Introducing Rodeo Finance

6 min readNov 8, 2022

Rodeo is building sustainable derivatives on Arbitrum that allows users to add leverage to their investment strategies.

Our product design is focused on simple user experience, high-yet-safe yields, and trust between the users and the platform.

🥇 Why Rodeo Finance?

Rodeo Finance offers leveraged vaults, distributing under-collateralized loans to borrowers for up to ten times their collateral.
Safety is our priority. All strategies must pass strict security audits and are open-sourced for the public to check before engaging with the vault.
Rodeo Finance is an auto-compounding yield farm. Our built-in mechanisms will take your vault rewards and automatically convert them back to the vault’s base asset to be re-staked.
We are in it for the long run. DeFi is not mainstream, but it can be. Rodeo Finance will do our best to bring DeFi to the masses.
At Rodeo Finance, we encourage developers to submit their yield strategies to be implemented and are willing to reward those who do so. It just makes sense; the best way for us to provide the community with the strategies they want is to get them to show us first-hand.

🏡 Why Arbitrum?

Launching the Arbitrum network, Rodeo is equipped to flourish. We needed to ensure Rodeo Finance was based on an ecosystem whose leaders focus on product and natural growth.

Arbitrum is a growing player in the Ethereum ecosystem, and we firmly believe that both Eth and Arbitrum will be around forever. The pace of recent developments (such as Nitro), together with the buzzing Arbitrum community, reaffirms our confidence that we have made the right choice here.

📈 Initial Strategies — At Launch

Liquidity pools are essential to the function of any blockchain network. They assist in the speed, reliability, and fluidity of transactions on a decentralized exchange.

They allow users to buy and sell tokens without worrying about whether a counterparty will meet them at a reasonable price. This increased liquidity reduces a user’s investment risk and creates a smooth customer experience for dApps utilizing these swaps.

For this service, traders are willing to pay a fee; Rodeo’s yield is derived from that fee.

Vault 1: Compounding GLP

Users input their assets, USDC, and their borrowed USDC, which are then converted to GLP tokens. From there, the GLP tokens are fed into the GMX yield farm system, where users enter a pool to receive their portion of the GMX exchange fees, paid in ETH.

Rodeo is unique because it takes the rewarded ETH and converts it back to GLP to be re-staked. This mechanism allows users to earn rewards creating a compounding effect. In this strategy, users have approximately 50% exposure to the price movement of BTC and ETH.

Vault 2: Uni V3 / USDC

Rodeo Finance auto-compounds each user’s yield gained from Uniswap V3 fees, allowing users to grow their LP position size without depositing more assets. Like all other Rodeo strategies, you only need to supply USDC as collateral and optionally borrow extra USDC.

The USDC will then get swapped to the two tokens needed to add liquidity to that pool. Straight away, your tokens will be put to work, and you’ll immediately start earning trading fees. The fees you earn will automatically be converted back into the base asset of the vault and continue to earn you more yield, compounding your return. Now, because you are an LP provider, you will suffer IL (impermanent loss) for the full value of the position, be careful which pool you enter.

This is just the beginning of our UniV3 strategies; we have a lot more complex ones on the way with the potential to bring you even higher yields.

Vault 3: Sushiswap

Similar to UniV3, the Sushiswap vault allows users to supply their USDC into pools containing two different assets. The Rodeo vault will swap the inputted USDC into the two assets required to provide liquidity for the pool and then transfer the tokens to enter a position.

Once the assets have been entered, the LP tokens returned are staked into the MasterChef Sushi contract to earn further Sushi rewards. To maximize yield, the Rodeo vault will regularly harvest the Sushi reward tokens and swap them back into the underlying pool assets, which are then re-invested into the Sushiswap pool.

This results in a powerful compounding effect, giving users a significantly higher ROI over time compared to ordinarily providing pool liquidity. This process is fully automated, meaning users can enjoy higher returns with no additional effort.

By utilizing the additional leverage options offered by Rodeo vaults, users can further supercharge their investments for even greater gains.

Lending Pools

Vital to any dApp offering leverage is a lending pool. Users can stake their tokens in lending pools, intending to distribute them for other users to use as leverage.

Lenders can collect a fee for allowing others to put their tokens to work. Rodeo provides competitive lending APY because of the use of under-collateralized loans.

This means Rodeo will allow users to take out a larger loan for a smaller amount of collateral, meaning the lending pool will be utilized more and therefore be able to earn a larger volume of fees.

Although this may seem risky from a traditional perspective, this risk is mitigated since lent capital cannot leave the Rodeo Finance ecosystem, and liquidation bots are constantly ready to ensure that lent capital is not lost.

🖐🏼Who is Rodeo for?

Degens

Rodeo aims to be the one-stop shop for leveraged farming on Arbitrum. Push APYs higher by adding leverage to your farms, staking, Uni LP positions, and many other strategies (note — while increasing your risk, too).

Starting with Lending, Rodeo will build multiple approaches for gaining leverage and, ultimately, more capital efficiency so that users can let their inner degen run wild.

Passive investors

Rodeo Finance will help investors automate yield farming strategies to generate returns through all stages of the market cycle with a simple click. Add leverage, hedge your underlying assets, and reinvest rewards for auto-compounding APY.

Following this, Rodeo’s strategies will be deployed to determine how to protect and better grow your assets. Allowing our users to hedge your IL (Impermanent Loss) while earning a competitive yield.

DAOs, developers, and protocols:

Rodeo Finance will ultimately help protocols seamlessly incorporate leverage into their product. Users of other protocols will be able to take advantage of Rodeo lending markets and credit accounts to take leveraged positions on their yield strategies.

🛣️ The Road Ahead…

Interested in what Rodeo Finance has planned for the rest of 2022? Here is a sneak peek into what the community can expect.

📈Marketing

⚙️Product

Rodeo is currently in alpha. To become an alpha tester (have your address whitelisted), apply via the form on our website: https://www.rodeofinance.xyz.

Rodeo launches in alpha with three fully functioning strategies. Users can bring USDC and begin earning real yield on launch!

As we move from alpha to beta, Rodeo will roll out the following products: allowing users to vary concentrated liquidity ranges for UniV3 strategies, employing market neutral strategies, building a positions page to track positions and portfolio, more Sushi and UniV3 farms, external vault strategies, additional filters and search on farms page, insurance from Nexus, and ultimately expanding to other chains in the Ethereum ecosystem… and much more.

In an effort of not overpromising, some things have been omitted from the above roadmaps. Stay tuned on Twitter / Telegram to ensure you don’t miss out as we announce new products, features and partnerships.

🤝 Partners

Rodeo aims to be a cornerstone defi project on Arb, and work closely with other builders.

Are you building on Arbitrum and interested in discussing a partnership? Shoot us an email or reach out in Discord.

🪙 Token

Rodeo does not currently have a token.

🤠 Team

Our core contributors came together from a combined background in data science, FX markets, UI/UX design, and full-stack blockchain engineering. The core founding team have worked together on different projects since 2017.

📧 We are currently hiring for community, operations, and technical roles. If you’d like to work or connect with us, please drop a note at team@rodeofinance.xyz or reach out on Twitter

🌿 Community

We are building a strong community of intelligent degens and farmers from all walks of crypto. Check us out and follow along here. 👇