APWine x Idle — The Ultimate Guide to Getting Future Yield Today, APY Speculation & Earning AMM Fees
The latest Idle x APWine integration of interest-bearing tokens unleashed a suite of yield opportunities that weren’t possible before in DeFi.
APWine is the pioneering yield tokenization protocol allowing you to get yield in advance (even today!) instead of waiting 3 months, speculating on APY evolution or hedging your passive yield from APY volatility.
These and more fantastic options are now available for Idle users today.
Grab a cup of tea and make yourself comfortable ☕
First, we’ll guide you through all the cool things APWine enables for Idle users.
A comprehensive step-by-step tutorial is further in the article.
Let’s get started!
🔒 Fix APY — Hedge from volatility
Like the price of $BTC or $ETH, the Annual Percentage Yield (APY) tends to be volatile.
It’s a metric every DeFi staker, lender or yield farmer takes under consideration when deploying their precious crypto assets to any yield-generating platform.
Idle users are also exposed to APY volatility when dealing with both Junior & Senior Tranches.
🍇 APWine lets you fix yield for a certain period so that you don’t have to worry about APY volatility.
📈 APY Speculation
Price speculation is crypto’s daily bread — everyone is familiar with the concept of the asset value going up and down.
Exchanges, as we know, be it Coinbase or Uniswap, allow anyone to speculate on an asset’s price evolution.
What if you could take the same principles and be able to speculate on the evolution of an APY metric?
🍇 APWine lets you do precisely that — speculate on APY evolution of Idle’s interest-bearing tokens.
🔮 Get Future Yield in Advance (even today!)
Until now, there was no other way to get your yield than wait for it to mature over time. Users with a portfolio, big or small — everyone had to play by the same rules.
With APWine, waiting is no longer the case. These new tools let you play with yield by the new rules.
🍇 Idle Tranche holders can get their future yield in advance, even today.
🟣 Capitalize on Yield Tokenisation Trend via Liquidity Provision
Idle liquidity providers can choose to deploy assets into one or both pools;
#1 Principal Token / Underlying
#2 Principal Token / Future Yield Token
Both Principal Token & Future Yield tokens first need to be minted here by depositing Idle’s Senior Tranche code-named AA_idleCvxFRAX3CRV-f.
💡 The PT/Underlying Pool reduces impermanent loss up to 100% as the price of the PT starts at a discount and progressively converges to the price of one underlying.
🍇 You can capitalize on this trend by earning swap fees and $APW rewards via the Liquidity page.
💡 Step by Step APWine Tutorials
In this chapter, things finally get serious!
We’ll walk you through all the scenarios described above to get the most out of your Idle Senior Tranche.
Let’s discuss all the necessary details before we dig into it:
As of today, APWine has integrated the following Idle’s interest-bearing tokens (iBTs):
This corresponds to Convex — FRAX3CRV — Senior Tranche, obtained via Idle’s dashboard.
Its Underlying Token is FRAX3CRV, which you can obtain in this Curve pool.
To better understand the correlation between all these tokens, let’s separate them into layers and corresponding platforms as to where to mint them:
🔒 How to Fix Rates in a Simple Way
Head over to the Fixed Rates page to earn fixed-rate interest on your underlying assets in the shortest path.
Make sure to have your MetaMask connected to Mainnet.
Search for this box:
Before clicking on it, let’s examine essential elements;
- Name of the Underlying Token
- Full name of the Interest-bearing Token
- You’ll be able to fix interest rates until this date.
- Current Annual Percentage Rate (APR) for PT.
Alright, let’s click on it!
This pop-up tool will show up, providing you with a clear overview of what will happen if we decide to deposit 200 FRAX3CRV, known as Underlying.
First, the APWine protocol shows us the route it will take to get you the best amount of PT for your Undeyling. Bigger deposits will likely go through the route with the latest ZAP implementation. It’s all automatic!
Second, we are presented with the sweet details of the outcome of our deposit at the end of this period (Jun 08 2022). We’ll end up with 203.45 PT tokens, whereas at the end of the period, it’ll be redeemable for 203.45 FRAX3CRV.
3.45 is the actual amount we are securing to earn at the end of this period. Rate earned tells you in percentage what you’ll earn.
From here, all that’s left is to approve FRAX3CRV token spending and continue minting PT tokens in one transaction.
⚠️ The liquidity depth ultimately dictates the amount earned for an asset in APWine’s AMM. You might encounter a situation where a smaller deposit can make you more than a bigger one.
