Introducing Velo sUSD/USDC Pool and Key Updates to Barnbridge Smart Yield Mechanics
Barnbridge is excited to announce the launch of its Velodrome sUSD/USDC pool on Optimism, a Layer 2 scaling solution for Ethereum. This move comes after the successful deployment of Smart Yield on Arbitrum, with the expansion to Optimism furthering the project’s commitment to providing straightforward fixed-yield opportunities for users.
The mechanics of the Smart Yield Velodrome sUSD/USDC pool are designed to optimize the yield generation process while maintaining a stable and secure environment for users. When a user deposits USDC into the vault, a portion of the deposited USDC is automatically swapped for sUSD. Both USDC and sUSD are then deposited into the Velodrome sUSD/USDC liquidity pool, which generates variable yield through earning rewards. Once the epoch ends, the liquidity is removed from the Velodrome sUSD/USDC variable pool, and the sUSD is swapped back into USDC. Finally, the resulting USDC becomes available for users to withdraw.
In addition to the launch of the Velo sUSD/USDC pool, we have made significant updates to the Smart Yield mechanics to address potential shortcomings and to enhance the overall user experience. Here are the key changes to the Smart Yield mechanics:
Elimination of the Withdrawal Period
Previously, the Smart Yield system included a withdrawal period that allowed users to withdraw their deposits before an epoch began. This feature has now been removed, and users can no longer withdraw their deposits until the epoch ends. This change has been made to prevent potential manipulation, such as users making massive deposits to manipulate the APY and force other depositors to withdraw, only to withdraw their own deposits before the epoch starts. By eliminating the withdrawal period, this attack vector has been removed.
Introduction of a Deposit Cap
To further mitigate the risk of potential manipulation and provide a clearer understanding of the risks involved, we introduced a cap on deposits. This cap allows users to determine a minimum APY value, ensuring that the APY will not go below a certain point. This change provides users with more transparency and helps them make informed decisions when participating in the fixed-yield pools.
The launch of the Velodrome sUSD/USDC pool on Optimism and the updates to the Smart Yield mechanics demonstrate our commitment to constantly evolving and improving its platform to provide the best possible user experience. These changes not only make the platform more secure but also allow for greater participation in the growing fixed-income DeFi market.
