Yearn State of the Vaults #6

Week ending November 1, 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 🏦

Yearn Naming Standard

After many iterations and discussions, we are proud to present our new Yearn Naming Standard. This standard will apply to all future yVaults, as well as other Yearn products and projects. The new naming standard can already be seen on several of the test v2 yVaults deployed over the past week.

Major changes include using “yv” as the prefix for yVault token symbols (in preparation for tokens from other Yearn products such as yCover), as well as a refactoring for how we name Curve LP tokens. Most notable is the move away from the name “yCRV” that previously described Curve’s Y Pool token, which should help clear up confusion between the Y Pool and the Curve DAO Token (CRV) yVault. This also led to renaming the current yUSD in preparation for a v2 meta-yUSD that draws yield from multiple underlying yVaults.

Curve Y Pool yVault

As seen above, Yearn’s Curve Y Pool yVault accounts for a very a large percentage of the Y Pool on Curve, limiting this vault’s Max Boost. However, this yVault’s APY should increase nicely this week based on the most recent gauge weights.

Additionally, the Curve Y Pool yVault, as well as the DAI yVault and the TUSD yVault (which both deposit funds into the Curve Y Pool yVault) saw a significant spike in APY this week due to Harvest Finance’s recent exploit. Read more about this exploit here.

Curve Pool yVaults

Curve boost levels as of October 31st (current/max):

• Y Pool: 1.03/1.26
• BUSD Pool: 1.51/2.36
• sBTC Pool: 1.12/1.91
• 3pool: 1.24/2.23

Max boosts are determined in part by strategy holdings relative to total pool holdings while current boost is affected by how much veCRV the Yearn strategies have 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 the API here.

GUSD yVault

A bug was identified this past week in the GUSD yVault, resulting in a user receiving a smaller withdrawal amount than anticipated. A fix was deployed and the user was reimbursed. However, this resulted in the yearn.finance frontend displaying a wildly inflated APY calculation, which has since been updated.

Furthermore, another issue was discovered that would lead to exceptionally high slippage when depositing GUSD into the GUSD/3pool metapool on Curve. Currently, no funds are deposited into the strategy, and due to this bug a migration to v2 yVaults may be optimal before reopening.

TUSD yVault

A novel flash loan attack vector was reported via Yearn’s security disclosure process this week by security researcher Wen-Ding Li. Within two hours, a fix was deployed to mainnet by Yearn’s security team. All funds are safe; read the full disclosure here.

v2 yVaults

As mentioned last week, the GitHub repo for v2 yVaults has gone public and can be found here. Several v2 vaults are undergoing active testing (see below), with many issues already identified and fixed. While several of these yVaults are live on mainnet, they are not available on the yearn.finance frontend because they are test vaults.

Yearn has scheduled their first audit for v2, which will begin on November 2nd and take approximately 2 weeks. A second auditor is currently being negotiated with, and scheduling for this audit has not been finalized. v2 yVaults will not move out of the testing phase for at least two more weeks.

CRV yVault

Note: This v2 yVault is being used for testing and is unaudited. Bugs will exist and may lead to loss of funds. Seriously, do not put funds in here that you are not okay with losing.

The very first Yearn v2 strategy went live this week. You can find the vault token here and the strategy here. The current strategy simply deposits with C.R.E.A.M. to earn interest on CRV. Its main functionality is for testing out v2, and as with the other v2 yVaults, there is a debt limit (250k CRV) and the rate limit increases from 0 at a rate of 50 CRV per block.

DAI, ETH, and WBTC yVaults

Note: This v2 yVault is being used for testing and is unaudited. Bugs will exist and may lead to loss of funds. Seriously, do not put funds in here that you are not okay with losing.

The test version of the leveraged COMP-farming strategy for DAI using the v2 yVault architecture is live and in testing on mainnet. Strategy code can be found here, and the yVault and Strategy contracts are live on mainnet. This test vault currently has a $100,000 limit.

Uniswap Pool yVaults

Note: These v2 yVaults are being used for testing and are unaudited. Bugs will exist and may lead to loss of funds. Seriously, do not put funds in here that you are not okay with losing.

This week, v2 yVaults for both WBTC-WETH and DAI-WETH Uniswap LP tokens were deployed with test strategies. Here you can find the vault and the strategy for yv-Uni-WBTC-WETH, and the vault and strategy for yv-Uni-DAI-WETH.

These test vaults already produced multiple helpful findings, including an issue that significantly inflated the price per share on the WBTC-WETH vault. A fix has already been deployed, and several other issues discovered during testing can be found here.

One of the previously mentioned issues is illustrated above. The current strategy stakes Uniswap LP tokens on pickle.finance (which farms UNI automatically) and also converts farmed PICKLE into more of the underlying LP tokens. However, this could be taken one step further by instead staking the PICKLE to earn WETH rewards. An ambitious strategy for maximum brining!

Current Vault Strategies 📝 and Weekly APYs💰

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: 15.77%

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: 9.01%

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: 19.68%

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: 2.77%

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: 9.26%

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: 26.34%

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: 21.4%

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: 6.03%

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: 6.13%

ETH yVault

StrategyMKRVaultDAIDelegate. Deposits ETH into a Maker CDP 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 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 APY: 3.68%

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: 0.02%

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 issues described above.

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 🔗

• yVaults Holdings/Deposited/Withdrawn– Dune Analytics
• Recycler– zap multiple stablecoins into the yUSD Vault in one transaction
• Estimate future yVault ROI
• Calculate Governance and yVault APYs (and calculate current yUSD value)
• View current ROI, TVL, and strategies several ways: Yearn stats, stats.finance, feel-the-yearn, yearn.party, yVault-ROI
• Use the yearn.tools API to view APYs, contract info, as well as boost info for relevant yVaults