Yearn State of the Vaults #10

Week ending November 29, 2020

Overview

To help consolidate information in a single place, we created State of the Vaults–a weekly update that will include yVault-related updates from the previous week as well as more in-depth information about the actions (strategies) these vaults are performing.

  • If you’re looking for a guide on using the yVaults, check out some of our fantastic docs–including how to use a yVault and how to mint yUSD.
  • If you’re looking for current ROIs (annualized returns) on the yVaults, you can view the official stats here–with many more ways to visualize this data available in the links at the bottom of this page.
  • And if you’re interested in an overview of everything going on in the Yearn ecosystem, subscribe to Yearn’s weekly newsletter here.

Vault Updates 🏦

TUSD yVault

Previously, TUSD’s strategy had new deposits paused after the discovery of a vulnerability. A new strategy to remedy these issues has been deployed and can be found here. As before, this strategy deposits TUSD to Curve.fi to farm CRV. For more details, see the strategy descriptions at the end of this article.

Curve Pool yVaults

Curve boost levels as of November 27th (current/max):

  • Y Pool: 1.23/1.75
  • BUSD Pool: 1.37/1.99
  • sBTC Pool: 1.36/1.91
  • 3pool: 1.66/2.19
  • Compound Pool: Boosted, but API not live yet

Max boosts are determined in part by strategy holdings relative to total pool holdings while current boost is affected by how much veCRV Yearn has locked. Furthermore, an update to the yearn.finance UI is coming soon that will display current boost levels for each vault. This data is currently accessible in the contracts as well as from the API here.

You may also notice that APYs have been steadily increasing for these yVaults. Since the strategy for these yVaults consists of farming and selling CRV tokens, as CRV goes up in price, so does APY.

veCRV Backscratcher

Curve’s proposal CIP#14 has been applied, meaning that admin fee distribution (in the form of 3pool LP tokens) should be claimable for yveCRV holders ~9 AM EST on November 30th.

v2 yVaults

This week, Yearn received reports for the first of two audits to be conducted on the v2 yVault code. While no major issues were found in the Solidity code, the audit of the Vyper code did find an interesting edge case regarding a potential withdrawal lock that will be addressed before final release. Negotiations with the firm for our second audit are nearly finalized, and an estimated timetable for this audit should be announced shortly.

Although the second audit is not yet complete, Yearn is planning to gradually phase in limited versions of these yVaults soon. These vaults will include a cap on deposits that will ramp up over time, and will begin with minimal strategies. Potential early yVaults include HEGIC, DAI, WETH, and WBTC, but this list is not final and is subject to change.

Furthermore, as one early tester of the DAI v2 yVault pointed out, gas usage has been optimized in v2 yVaults, resulting in a 75% reduction in the cost of depositing compared to v1.

v2 WETH yVault

The 0.2.0 WETH yVault was deployed this week, and can be found here. The the first strategy has been deployed here, which is a lending optimizer strategy. This strategy functions similarly to the original iEarn tokens by seeking the highest passive yield in money-markets such as Compound, Aave, and Cream. Additional strategies will include minting DAI with a Maker vault and delegating the DAI to the DAI yVault.

Additionally, the yvWETH Vault has the first implemenation of a feature new to v2, Guest List. This permits certain thresholds to be set before a user can deposit to a yVault. In this case, users need 1 YFI to deposit, but this number will decay to 0 over the course of 30 days. A UI for this yVault (WETH Citadel) is forthcoming and a preview can be found here.

v2 DAI yVault

This week, the v2 DAI test yVault upgraded to the 0.2.0 standard. You can find the old vault here, with the new vault here. The first strategy will be the leveraged DAI COMP-farming strategy that was tested in the 0.1.0 version, and will be deployed soon. Similar to the WETH yVault, deposits to this vault are limited by a Guest List.

Odds and Ends

  • Pickle Finance’s protocol will be integrating with Yearn. Details can be found here, but highlights include Pickle strategists and assets moving to Yearn’s yVaults, as well as a new PICKLE emission system similar to Curve’s system for distributing CRV that will bring additional yield to depositors in Yearn’s Vaults. Additionally, a Twitter thread by Yearn contributor tracheopteryx regarding the role of Yearn’s DAO in the merger can be found here.
  • Two days later, Yearn announced an integration with Cream Finance, with details here. Cream will bring significant functionality to Yearn and the yVaults as an established, decentralized money market, and will also serve as the launchpad for the previously announced StableCredit.
  • Just this morning, Yearn announced integration with Cover Protocol. You can find the announcement here, and one of the many benefits will include automatic coverage of Yearn’s yVaults via Cover’s perpetual products.
  • Argent announced integration of Yearn’s v1 yVaults into their wallet this week.
  • A proposal has been submitted to Yearn’s forums that would combine Yearn’s governance staking fees with a YFI Maker vault, allowing stakers to earn protocol fees and yield-farm with DAI minted from their YFI. Some of the profits from this farmed DAI would then go to support ecosystem initiatives such as yAcademy. You can find this proposal here.

