About the EEFI Yield Token
What is EEFI?
Elastic Finance Index Token (EEFI), is a ERC20 yield token that is generated by the protocol's core Elastic Vault.
EEFI does not have a maximum supply: The number of EEFI in circulation will depend on the following factors:
How much Ampleforth (AMPL) is staked in the Elastic Vault: The amount of EEFI minted by the Elastic Vault and delivered to stakers depends on the amount of AMPL deposited into the vault. The more AMPL is staked, the more EEFI is minted.
AMPL’s rebase status: Less EEFI is minted by the vault when AMPL Is in negative rebase. More EEFI is minted when AMPL is in neutral rebase.
The amount of EEFI burned daily: Each day that AMPL is in positive rebase, a percentage of new AMPL supply (generated from AMPL staked) will be used to buy EEFI. The majority of purchased EEFI is burned, reducing the amount of the token in circulation.
How long it has been since AMPL reached positive rebase status: The elastic vault is configured to stop minting EEFI if AMPL has not entered positive rebase status for 30 consecutive days.
Is EEFI similar to UST?
Because the Elastic Vault mints and burns EEFI, some may assume the token has a similar design to UST, which collapsed in value. Here are the key differences:
- EEFI is not an algorithmic stablecoin: It is not designed to be stable in value, and is not meant to be redeemed or exchanged for another asset
- EEFI is backed: In some respects EEFI is 'backed' by AMPL deposited into the Elastic Vault, which is used to automatically buy and burn the token during positive AMPL rebases
- EEFI does not hyper-inflate: EEFI is only minted by the vault when AMPL is in neutral or negative rebase Learn more
- EEFI will have multiple use cases: Key parts of the Elastic Protocol Flywheel, such as EEFI bonds, sub-vaults, such as the pEEFI vault developed in partnership with Peapods Finance, and other flywheel components, deliver additional utilities to the asset