In this post, I’ll be providing a step-by-step guide on how to earn rewards using Yearn’s CrvLUSD Vault.
You might have some questions already, so I’ll start with the basics:
What is Liquity?
Most of you know this by now if you’ve been following my content, but it’s a decentralized borrowing protocol that allows you to draw interest-free loans against Ether used as collateral. Loans are paid out in LUSD (a USD pegged stablecoin) and need to maintain a minimum collateral ratio of 110%.
What is Yearn Finance?
“Yearn Finance is a suite of products in Decentralized Finance (DeFi) that provides lending aggregation, yield generation, and insurance on the Ethereum blockchain. The protocol is maintained by various independent developers and is governed by YFI holders.”
Yearn has some pretty sweet features, but we’re specifically going to be using one of their Vaults (CrvLUSD). Vaults automate yield farming and find the best yield earning opportunities on the market. You can read more about them here.
What is the strategy for this vault?
The underlying strategy for the CrvLUSD Vault deposits to the LUSD+3Pool on Curve. Earned LQTY, CRV, and trading fees are then recycled into more CrvLUSD.
Although I’m sure most of you prefer the benefits you get from using Yearn (such as automation, “zaps” (I’ll explain later), and simplicity) — I still recommend reading the previous tutorial I wrote on how to deposit into Curve’s LUSD+3Pool before continuing, as it goes more in-depth about how the rewards are accrued.
Now, let’s get this farm started.
Navigating through Yearn’s homepage
Finding the list of Vaults is straightforward. Click “Go to Vaults” and you’ll be in the right place.
Finding the CrvLUSD Vault
Scroll down a bit once you’re here. The CrvLUSD vault will be displayed as it is in the image below:
Now that you have found the crvLUSD vault, I’ll explain the stats:
- Version : This represents the version of Yearn that the vault was deployed on. At the time of writing, there’s only V1 & V2.
- Deposited : This represents the value of your deposit. At this point, it should still be 0.
- Growth : This represents the net APY.
- Total Assets : This represents how much assets (in USD) are in the vault. Think of it as TVL, or total value locked in each vault.
- Available to Deposit : This represents how much you own of the asset needed to deposit. Although it may show 0, there’s a solution for this that I’ll cover in the next step.
Depositing into the CrvLUSD Vault
Click on the CrvLUSD vault and the panel will transform into this:
As I mentioned previously, there is a way to deposit into the vault even if you do not have the underlying vault asset needed (CrvLUSD). This method is referred to as a “zap”. It will swap your assets for you while depositing all in one transaction.
If you click on the first drop-down box, it will automatically show which assets in your wallet that you can use to deposit or zap into the vault.
Since I’ve already acquired CrvLUSD LP tokens from my last tutorial, that’s what I’ll be depositing.
Once you’re finished with depositing into the vault, the panel will look like this:
Your job is done from here! All you have to do is let your rewards build up and withdraw when ready. Yearn vaults are amazing, right?
It’s that simple. Deposit, benefit from yield automation, and withdraw.
And remember, Yearn compounds all of your CRV and LQTY rewards for you. If you’re hoping to hold on to these newly earned tokens, then you’ll have to participate in the Curve pool manually.
You can withdraw your assets in any of the 6 shown above.
Keep in mind there’s no lock-up period, so you can do this at any time.