Preon x Dyson Synergy
Amplifying Collateral Yield Farming Under One Roof
Welcome back Sphereans! Today, we would like to present to you a unique synergy between two protocols operating together under the Sphere Ecosystem’s umbrella, and how they work together seamlessly to optimize and amplify each other’s effects.
We previously showcased Preon’s integrations with Chronos, Balancer, and Aura, and although this topic has been touched upon briefly, the immense synergy between Preon and Dyson when it comes to collateral yield farming has yet to be fully highlighted.
So let’s explore the topic in depth to gain a better understanding of everything that is at play!
Dyson x Preon-Balancer-Aura
The Preon-Balancer-Dyson-Aura integration has been discussed in depth, where users will be able to provide liquidity into Balancer and deposit & stake those BPTs into Dyson. From there Dyson will be able to amplify and compound yield through Aura, a Balancer yield maximizer.
Dyson users will then be able to take their yield-bearing receipt tokens and deposit them as collateral in Preon in order to borrow the $STAR stablecoin, introducing the possibility of leverage and amplifying yield opportunities for users.
This of course benefits the user because their collateral is earning yield, and all else kept equal, will allow users to effortlessly borrow more $STAR over time.
Importantly, performance fees from these strategies will be split between Dyson and Preon, but more on that towards the end of this article, because there is more to the synergy between Preon and Dyson for collateral yield.
Two-Way Collateral Flow
You see, the flow of collateral can go both ways.
For example, say you have non-yield-bearing bluechip collateral such as $wETH that users deposit into Preon to borrow $STAR.
That collateralized $wETH ordinarily would sit idle. However, with Preon, no deposit is left stagnant.
A portion of deposited collateral in Preon can be routed through to Dyson to be deployed in diversified, battle-tested yield-farming strategies (which can include our very own SphereLend borrowing/lending platform once it is launched).
So even with hard assets that are not themselves yield-bearing, the synergy between Preon and Dyson allows yield-generation nonetheless with a priority on safe strategies.
So once again, as users’ collateral earns yield and grows in value, and with all else kept equal, users will be able to borrow more $STAR over time. And of course, once again performance fees are split between Dyson and Preon.
With collateral in Preon continuing to grow via yield and routing to and from Dyson, the TVL of both protocols grows in tandem with the other. This significantly and almost effortlessly amplifies the TVL of the entire Sphere ecosystem. And again, as mentioned previously, the management of all of that yield-farming collateral produces performance fees that are split between Dyson and Preon.
Governance Tokens
So then the governance token of Dyson is the $SPHERE token.
Users currently can yield-lock their $SPHERE for a period of 17 weeks to earn blue chip rewards at a variable APR, rewards that are the result of all of the yield-farming strategies and performance fee revenue of the Sphere ecosystem including the imminent Preon and Dyson integrations.
The governance token of Preon will be $vePREON, once that phase of Preon is launched.
Now because Preon is a subsidiary protocol of Sphere Finance, the Sphere treasury will have an allocation of $vePREON.
So once again, with fee revenue funneling to $vePREON, it will therefore funnel to the Sphere treasury and ultimately to $ylSPHERE holders.
This is the goal of Sphere: one token earning rewards from an entire, intricate ecosystem, all the while holding concentrated governance over that ecosystem.
Thanks for reading, Sphereans, and till next time, Sphere over and out.