Minting PT & FYT Tokens
We have 250 AA_idleCvxFRAX3CRV-f interest-bearing tokens in our wallet, and this is the amount we’ll use to min PT & FYT tokens. The UI also displays the underlying value of FRAX3CRV, for which the value tends to be different than the iBT (i.e. it’s not 1:1).
First, you need to approve the AA_idleCvxFRAX3CRV-f token by clicking the Continue button. Once successful, the first circle will fill flip to green, allowing you to proceed with the actual deposit & minting part:
And you are all set! You have now separated your interest-bearing token into Principal & Future Yield.
You can also preview your newly minted tokens in your APWine Portfolio:
Selling Future Yield Today
This feature is the one that makes everyone excited. After minting PT & FYT earlier, your FYT tokens are still subject to the APY volatility of the iBT.
You can get your future yield at today’s rates by selling FYT back into FRAX3CRV via APWine’s native AMM.
Select FYT -> FRAX3CRV pair to preview the outcome of the trade. Here again, you will need to approve FYT spending. Note it’s the nature of smart contracts, not unique to APWine protocol.
Once the FYT approval is processed, you’re one click away from selling your future yield today.
After that, you shall see FRAX3CRV in your wallet — spend it as you wish!
…or Buy more PT with FYT
Alternatively, you could sell your FYT for PT to lock in today’s interest rates for all our 250 AA_idleCvxFRAX3CRV that we started with.
PT & FYT do not have 1:1 market values despite that we minted equal amounts earlier in the article.
Choose the FYT->PT trading pair and continue with the swap procedure. Congrats! You now hold a full position in PT that guarantees you a fixed rate unlockable at the end of the period — which in this case is on Jun 08, 2022.
You can always check the current period for a given asset on the Fixed Rates page.
⚠️ If your initial plan was to buy as many PT tokens on your deposit, we suggest using the Fixed Rates page to save on gas fees & time.
Earn Swap Fees & $APW Rewards by Providing Liquidity into APWine AMM
Regardless of the scenario you take, you’ll end up with PT (or PT+FYT) tokens in our Portfolio.
From here, you can let them mature and redeem at the end of the period for a full underlying OR put them to work in the AMM.
Head over to the Liquidity page and scroll down to the FRAX3CRV section.
There are two token pools, as discussed in the first part of the article. Let’s take a closer look:
First, let’s talk specs behind each as they are totally different.
The design of APWine’s PT/Underlying reduces impermanent loss up to 100% as the price of the PT starts at a discount and progressively converges to the price of one underlying. The weights are updated based on the yield generated to update the discount and protect liquidity providers from arbitrages.
This pool design is no different than the one you can find on Uniswap and LPs are subject to impermanent loss.
Note that those APYs are boosted by $APW rewards.
Let’s click on the Deposit Liquidity button:
In the Dual Deposit section, we are presented with two other tabs for each pool. In this scenario, we’ll provide liquidity to the PT/FRAX3CRV pool.
After inserting the desired amount of PT (or Underlying) into the input fields, the UI will inform us about the share of the pool our deposit will make. In our case, that’s 12.9%.
Note we’ll have to approve the spending of each token to a new smart contract responsible for handling AMM deposits.
Ready to Add Liquidity? Let’s go!
Once deployed, you’ll have an overview of your LP position on the Liquidity page.
Essential notes for LPs:
- There is no need to stake your LP tokens to earn $APW rewards & accumulate fees. Our new mechanism does that for you.
- You can redeem your liquidity for PT/FYT anytime
- Pending rewards are migrated over to the Available Rewards section every seven days. The ‘Claim APW’ button gets you all the available $APW rewards right into your wallet.
- Currently, LPs need to withdraw and redeploy assets into the pool at the end of each period if they wish to continue liquidity provision.
About Idle Finance
Idle DAO is a decentralized organization that builds financial infrastructure for Web3. From brand new DeFi protocols to public companies, businesses of every size use our protocol to optimize capital efficiency and manage their treasuries with DeFi.
We believe that everyone deserves the best for their idle funds, both in terms of returns and risks. Over the past three years, Idle has rolled out the features and services, defining and shaping the yield automation space.
APWine pioneers the evolution of yield farming, allowing users to tokenize unrealized yield. Speculate on the yield generated by DeFi protocols. Hedge risk on your passive revenue by converting it into futures. Capitalize on this growing trend by providing liquidity without worrying about impermanent loss.