In the next 3~4 days we will be launching the UI for yearn.finance v2
6 months ago yield farming was as simple as “who has the highest APR, switch funds to them”. There was a lot more nuanced logic involved, but lets keep it simple.
Today, yield farming is becoming more and more complex. The sheer amount of knowledge required to know the intricacies of different systems in itself has taken us months to learn and comprehend.
The other problem we had with v1, it was rigid. If a new lender was added with higher rates, we could not include it in v1.
So, we derived a new way of approaching the problem, a lot of what we describe now, we have been doing manually for months, and the components are finally automated to the point that we are happy to start trials on it.
The system is comprised out of 3 main components;
yVaults are simple token containers and function like y Tokens. They track your share of an ever growing pool.
One exception is delegated yVaults. As an example; instead of providing DAI, you can provide LINK. You then assign your credit line to the system, which in turns generates yDAI for you. This then farms based on the most optimum strategies available, without needing to lose your exposure. Delegated yVaults support LINK, LEND, REN, SNX, and wBTC.
Controller is, as its name suggest, the control mechanism, since yield farming strategies have become reliant on understanding the value of external assets, this has led us to have the controller managed by governance. A subset of governance selected to manage will assign the highest yield strategies on a per vault basis.
Strategies are simplistic containers, they specify what they “want”, and their job is to maximize returns on that asset however they can, in a lossless way.
The system is designed to be gas efficient for small yield farmers, allowing deposits and withdraws as low as ~$2 even at 100 gwei.
Strategies can be submitted by anyone, we do have a predefined list of strategies we consider to be the current optimum in the market. A strategy can receive rewards from any additional sources other than its core function (DAI => aDAI for example).
These additional rewards are split between the governance ecosystem, the yield farmers, and the strategy creator. So if your strategy is selected as the highest performing strategy, you receive funds every time the system receives rewards.
So if you ever find this ecosystem too complex, or too time consuming, or simply too expensive (gas fees), then you can use yearn.finance v2
We’ll take care of everything for you, you simply check in and see your portfolio grow.