The problem Yisk Finance solves

Staking on Lisk forced users to lock their $LSK for a minimum of 2 weeks granting them the minimum yield rate, while to earn the maximum yield, users need to stake their $LSK for 2 years which in crypto is equivalent to 20 years.

The level of the attractiveness of Lisk Staking can be increased if there's a way for users to get the maximum yield rate while allowing users to exit their staking position anytime they want regardless of the staking period.

We utilize LSD to solve this problem. Users staking $LSK through Yisk Finance will get $yLSK on a 1:1 ratio, then users $LSK will be locked indefinitely. Users will yield the max rate while retaining the freedom to sell their $yLSK for $LSK in the open market.

We also build a CDP-based stablecoin, enabling users to mint $yiskUSD by providing $yLSK as collateral. Every $1 worth of $yiskUSD will be backed by $1.5 worth of $yLSK. $yiskUSD is a yield-bearing stablecoin, meaning users will start accruing yield simply by holding $yiskUSD on their wallet.

Challenges we ran into

Creating an equal LSK staking condition

we encountered a challenge in creating an equal staking condition for all LSK stakers using Yisk Finance. To address this, we implemented a maximum staking duration of 2 years. This approach aims to bring stable liquidity to Lisk and offer the highest possible yield for stakers.

Mantaining LSK-yLSK price peg

Since users staking LSK receive yLSK in return, we need to maintain the peg between LSK and yLSK. According to our logic, we require twice the amount of LSK staked. This means that for every 1 yLSK, there will be 1 LSK in the Lisk staking protocol and an additional 1 LSK in the open market, ensuring that users can freely exit their staking positions.

Creating Liquidation Bot

To avoid bad debt within the Yisk Finance protocol, we need to safeguard all users' borrowing positions. We achieve this by creating a liquidation bot that is automatically triggered whenever a position's collateral ratio falls below the safe threshold of 160%. Since MEV is not common on Lisk, we are exploring uncharted territory in this ecosystem.