Current Vault Strategies 📝 and Weekly APYs💰

Curve Compound yVault

StrategyCurveCompoundVoterProxy. Deposits Curve-Compound LP token into the liquidity gauge at Curve.fi and farms CRV. 10% of this CRV is locked as veCRV (to boost returns) and the remainder is sold for DAI, deposited back into the Compound pool at Curve to obtain Curve-Compound and this is deposited back into the yVault. Curve boost is currently enabled for this strategy.

Current APY: 7.15%, but will increase as the vault continues to grow and harvest is called more frequently.

Curve 3pool yVault

StrategyCurve3CrvVoterProxy. Deposits Curve-3pool LP token into the liquidity gauge at Curve.fi and farms CRV. 10% of this CRV is locked as veCRV (to boost returns) and the remainder is sold for DAI, deposited back into the 3pool at Curve to obtain Curve-3pool and this is deposited back into the yVault. Curve boost is currently enabled for this strategy.

Current APY: 16.20%

Curve Y Pool yVault

StrategyCurveYVoterProxy. Deposits Curve-Y into the Y Pool liquidity gauge at Curve.fi and farms CRV. 10% of this CRV is locked as veCRV (to boost returns) and the remainder is sold for DAI, deposited back into the Y Pool at Curve to obtain Curve-Y and deposited back into the yVault. Curve boost is currently enabled for this strategy.

Current APY: 12.31%

Curve BUSD Pool yVault

StrategyCurveBUSDVoterProxy. Almost identical process as the Curve Y Pool yVault listed above, except it deposits Curve-BUSD (base asset of the yVault) back into the yVault instead of Curve-Y. Curve boost is currently enabled for this strategy.

Current APY: 14.8%

Curve sBTC Pool yVault

StrategyCurveBTCVoterProxy. Deposits Curve-sBTC (Curve.fi sBTC pool LP token) into the sBTC liquidity gauge at Curve and farms CRV. 10% of this CRV is locked as veCRV (to boost returns) and the remainder is sold for WBTC, deposited into the sBTC pool at Curve and then this is deposited back into the yVault. Curve boost is currently enabled for this strategy.

Current APY: 7.56%

YFI yVault

StrategyYFIGovernance. Deposits YFI into the Yearn governance staking contract, earns Curve-Y governance rewards, converts Curve-Y into USDT, buys additional YFI with the USDT, and deposits back into the yVault.

Current APY: 1.46%

DAI yVault

StrategyDAICurve. Deposits DAI into the Y Pool on Curve.fi and deposits the resultant Curve-Y into the Curve Y Pool yVault.

Current APY: 12.63%

TUSD yVault

StrategyTUSDCurve. Deposits TUSD into the Y Pool on Curve.fi and deposits the resultant Curve-Y into the Curve Y Pool yVault.

Current APY: 6.85%

USDC yVault

StrategyDForceUSDC. Deposits USDC into dForce.network and farms dForce Token, which is sold for USDC and redeposited back into the yVault.

Current APY: 7.59%

USDT yVault

StrategyDForceUSDT. Deposits USDT into dForce.network and farms dForce Token, which is sold for USDT and redeposited back into the yVault.

Current APY: 5.62%

ETH yVault

StrategyMKRVaultDAIDelegate. Deposits ETH into a Maker Vault to mint DAI. This minted DAI is deposited into the DAI yVault which deposits DAI into the Y Pool at Curve.fi and farms CRV. Profits from the CRV sales are used to purchase additional ETH, which goes back into the ETH yVault. The current strategy targets a collateralization ratio of 200% for the Maker Vault and periodically queries Maker’s Oracle Security Module (OSM). Therefore, the strategy is able to see the future oracle price 1 hour before price updates are made.

This yVault is currently undergoing an optimization process that will enable the Maker Vault to be shifted to new strategies without totally unwinding the debt, which will allow flexibility and deleveraging protection. The optimization process is estimated to take an additional 1 to 3 weeks. Unforeseen events may delay this update.

Current APY: 1.65%

aLINK yVault

StrategyVaultUSDC. Uses aLINK as collateral to borrow USDC from Aave. The USDC is deposited into the USDC yVault and farms based on that yVault’s current strategy (listed above). Excess profits are harvested and used to buy additional LINK, which is deposited into Aave for aLINK.

Current APY: 3.64%

GUSD yVault

StrategyCurveGUSDProxy. User deposits GUSD, which is deposited to GUSD/3pool Metapool on Curve.fi. The gusd3crv LP token is deposited into the liquidity gauge at Curve.fi and farms CRV. 10% of this CRV is locked as veCRV (to boost returns) and the remainder is sold for DAI, deposited back into the GUSD/3pool Metapool at Curve to obtain gusd3crv and deposited back into the yVault.

Current APY: No funds are currently in strategy due to slippage issues. You can read more about this issue in previous State of the Vaults here and here.

LINK yVault

Deposits for this vault are currently disabled– please deposit LINK to Aave first and use aLINK yVault instead.

**Current APY for all yVaults is based on the most recent 7-day period, annualized.

Useful Vault Links 🔗

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dudesahn

dudesahn

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🐶👒 at Yearn. Find me on telegram or twitter @dudesahn.