Beyond the Yield Spectrum: introducing Junior Best Yield vaults
Best Yield welcomes Junior Perpetual Yield Tranches as new yield sources, bringing risk-adjusted features to Idle DAO’s flagship product
Idle DAO is excited to announce the launch of a brand new product: Junior Best Yield, merging the power of Best Yield aggregation and the boosted returns of Junior Perpetual Yield Tranches.
The first Junior Best Yield strategies are launching on USDC and USDT and integrating Junior Tranches based on Euler staking and Morpho-Aave markets.
Background
In 2019, even before DeFi was a thing, our journey started with the launch of Idle Best Yield: the first yield automation strategy designed to maximize yields by aggregating and optimizing funds across multiple battle-tested DeFi lending protocols — soon to become our flagship product.
In November 2021, our strategies further expanded with the introduction of Perpetual Yield Tranches: an innovative primitive that splits a single yield source into two risk-return profiles, i.e. Senior and Junior.
Throughout this time, product development has been continuous and unwavering. We have expanded our strategies by adding more markets and the Idle DAO product suite has established itself as the ultimate source of yield by providing an increasing number of risk-adjusted and automated solutions for the main crypto assets, all while offering single-side exposure with no impermanent loss.
In this context, a new long-term vision emerged: leveraging DeFi composability to make the Best Yield vaults and Perpetual Yield Tranches ever more integrated and synergistic with each other, opening up new opportunities for investors to maximize their capital efficiency based on their needs.
The first step towards this goal has been the addition of Clearpool-based Senior Perpetual Yield Tranches as yield sources for Best Yield (following IIP-26 and IIP-27, and currently disabled), which served as a successful beta test for future innovations. In fact, soon after came the new IIP-31 (executed a few days ago), adding Euler staking Senior Perpetual Yield Tranches.
In the wake of IIP-31, today’s launch of Junior Best Yield not only represents the release of a brand-new product, but also redefines the entire structure of the Idle product suite.
Let’s see how.
Idle Product Suite Redesign
Based on the different aggregated yield sources, we can now identify three types of Best Yield strategies, namely:
- “OG” Best Yield: the original Best Yield strategy, automatically maximizing capital efficiency across the over-collateralized, top-tier lending protocols Aave and Compound.
- Senior Best Yield: expanding the underlying sources of OG Best Yield by adding Senior Tranches alongside existing sources Aave and Compound, maintaining the same conservative risk profile while extending and improving the yield spectrum.
- Junior Best Yield: aggregating multiple Idle Junior Perpetual Yield Tranches on a single asset (starting with USDC and USDT) as underlying to create a new tier of risk in Best Yield, allowing to automate an aggressive approach and offer significantly higher APYs.
Consequently, the typical risk-return tailoring of Idle Perpetual Yield Tranches expands also to Best Yield, outlining a new structure for the Idle product suite:
In other words, starting today, the wide range of risk-adjusted strategies provided by Idle comes packed with an extra layer of customization:
- Users who want to maximize their yields with little to no effort can easily choose the Best Yield strategies that most suit their risk/return appetite, taking advantage of the typical processes of gas costs socialization, and automation of the yield generation and rebalance implemented through Idle Best Yield;
- Users who prefer to put their capital to work by autonomously picking a single yield source protocol can choose between the Senior and Junior classes of Idle Perpetual Yield Tranches.
A glimpse into the future
To sum up, the launch of the first Junior Best Yield vaults on USDC and USDT ushered in a new phase of product expansion.
Our product suite has come a long way since its inception, offering investors a variety of innovative and profitable investment opportunities. The next chapter of this evolution promises to be even more exciting.
New Junior and Senior Best Yield will soon follow the Tranches on Euler staking and the just-released on Morpho-Aave, with more and more covered markets and a growing number of aggregated yield sources.
In this process, we expect that the OG Best Yield strategies will become fewer and fewer. At the same time, Senior and Junior Best Yield will continue to expand and flourish, becoming ever more sophisticated.
But that’s not all. Further improvements are already in store, including thematic products and a new generalized leveraged strategy aimed at managing multiple types of collateral while leveraging yields and minimizing the risks of liquidation losses.
But we have anticipated enough, now it’s time to get back to work. Buckle up, as 2023 is shaping up to be a fantastic year for Idle DAO.
Stay tuned!
About Idle DAO
Idle DAO is a decentralized organization that builds yield automation infrastructure for DeFi. From brand new DeFi protocols to institutional and DAO treasury managers, businesses of every size use our protocol to optimize capital efficiency and manage their treasuries with DeFi.
We believe everyone deserves the best for their idle funds 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. To learn more about our products and services:
