Yearn State of the Vaults #2

Week ending October 4, 2020

Overview

We’ve heard concerns regarding the status of the yVaults, and to help consolidate information in a single place, we created State of the Vaults– a weekly update that will include yVault-related news from the previous week as well as more in-depth information about Yearn’s yVaults.

• 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 those here.
• And if you’re interested in an overview of everything going on in the Yearn ecosystem, subscribe to Yearn’s weekly newsletter here.

Vault News 📰

YFI up for vote as Maker Collateral

A Community Greenlight Poll is currently taking place at MakerDAO to determine if YFI should be prioritized for inclusion in the Maker Protocol. If YFI is added to Maker, this would allow it to be used as collateral for minting DAI, and would open up new strategies for a YFI vault– such as the one detailed here. Voting is currently open here and ends Oct 5, 12 pm ET. As of this writing, 100% of MKR votes have been for adding YFI as collateral.

Yearn whitelisted for Maker BTCUSD OSM

Whitelisting of Yearn Finance on the Maker BTCUSD Oracle Security Module (OSM) occured this past week as a part of Maker’s most recent Executive Vote. As Yearn team member Artem detailed in his post on the Maker governance forum here, this feature will “will maintain a Maker Vault and delegate the drawn DAI to the yearn DAI Vault. To make the strategy able to rebalance and unwind, we require access to the next OSM price.” Similar to the yETH vault, BTCUSD OSM access will allow Yearn to see the BTCUSD oracle price on Maker one hour in advance to help ensure that any future yBTC Vault stays adequately collateralized.

How does Yearn Finance work?

Artem and Daniel put together this very intricate overview of how all of the many parts of the Yearn ecosystem work together to produce yield for users– including the yVaults, strategies, governance, and even the treasury. Check it out!

Vaults 101 at ETHOnline

Members of the Yearn developer team (Doug Molina, fubuloubu, Orbxball, x48) appeared October 1st on ETHOnline to discuss Yearn yVaults and their current strategies. This presentation was intended to give other developers insight on yVaults and to encourage developers to create new strategies, which they will be compensated for. You can view this presentation here.

v2 yVaults In Progress

Although there is no concrete news to announce at this point, here’s a teaser courtesy of banteg and fubuloubu– v2 yVaults are currently under development and hopefully should be formalized this week!

Vault Updates 🏦

yETH

Undergoing an optimization process that will enable the CDP 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.

yYFI

The team identified StrategyYFIGovernance was incorrectly deployed with a 5% withdrawal fee instead of the usual 0.5% fee. The fee for this vault has been corrected, and affected users were reimbursed the overcharged YFI.

Furthermore, snapshot voting for depositors in the yYFI vault has now been enabled– a great benefit, especially since the yYFI vault is currently staking all YFI in governance.

yUSD/ycrvBUSD/ycrvsBTC

This week, Artem posted this diagram that can be used to better understand the proxy bug, and updating these vaults with the updated strategy is one of the team’s highest priorities.

Current Vault Strategies 📝 and Weekly ROIs💰

yETH

StrategyMKRVaultDAIDelegate. Deposits ETH into a Maker CDP to mint DAI. This minted DAI is deposited into the yDAI vault 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 yETH vault. The current yETH strategy targets a collateralization ratio of 200% for the CDP 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 CDP 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 ROI: 1.15%

yYFI

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

Current ROI: 8.06%

yUSD

StrategyCurveYCRVVoter. Deposits yCRV into the y Pool liquidity gauge at Curve.fi and farms CRV. A portion of this CRV is redeposited back into the gauge (to boost returns) and the remainder is sold for DAI, deposited back into the y Pool at Curve to obtain yCRV and deposited back into the yVault. Currently, this strategy is not receiving the Curve boost due to previously mentioned issues with the proxy voter strategy.

Current ROI: 12.15%

ycrvBUSD

StrategyCurveYBUSD. Almost identical process as the yUSD vault listed above, except it deposits yBUSD (base asset of the yVault) back into the yVault instead of yCRV. Currently, this strategy is not receiving the Curve boost due to previously mentioned issues with the proxy voter strategy.

Current ROI: 8.46%

ycrvsBTC

StrategyCurveSBTC. Deposits crvsBTC (Curve.fi sBTC pool LP token) into the sBTC liquidity gauge at Curve and farms CRV. A portion of this CRV is sold for WBTC, redeposited into the crvsBTC pool at Curve and the remainder is deposited back into the yVault. Currently, this strategy is not receiving the Curve boost due to previously mentioned issues with the proxy voter strategy.

Current ROI: 6.77%

yDAI

StrategyDAICurve. Deposits DAI into the y Pool at Curve.fi and farms CRV. A portion of this CRV is sold for DAI, redeposited into the y Pool and the remainder is deposited back into the yVault.

Current ROI: 13.11%

yTUSD

StrategyTUSDCurve. Operates the same as the yDAI vault, except deposits TUSD instead of DAI into the y Pool at Curve.fi.

Current ROI: 12.63%

yUSDC

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

Current ROI: 5.19%

yUSDT

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

Current ROI: 1.09%

yaLINK

StrategyVaultUSDC. Uses aLINK as collateral to borrow USDC from Aave. The USDC is deposited into the yUSDC vault 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 ROI: 0.06%

yLINK

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