in how users can interact with Amped’s liquidity layer. By combining:

• Automated yield optimization
• Full token transferability
• DEX tradability
• Transparent operations

We’re creating a more accessible, efficient, and flexible way to provide liquidity to the Amped protocol.

Security and Audits

The yALP vault has been built with security as the top priority:

• Comprehensive testing on Sonic mainnet
• Open source and verified contract code
• Built on Amped’s proven infrastructure

The contract has been completely audited and the subsequent report will be available shortly.

Join the yALP Revolution

Whether you’re a passive investor seeking automated yields, an active trader looking for arbitrage opportunities, or a protocol seeking composable liquidity solutions, yALP offers something for everyone.

The future of DeFi is automated, composable, and efficient. With yALP, that future is here today on Sonic.

Start earning automated yields with yALP today. Visit the Amped Finance app to begin your journey.

For technical documentation, visit our docs.

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