On Dec. 15, Genius Yield, a decentralized automated market maker and liquidity management protocol built on the Cardano (ADA) blockchain, announced the launch of its initial stake pool offering, or ISPO. The process will continue for six months until June 15, 2022. At the time of publication, more than 95.8 million ADA, worth approximately $118 million at the time of writing, have been delegated to the stake pools.
In an ISPO, blockchain enthusiasts delegate their cryptos in a protocol and receive tokens of the new project they fund as rewards, instead of receiving regular ADA staking rewards, which goes to the developers. Investors can reclaim their staked cryptos at any period. By utilizing this method, investors not only harvest yields, but keep their initial investments secure as pool operators do not possess control over delegated funds.
In this particular ISPO, users delegate their ADA from their Cardano wallet, such as Yoroi, into one of the four GENS stake pools and receive the GENS token. Funds do not leave the delegator's wallet. According to Genius Yield developers, 10 million GENS tokens out of a total supply of 100 million will be distributed to ISPO investors. In addition, they will also receive 20% of transaction fees on the platform.
The funds, in the form of ADA staking rewards going to developers, will be used in part to build a solution that enables users to benefit from advanced algorithmic trading strategies and yield optimization on the Genius Yield platform. Dr. Sothy Kol-Men, co-founder of Genius Yield, said the platform is building a "community-driven educational and mentorship" program that teaches users about decentralized finance, or DeFi.
Update: Dec. 18, 2021 at 3:20 pm UTC. An earlier version of this story provided an erroneous description of the ISPO process. We have updated details for accuracy.