APY.Finance
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APY.Finance

Adding New Farms & Increasing Yield — APY.Finance

One of APY.Finance’s goals for 2022 is to increase yield returns and diversification by adding new farms. In order to stay on the cutting edge of new, and innovative farms, APY.Finance has onboarded a DeFi Researcher who specializes in researching and vetting farms that may be added to APY.Finance.

In this article, we aim to share insight into the types of farms that are being evaluated, the current process for vetting if farms may be a fit for integration, and how the APY.Finance can participate in this process, aiding the DeFi Researcher in finding and evaluating new farms to integrate.

Users can suggest new farms to evaluate for integration by using this form.

Why Add New Farms?

APY.Finance is a yield farming aggregator that batches user deposits and distributes aggregated deposits into different farms simultaneously. This results in near-instant portfolio diversification, greatly reducing financial risk in the case that any single farm is exploited.

The current strategy portfolio has 11 integrated farms, and more on the way. Along with an increase in diversification, adding new farms will create opportunities to add higher-yield, potentially riskier, farms over time. This grants the benefits of being exposed to higher yield, while still hedging against potential shortfall risk.

Although this strategy may not be the quickest way to instantly achieve degen-level yields, it is one of the most secure and safest ways to ensure you can gain exposure to increasing yield returns without being exposed to the often associated risk.

Types of Farms Being Evaluated

We are currently evaluating many different types of farms for potential integration. Ultimately, the more vetted farms we can include, the more diversified the strategy portfolio can become. This will also grant access to higher yields, as more liquidity can be deployed to higher-yield farms.

Some of the types of farms currently being evaluated include:

Farms on Ethereum

This has been the bread-and-butter for APY.Finance, including the Curve pools which provide safe and secure, low-risk yield. Often, these farms allow ease of access to liquidity with little friction or lockup. These farms help lay a foundation for future farm integrations, providing an extremely low-risk approach to the active strategy portfolio. We’re evaluating these farms closely.

Some examples of farms we are evaluating in this category include:

  • Orion.Money (Suggested by Telegram community member Gabriel T (Telegram))
  • Harvest.Finance (Suggested by Discord community member @snowwit243)

Farms on Ethereum Using Non-USD Based Stablecoins

Expanding to these farms may open doors to new and innovative opportunities, as well as increase strategy diversification. On the flip side, these farms may result in impermanent loss when converting stablecoins. As a result, we’re currently keeping an eye on these types of farms, although they are not the highest priority.

Some examples of farms we are evaluating in this category include:

  • Bancor
  • PAR / USDC
  • EURT (suggested by community members Timon and Joxes)
  • DFX Finance (suggested by Community Manager disco_ad. Special shoutout for the governance proposal thread!)

Cross-Chain Solutions

There are many farms outside of Ethereum worth evaluating that would have countless benefits, including greatly reduced gas fees. This greatly reduces onboarding costs and thus accessibility for users who are depositing smaller amounts into the platform. This may greatly reduce friction when onboarding new users, and introduce a whole new market-share to APY.Finance.

Some examples of farms we are evaluating in this category include:

  • Beethovenx.io on Fantom (suggested by community member 0xWives)
  • Anchor on TerraLuna
  • SushiSwap & Hundred.Finance on Harmony One
  • TraderJoe & Pangolin on Avalanche

Complex Farms

These are farms that may have special characteristics to gain exposure to or make withdrawals from. These are often farms that require liquidity to be locked for certain periods of time. This point of friction, with capital that is not as liquid, may cause complexities and not allow APY. Finance users to deposit and withdraw as seamlessly as intended.

Despite these potential downsides, there may be ways we can create workarounds to gain access to these farms in the future. As a result, we are keeping an eye on these farms, although they are not high priority.

An example of a farm we are evaluating in this category includes:

  • Ribbon.Finance (suggested by Telegram community member Cryptollo (Telegram)).

Vetting Process

Although APY.Finance inherently hedges against risks of farms that experience any sort of shortfall event through diversification, due diligence is still required when evaluating new farms.

  1. Yields. There is no defined minimum yield returns we require to vet farms for APY.Finance. As a yield aggregator, the more secure farms that are integrated, the better. As yield fluctuates between integrated farms, capital can be allocated accordingly to farms with more yield in the future.
  2. Risk. Is this a secure and vetted strategy? Are they audited? How long do depositors typically deposit? Is this a long-standing and secure platform? Is there regular communication from the development team? Etc.
  3. Viability. Is it a good fit for APY.Finance? Is there anything that may cause friction, including available liquidity?

Suggest New Farms

We hope this article provides insight into how we seek and vet new farms, as well as the types of farms we may eventually integrate.

We greatly appreciate users who have suggested farms in the past, and highly encourage any users to suggest a farm they feel may be a good fit for APY.Finance.

Users can suggest new farms by heading over to our ‘Add Farm’ suggestion form. Greater detail users provide when suggesting new farms will greatly aid the farm vetting process. The farm suggestions here will be forward and evaluated by the DeFi Researcher and the rest of the team

Onward and upward with new farms and increased yield returns!

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APY.Finance finds the best, risk-adjusted yield for traders by fully automating crypto yield strategies. Traders can easily access the latest, most innovative crypto markets with just a few clicks.

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