Pain Points of Existing DeFi Yield Aggregators
A new wave of the DeFi mining era is coming as the booming of Algorithmic Stablecoins set in. However, these new projects are generally not investor friendly. The reasons are:
- First off, high APY Yields usually come with high gas fees, as a result half a day of your income will probably go to Ethereum miners.
- DeFi is growing fast. It takes a lot of effort and time to research and learn about new products and concepts even for experienced investors.
- Higher APY might also mean a shorter mining window. If the amount of your capital staked is too low, other investors start to claim their income before you do which means you possibly miss out on the best harvest time to sell your delicious yield.
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The strategies of existing yield aggregation projects such as YFI, YFII and Harvest, are conservative and lag behind the market, resulting in APY Yield not being comparable when yield booming. Traditional DeFi aggregators are not be able to meet the needs of miners in the new DeFi mining cycle, limited by the following pain points:
- Complexity — New strategies are complicated to develop, and switching is not easy. The existing yield aggregator projects have complicated strategy coding, long audit and on-chain testing cycles, and often miss the golden period of new product mining. Currently, the highest yielding projects on the network generally have a mining cycle of about 30 days, with some explosive models taking less than 7 days. The highest yield mined is usually during the first few hours of the first day. These new mining contract codes are usually a small modification of existing mature contracts and have a large amount of money locked up in the contract. Although there is no audit, the risk is relatively small.
- Routing — The conflicts within large harvest processes, slippage, as well as the network fluidity which can’t be considered.
- High gas fees and poor combinability — The current harvesting model requires multiple network transactions per harvest, commission fees are high, and because of the frequent turnover of small currency in the new creation area, the trading path in the contract usually lags behind the market, making the transaction conflict larger, causing loss in profit. Handling fees in order to enter and leave the mine pools are executed uniformly by the official YFII robot, which is triggered only when savings exceed a certain threshold. Fees are deducted from the mining profits to further reduce the fees for ordinary retail investors.
Principle of Design
To address these pain points, we have designed a new generation of aggregator contracts, Codename: YFII Project Apollo. Basically, YFII Apollo is a minimalist aggregator product which focuses on gas-optimization, quick strategy switching, and DeFi composability. Some characteristics of the design are as follows:
- Minimize chain calculations and save user fees. Contract earnings take manual claim models, no longer included in compound interest. The contract only records each user’s current balance, as a deposit and income receipt certificate, not tokenization. It is estimated that at 140 GWEI, the average operation per deposit and or withdrawal will be reduced from $60 to about $7.
- The trading path of farming income is designed as a pluggable mode, reserving interfaces to find the best trading path, and allowing community traders to manually trade in semi-automatic mode. Traders manually convert returns to YFII and return them to the vaults to allow immediate adjustments to be made when a new mine is created and the chain trades are illiquid.
- Handling fees in order to enter and leave the mine pool is executed uniformly by the official YFII bot, which is triggered only when saving exceeds a certain threshold. Fees are deducted from the mining profits to further reduce the fees for ordinary retail investors.
Architecture
YFII Project Apollo is combined with the following modules.
- The Command Module (Controller): instruction Module controls the handover of the lunar Module between different task Modules
- Lunar Module (Vault): Lunar Module Vault Contract, carrying scientific instruments for scientific research.
Mission Module (Strategy): tracking different policies and automatically switching according to real-time on-chain APY.
Autopilot Module (Routing): Optional for finding the best trading path.
Technical terms.
- Mission: strategy.
- Instrument: Underlying asset carried by the vault. Instrument is also a pivot in security assets.
Mineral: Crystal Mine Dividend Target Asset, tentatively YFII.
Roadmap
YFII Project Apollo will be deployed to all EVM-compatible blockchain platforms. It’s been tested on Huobi, Heco and BSC. It is expected to be officially launched in early January.
