CAI announces partnership with Yield Yak to boost yields
The partnership
Colony and Phuture are delighted to announce an official partnership with Yield Yak, to boost yields on CAI, the Colony Avalanche Index.
Since its inception, Yield Yak has been a leading autocompounder on Avalanche and an essential pillar to DeFi within the ecosystem. Naturally, we wanted to embed Yield Yak’s yield-generating protocol into our upcoming product CAI, to maximize the returns our users can access when investing in the index.
“We’re thrilled and honored to be working with Colony and Phuture on their new Colony Avalanche Index. Yield Yak specialise in yield optimisation strategies, and we look forward to helping CAI reach its full potential.” — Yield Yak Marketing Lead, Dylan
How will CAI utilize Yield Yak?
Idle assets can be a large opportunity cost. CAI minimizes that by depositing a portion of each asset into yield bearing vaults on Yield Yak.
At launch, 20% of each asset reserve will be deposited into Yield Yak, increasing gradually over time.
As investors mint and burn CAI, it changes the quantity of assets held by the index, so CAI will periodically refresh the balances it holds on Yield Yak to ensure it is adhering to its target percentage. More information about rebalancing and CAI ongoing management will be released soon!
Having funds available outside of Yield Yak allows CAI to easily support redemptions and rebalancing without withdrawing from Yield Yak. This improves gas costs for users and ensures CAI maintains a consistent APR on the assets it manages.
The yield bearing vaults that CAI will utilize must adhere to several key standards:
- Returns are not impacted by impermanent loss.
- The underlying protocol through which yield is generated must pass our security assessment. These include security audits, time in the market and significant usage, amongst others.
- Where leverage is used, it must be deemed low risk through the lending and borrowing of the same asset.
- Funds held by the vault must always be redeemable without lockups.
Once a vault has passed all the above criteria, it becomes whitelisted for use on CAI. At launch, each asset will support exactly one Yield Yak vault, but in the future we intend to support multiple vaults for each asset to diversify CAI’s exposure to any one vault.
Learn more about CAI and its investment strategy here.
About Yield Yak
Yield Yak makes numbers go up. Ape into new autocompounder farms with quick releases and high yields. Swap on Yak for the best prices on trades with zero aggregator fees. Sit back and just earn, including big APYs on stablecoin farms.
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About Phuture
Phuture (PHTR) is a decentralised crypto index platform that simplifies investments through automated, themed index funds on Ethereum and Avalanche. Accessible by anyone with an internet connection, Phuture is perfect for investors looking to upgrade their crypto investment strategy. Founded in 2019, Phuture has raised USD 3.75 million from VCs and crypto funds. Follow Phuture on Twitter and subscribe to their announcements.
About Colony
Colony is a community driven accelerator, evolving into an inclusive DAO, to boost Avalanche’s ecosystem growth. Powered by a governance token: $CLY.
Colony deploys capital within Avalanche on early stages projects, provides liquidity to DeFi protocols, validates networks through stacking capabilities and will maintain an Index on top Avalanche projects. The true sustenance and value generated by Colony’s investments is routed back to the community through airdrops, a buyback mechanism, and staking rewards.
