Yield Tokenization Smart Contracts: Inside Skyren DAO’s Revolutionary DeFi System

6 min readMar 8, 2025

In the rapidly evolving world of decentralized finance (DeFi), innovation is the key to staying ahead. Skyren DAO is leading this innovation with its groundbreaking yield tokenization system. By introducing a novel mechanism that separates token ownership from yield rights, Skyren DAO is not just participating in the DeFi revolution — it’s redefining it. In this article, we’ll dive deep into the smart contract architecture that powers this system, providing a comprehensive look at how Skyren DAO is revolutionizing DeFi yield management.

Disclaimer: The smart contract code presented in this article serves as a template for what the Skyren DAO Contributors are currently working on. These contracts are not final and will undergo rigorous testing and auditing before deployment. The actual implementation may differ from what is shown here.

Understanding Yield Tokenization in Skyren DAO

At the core of Skyren DAO’s innovation is the concept of yield tokenization. This mechanism allows users to separate token ownership from yield rights, creating a new paradigm in DeFi yield management. Let’s explore the key components of this system through their smart contract implementations.

Yield Rights NFT Contract

When users stake their SKYRN tokens, they receive an NFT representing their yield rights. This NFT is implemented using the ERC-721 standard:

pragma solidity ^0.8.0;

import "@openzeppelin/contracts/token/ERC721/ERC721.sol";
import "@openzeppelin/contracts/utils/Counters.sol";contract YieldRightsNFT is ERC721 {
    using Counters for Counters.Counter;
    Counters.Counter private _tokenIds;    struct YieldRights {
        uint256 amount;
        uint256 startTime;
        uint256 duration;
    }    mapping(uint256 => YieldRights) public tokenIdToYieldRights;    constructor() ERC721("Skyren Yield Rights", "SYR") {}    function mintYieldRights(address user, uint256 amount, uint256 duration) public returns (uint256) {
        _tokenIds.increment();
        uint256 newTokenId = _tokenIds.current();
        _mint(user, newTokenId);
        
        tokenIdToYieldRights[newTokenId] = YieldRights(amount, block.timestamp, duration);
        
        return newTokenId;
    }    function getYieldRights(uint256 tokenId) public view returns (YieldRights memory) {
        require(_exists(tokenId), "YieldRightsNFT: Token does not exist");
        return tokenIdToYieldRights[tokenId];
    }
}

This contract allows for the creation of unique NFTs representing yield rights. Each NFT contains information about the amount of yield, start time, and duration of the rights.

Advanced DeFi Yield Management with Skyren DAO

Skyren DAO’s yield tokenization model offers several advantages in DeFi yield management. Let’s explore the smart contracts that enable these advanced features.

Yield Escrow Contract

The Yield Escrow Contract is the workhorse of the system, handling the redirection of yield based on NFT ownership:

pragma solidity ^0.8.0;

import "./SKYRNToken.sol";
import "./YieldRightsNFT.sol";contract YieldEscrow {
    SKYRNToken public skyrn;
    YieldRightsNFT public yieldRightsNFT;    mapping(address => uint256) public stakedBalance;
    mapping(address => uint256) public lastYieldClaim;    uint256 public constant YIELD_RATE = 100; // 1% per day for simplicity    constructor(address _skyrnToken, address _yieldRightsNFT) {
        skyrn = SKYRNToken(_skyrnToken);
        yieldRightsNFT = YieldRightsNFT(_yieldRightsNFT);
    }    function stake(uint256 amount) public {
        require(skyrn.transferFrom(msg.sender, address(this), amount), "Transfer failed");
        stakedBalance[msg.sender] += amount;
        lastYieldClaim[msg.sender] = block.timestamp;        yieldRightsNFT.mintYieldRights(msg.sender, amount, 365 days); // 1 year duration
    }    function claimYield(uint256 tokenId) public {
        require(yieldRightsNFT.ownerOf(tokenId) == msg.sender, "Not the owner of yield rights");
        YieldRightsNFT.YieldRights memory rights = yieldRightsNFT.getYieldRights(tokenId);
        
