Yearn State of the Vaults #7

Week ending November 8, 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 🏦

YFI yVault

Maker’s most recent executive vote has gone live, and includes onboarding YFI as a new collateral type. Addition of YFI as collateral on Maker will enable new strategies, such as the leveraged-DAI COMP-farming mentioned below, to be used for the YFI yVault. If you’re a MKR holder, go vote!

Curve Pool yVaults

Curve boost levels as of November 6th (current/max):

• Y Pool: 1.06/1.57
• BUSD Pool: 1.16/2.01
• sBTC Pool: 1.13/1.93
• 3pool: 1.23/2.18

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.

veCRV Backscratcher

WARNING: This product has no withdrawal functionality. Please read the code and understand it first before depositing.

A new product was launched this week, codenamed “yBackscratch”. The process is extremely simple: a user deposits CRV, which is sent to Yearn’s veCRV voter address and locked for four years as veCRV. This locked veCRV helps boost rewards of Yearn’s yVaults that use strategies on Curve.fi. At the same time, users of the veCRV yBackscratch see increased admin fees from veCRV staking because of the veCRV locked up by the other strategies (10% of every harvest).

Again, it is very important to note that the lockup period for the veCRV is increased every week, and there is no withdraw feature — meaning that once CRV is deposited, it is in there forever. You will never get your CRV back; you will only receive admin fees from the veCRV. If you’re interested in learning more, the contract address can be found here. Furthermore, if you’d prefer to use a UI, one can be found here.

Yearn developer Banteg also posted an overview of how Yearn interacts with Curve here on Twitter, pasted below for reference.

TUSD, DAI, and GUSD yVaults

Due to a recently discovered vulnerability, all three of these yVaults currently have setMin(0), meaning that funds cannot be deposited from the vault into the strategy and earn() calls will not work. While a workaround for this is possible (detailed in the linked vulnerability disclosure), with the v2 yVault standard currently under audit, it makes more sense to instead release new versions of these vaults upgraded to v2. Funds currently in the strategy are safe and still generating yield, but no more funds will be deployed to the strategy in either of these three yVaults.

v2 yVaults Fee Structure

Over the past week, there has been much discussion on Yearn’s governance forums around re-working the fee structure for Yearn’s yVaults, how protocol fees are divided between stakers, strategists, and contributors, and what form this compensation should take. The discussion began here, and has since been separated into separate proposals for each issue. The first issue, setting the fee structure for v2 yVaults, can be seen here: YIP 46.

For the purposes of this vote, the Snapshot poll is binding. Voting is open now here and closes at 7:00 PM EST, November 9.

HEGIC v2 yVault

WARNING: 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.

Another of the test v2 yVaults, Yearn’s HEGIC vault bought its first ETH lot this week, reaching its test limit of 888,000 HEGIC. You can find the yVault contract here and the strategy here.

ETH v2 yVault

WARNING: 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.

A v2 test ETH yVault has been deployed this week with a 250 ETH deposit limit. Furthermore, this is the first of the v2 test vaults to implement multiple strategies, one of the new features for Yearn’s v2 yVaults.

DAI v2 yVault

The new v2 test DAI yVault (mentioned last week) has reached max capacity (100,000 DAI). If you’d like to monitor its progress, the vault contract is here and the strategy is here. The strategy is currently supplying 362,000 DAI while borrowing 264,260 DAI to farm COMP.

SushiSwap LP yVaults

A SushiSwap LP yVault framework is nearly finalized. This vault will stake SushiSwap LP tokens (similar to the UNI yVaults) and sell the farmed SUSHI for more of the underlying LP token.

Odds and Ends

• While Keep3r Network is not a Yearn product, that does not mean that it won’t be used by Yearn. Yearn developers have already deployed contracts to utilize the Keep3r Network for harvest calls on several yVaults.
• An audit (of Yearn’s v1 products) recently performed by MixBytes() was uploaded to Yearn’s GitHub repo and found no major issues. You can find this audit here.
• In less than four months, Yearn’s 13 v1 yVaults have utilized 44 different strategies.
• Yearn developer Banteg maintains an up-to-date list of test vaults here.
• Yearn’s first v2 audit is underway. Furthermore, Yearn is in the process of finalizing payment with a second auditing firm as well.
• A developer UI is in the works which will display all of Yearn’s test yVaults.

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: 10.28%

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: 9.99%

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: 12.17%

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: 4.70%

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: 8.15%

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: 7.34%

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: 3.38%

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: 5.60%

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: 4.95%

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: 0.71%

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: 2.92%

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 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