Review of Pylon Pools as 6 month vesting comes to an end
Before I begin I want to acknowledge that this review is based on my own experiences with Pylon Protocol so others may have had another experience. The potential for Pylon pools are significant However, due to it's early days I still believe this protocol has much growing and adoption to do.
So what are Pylon Pools?
Pylon Pools are part of Pylon Protocol developed on the Terra (Luna) Network which you can read my earlier introductory post Pylon Protocol: Terra Network Launchpad with a no loss investment strategy which provides an overview of the protocol.
The Trial
Six months ago I entered two pools to trial the new loss less investment strategy offered by Pylon Protocol which enables used to lock in UST for 6, 12 or 18 month periods in return for an APY.
I trialled both the TWD and VKR pools but only for a 6 month period which locked my UST into a vault and paid me what started off as a pretty decent APY.
I found the process quite simple and wasn't much of a requirement on my end other than to set the amount of UST I wanted in the pool I wanted and then press submit.
The setup and payment options are decent as well with the first APY payments available after the first 3 months from deposit however, by that stage what was once a high paying APY had begun dwindling to low amounts.
Disaster hits
Unfortunately disaster hit the moment the claim button became active with many unable to claim their allocated tokens (TWD) which was the cause of incorrect timing of the contract.
A number of other issues arose with a range of Transaction Errors when claiming airdrops.
In what was developed as a way for projects to launch their tokens it quickly spiralled to mass dumping of APY earned tokens resulting in near collapses of projects. This in turn reduced the amount of APY on Pylon pools to the point the value was not worth the lock period.
For example, Anchor protocol earns 19.45% APY where at current Valkyrie Pylon pool earns just over 4% APY even its longest period lock only nets you 15% APY.
Better ROI
Pylon Protocol has been a failure in regards to protocol launches and investor returns simply putting money in Luna 6 months ago and staking would have provided you with a far superior ROI.
Of course there is no way of knowing 6 months ago that Luna would have done so well and the benefit of utilising Pylon Pools is that you are able to take a risk in alternative tokens without losing money because at the end of the vesting period your UST is returned.
So in this regard Pylon Protocol is superior and can be used to force people into taking less risker moves when investing. Noting that this has only been a snapshot of 6 months and there is still opportunity for the tokens earned to progress and become of value.
We are already seeing a price increase in TWD tokens as the pylon pools come to a close and the APY lifting a little which is better than Anchor UST APY.
Pylon Protocol had a number of hiccups which is expected for any new project launching and coming of age but overall it has provided an alternative safety blanket for many would be investors in the decentralised finance (De-Fi) world.
Not withstanding the fact that people could have bought into each project on their own accord but then would have worn the full brunt of the risk.
Future plans for Pylon and what is currently available is the ability to pay for subscriptions to services should they take our a Pylon Pool which is a wonderful initiative.
Pylon pool auto deposits funds into Anchor for the UST yield and pays the owner of the pool the APY of the pool so as the example given by Pylon. If for example Netflix came to Pylon you could deposit enough UST into the pool that your APY covers the monthly subscription fee.
What this will provide is a way to have your savings working for you to provide luxuries that you may not previously of had. Utilisation in this way in my opinion is a strong point and should mainstreamisation occur this will be a protocol that does really well.
I can't help but think how it may apply to purchasing a vehicle where you could deposit UST into a Car sales office Pylon Pool the APY pays for the car and at the end of the term you get your UST back almost getting a car for free.
I use the word "Almost" because it is not free as you are using funds you would have earned to cover the costs.
Now that is a new age product from an emerging technology.
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