        uint256 timePassed = block.timestamp - lastYieldClaim[msg.sender];
        uint256 yieldAmount = (rights.amount * YIELD_RATE * timePassed) / (100 * 365 days);        require(skyrn.transfer(msg.sender, yieldAmount), "Yield transfer failed");
        lastYieldClaim[msg.sender] = block.timestamp;
    }    // Additional functions for unstaking, transferring yield rights, etc.
}

This contract manages the staking of SKYRN tokens, minting of yield rights NFTs, and distribution of yield. It uses a simplified yield calculation for demonstration purposes.

Implementing NFT Yield Rights: A Deep Dive into Smart Contracts

The ability to trade yield rights as NFTs is a key innovation of Skyren DAO. Let’s examine the smart contract that enables this functionality:

pragma solidity ^0.8.0;

import "@openzeppelin/contracts/token/ERC721/IERC721.sol";
import "@openzeppelin/contracts/token/ERC20/IERC20.sol";
import "@openzeppelin/contracts/security/ReentrancyGuard.sol";contract YieldRightsMarketplace is ReentrancyGuard {
    IERC721 public yieldRightsNFT;
    IERC20 public skyrn;    struct Listing {
        address seller;
        uint256 price;
        bool active;
    }    mapping(uint256 => Listing) public listings;    event YieldRightsListed(uint256 indexed tokenId, address seller, uint256 price);
    event YieldRightsSold(uint256 indexed tokenId, address buyer, uint256 price);    constructor(address _yieldRightsNFT, address _skyrn) {
        yieldRightsNFT = IERC721(_yieldRightsNFT);
        skyrn = IERC20(_skyrn);
    }    function listYieldRights(uint256 tokenId, uint256 price) public {
        require(yieldRightsNFT.ownerOf(tokenId) == msg.sender, "Not the owner");
        require(yieldRightsNFT.getApproved(tokenId) == address(this), "Marketplace not approved");        listings[tokenId] = Listing(msg.sender, price, true);
        emit YieldRightsListed(tokenId, msg.sender, price);
    }    function buyYieldRights(uint256 tokenId) public nonReentrant {
        Listing memory listing = listings[tokenId];
        require(listing.active, "Listing not active");
        require(skyrn.transferFrom(msg.sender, listing.seller, listing.price), "Payment failed");        yieldRightsNFT.safeTransferFrom(listing.seller, msg.sender, tokenId);
        listings[tokenId].active = false;        emit YieldRightsSold(tokenId, msg.sender, listing.price);
    }    // Additional functions for cancelling listings, updating prices, etc.
}

This marketplace contract allows users to list their yield rights NFTs for sale and for others to purchase them using SKYRN tokens. It includes safety measures like reentrancy protection and proper ownership checks.

Integrating Lending and Borrowing Functionality

To further expand the utility of the Skyren DAO ecosystem, we can integrate lending and borrowing functionality. Here’s a simplified lending contract that allows users to use their yield rights as collateral:

pragma solidity ^0.8.0;

