iTokens: DeFi yield tokenized

Instadapp is proud to introduce our newest DApp: Instadapp Lite

DeFi Yields and Maximizing Earning Potential

Our standard Instadapp dashboard is a powerful DeFi engine, jam packed with advanced defi functionality, flashloan enabled strategies and more! However to get the most out of Instadapp requires active asset management, monitoring the market, and executing transactions in a timely manner. Instadapp Lite brings DeFi strategies from Instadapp in a simple to use yield earning vault!

Instadapp Lite brings you one click access to the juiciest returns in DeFi!

Launch Vault: ETH Vault

Our debut vault will utilize the DeFi Smart Account to generate a leveraged position using two correlated assets for high returns with lower risks. This strategy utilizes Lido.Finance stETH or Staked ETH. STETH is a tokenized deposit of POS ETH that earns interest. This vaults enhances the earning potential for stETH and bolsters the amount of ETH staked on the beacon chain!

Lido Staked ETH earns about 3–5% with its built in interest rate. Our ETH Vault executes a recursive leverage on stETH using ETH debt on AAVE. This enables us to provide a relatively low risk, high yield on ETH. Prior to launching Lite, Instadapp submitted a proposal to AAVE governance in order to better align the rates to make this strategy more effective for all users of AAVE, this has increased AAVE revenue as well as ensures the sustainability of these yields for all participants.

Expanding the Staked Interest Rate to other Assets

Lido Staked ETH has bridged the interest rates of staked ETH into the current ETH chain, by depositing ETH into Lido Finance users can earn the ETH POS staking rate of 4%. What if we utilized stETH to extend interest rates to other tokens?

By utilizing stETH on AAVE we can amplify these rewards by borrowing against ETH safely increasing the interest rates by 2x-3x. Instadapp Lite will expand our interest rates to other assets utilizing Ethereum’s built in staking interest rates. This will enable Instadapp Lite to offer reliably stable interest rates for some of the most popular assets in DeFi such as ETH, BTC and stablecoins.

Composable Yield Bearing Assets: iTokens

When users utilize Instadapp Lite their deposits are tokenized as iTokens. iTokens are standard ERC20 tokens. iTokens can be transferred, swapped, etc. iTokens can also be integrated into other protocols, utilized as a general purpose interest rate product or built upon for other new use cases. Here are some examples of how iTokens could be utilized:

• Utilize iTokens as yield bearing collateral in DeFi protocols
• Use iTokens as a yield plug in to offer interest to other protocols
• Stack iTokens in Treasuries for a hands off management of assets and tax efficient yield

There are several advantages to using iTokens to get yield. iToken balances will not change in your wallet, instead the amount redeemable increases. This makes it highly tax efficient for users who must account for any balance changes in their transactions.

Vault Rebalancing

Our primary vault: stETH uses stETH as collateral and ETH as debt. This is a relatively safe 1:1 as both are correlated assets. For these other vaults their assets are not correlated and therefore will need to be rebalanced with changes to the ETH price.

When the ETH price increases, vaults will rebalance by shifting ETH debt to deleverage non-ETH denominated vaults.

When the ETH price decreases, it makes the non-ETH vaults safer as their debt is now worth less. Instadapp Lite can displace previously assumed Debt during price decreases.

Instadapp Lite vaults can rebalance between themselves to offset any changes in ETH price, this enables us to maintain a consistent interest rate while being able to adjust debt during this price changes. Stay tuned for an upcoming post by our developers to learn more of the technical workings of Instadapp Lite.

Understanding Risks

Instadapp Lite utilizes multiple DeFi protocols and assets to generate a healthy yield. Lite Vault strategies utilize leverage strategies to earn higher yields. By utilizing staked assets like stETH against their correlated counterparts, we can earn higher yields in a risk minimized fashion.

The underlying protocol positions will have between a 3–10% buffer from their max debt to collateral ratios, depending on interest rates and asset type. For correlated assets we can utilize a smaller buffer as we can quickly deleverage those positions. For non-correlated assets there will be higher buffer to enable debt rebalancing during price changes.

Vault Rebalancing can in a couple of ways, the first is automatically rebalancing. The Instadapp Lite vaults rebalances occasionally to create more withdrawals or if the position needs to be deleveraged. Rebalancing can also be issued from the team multi-sig and lastly the vault rebalancing can be called through the contract openly. This last method is open call function that is incentivized, enabling anyone to rebalance and earn a small fee for doing so.

Beyond the Merge

We believe post-merge the success of Instadapp Lite and of staked assets from protocols like Lido Finance will continue to provide great returns while making ETH and stETH redeemable in real time creating greater liquidity and depth for holders.

Staked Interest earning assets will be available for Matic, Avalanche and other popular Proof of Stake chains utilizing these staking rates we can expand Instadapp Lite to other networks and tokens.

Instadapp Lite is your go to for your idle assets. Simply hop on over to lite.instadapp.io and find your yield earning opportunity!

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