import "@openzeppelin/contracts/token/ERC721/IERC721.sol";
import "@openzeppelin/contracts/token/ERC20/IERC20.sol";
import "@openzeppelin/contracts/security/ReentrancyGuard.sol";contract YieldRightsLending is ReentrancyGuard {
    IERC721 public yieldRightsNFT;
    IERC20 public skyrn;
    YieldEscrow public yieldEscrow;    struct Loan {
        address borrower;
        uint256 amount;
        uint256 dueDate;
        bool active;
    }    mapping(uint256 => Loan) public loans;    event LoanCreated(uint256 indexed tokenId, address borrower, uint256 amount, uint256 dueDate);
    event LoanRepaid(uint256 indexed tokenId, address borrower, uint256 amount);
    event CollateralLiquidated(uint256 indexed tokenId, address borrower, uint256 amount);    constructor(address _yieldRightsNFT, address _skyrn, address _yieldEscrow) {
        yieldRightsNFT = IERC721(_yieldRightsNFT);
        skyrn = IERC20(_skyrn);
        yieldEscrow = YieldEscrow(_yieldEscrow);
    }    function createLoan(uint256 tokenId, uint256 amount, uint256 duration) public nonReentrant {
        require(yieldRightsNFT.ownerOf(tokenId) == msg.sender, "Not the owner");
        require(yieldRightsNFT.getApproved(tokenId) == address(this), "Lending contract not approved");        YieldRightsNFT.YieldRights memory rights = yieldEscrow.getYieldRights(tokenId);
        require(amount <= rights.amount / 2, "Loan amount too high"); // 50% LTV ratio        yieldRightsNFT.safeTransferFrom(msg.sender, address(this), tokenId);
        require(skyrn.transfer(msg.sender, amount), "Loan transfer failed");        uint256 dueDate = block.timestamp + duration;
        loans[tokenId] = Loan(msg.sender, amount, dueDate, true);        emit LoanCreated(tokenId, msg.sender, amount, dueDate);
    }    function repayLoan(uint256 tokenId) public nonReentrant {
        Loan storage loan = loans[tokenId];
        require(loan.active, "No active loan for this token");
        require(skyrn.transferFrom(msg.sender, address(this), loan.amount), "Repayment failed");        yieldRightsNFT.safeTransferFrom(address(this), loan.borrower, tokenId);
        loan.active = false;        emit LoanRepaid(tokenId, msg.sender, loan.amount);
    }    function liquidateCollateral(uint256 tokenId) public nonReentrant {
        Loan storage loan = loans[tokenId];
        require(loan.active && block.timestamp > loan.dueDate, "Cannot liquidate yet");        // Simplified liquidation process
        yieldRightsNFT.safeTransferFrom(address(this), msg.sender, tokenId);
        loan.active = false;        emit CollateralLiquidated(tokenId, loan.borrower, loan.amount);
    }    // Additional functions for loan management, interest calculation, etc.
}

This lending contract allows users to use their yield rights NFTs as collateral for loans. It includes functions for creating loans, repaying them, and liquidating collateral if loans are not repaid on time.

Conclusion: Revolutionizing DeFi with Smart Contracts

Skyren DAO’s yield tokenization smart contracts form the backbone of its innovative DeFi ecosystem. By leveraging advanced DeFi yield management techniques, Skyren DAO aims to maximize returns for its users while minimizing risks. The system’s key features include:

Automated yield distribution through the Yield Escrow Contract
Secure time-locked transfers of yield rights
Tradable yield rights as NFTs on a dedicated marketplace
Flexible yield management options for users
Integration with lending and borrowing functionality
Enhanced liquidity for yield positions
Transparent and immutable record-keeping on the blockchain
Gas-optimized contract implementations for cost-effective transactions

These smart contracts work together to create a comprehensive DeFi ecosystem that offers users unprecedented control over their yield-generating assets. By separating yield rights from token ownership and enabling their trade as NFTs, Skyren DAO opens up new possibilities for yield optimization and risk management in the DeFi space.

As the DeFi landscape continues to evolve, systems like Skyren DAO’s yield tokenization mechanism are likely to play a crucial role in shaping the future of decentralized finance. By providing users with more flexible and efficient ways to manage their yield-generating assets, Skyren DAO is not just participating in the DeFi revolution — it’s helping to drive it forward.

Remember, the smart contracts presented here are templates and works in progress. The Skyren DAO Contributors are committed to ensuring the highest standards of security and efficiency in the final implementation. As development progresses, these contracts will undergo extensive testing, auditing, and potential modifications to create a robust and secure DeFi ecosystem.