Value Multistables Vault
Summary
- New MultiStables Vault of ValueDeFi could absorb 100mil$ TVL with only 14% decrease in profit, an 34% improvement over other vaults.
- Auto-reinvest feature is included to squeeze out maximum additional yield
- Multiple strategies are calculated in real-time
- VALUE incentive based on TVL to ensure high and fair APY for everyone.
Motivation
One of the biggest hurdles in the vault industry is maintaining APY as the value of assets in the vaults increases. It’s hardly a problem when the equivalent of a few million dollars are deposited in a vault, but when funds increase, the return generally suffers.
For example, assuming you are a strategist of a vault with $10 million in stablecoins, you could explore the y-pool strategy at Curve, one of the most successful pools for stablecoins in the space. It has currently $161 million in TVL, and at the current CRV price of about 0.5$, the APY of LPs at the pool is 13.99%. Assume you want to direct all of your vault funds to the y-pool, so the TVL of the y-pool will increase to $171 million. If the CRV price doesn’t increase (which is very likely), the APY of the y-pool will decrease to 13.17%, an APY drop of 0.82%, or a decrease of rewards by 6%. If instead you had $100 million in stablecoins that you deposit into the y-pool, you will observe that the APY will plummet to 7.31%, an almost 38% decrease of reward.
Currently, all vaults in this industry have the same problem; none of them can absorb high TVL without devastating the yield of farmers.
Solution: Welcome to Value Vaults multiple strategies.
While this may not be the first time you’ve heard of our multiple strategy vaults, we wanted to explain further how they function. It’s simple, yet very effective. Instead of putting all of your eggs in one basket and hurting your own profit because of the dilution effect of large sums of capital, you spread the assets deposited into the vaults across multiple farms.
Take the above example and see how it will improve your return using our multiple strategies. Instead of putting all your capital (10mil$ and 100mil$) into the y-pool, we could spread it into multiple pools at Curve
In the 10mil$ case, we achieved an average APY of 13.65% with multiple strategies instead of an APY of 13.17% with a single vault strategy. This is an improvement of 3.64%.
On the other hand, if we consider the $100 million case, we see a much bigger improvement in the performance of the vault strategy.
As you can see, 11.42 % APY is an improvement of 34% over the previous 8.73% APY.
Note: This multiple strategies tech is already available with our current UNI LP vaults, but we simply miss the right targets to show its effectivity.
The multiple strategies are calculated in real-time to ensure the best investment for vault depositors.
Together with the Auto-Reinvest feature of our new vaults, we are able to squeeze out the additional yield from your funds. Instead of doing all these steps manually with a lot of time consuming and high gas cost (calculating best strategies to invest, splitting funds to multiple sources, claiming all of the profits manually and re-invest again). Just deposit and let us take care of everything else, you only need to watch your profit growing.
In order to attract depositors at the beginning phase, we add an extra incentive for the multistables vault proportional with the TVL. At start, the incentive will be 0.2 VALUE per block for the first 10mil$ TVL. If the TVL increases, the incentive amount will increase as well. Maximum incentive amount is 1 VALUE per block. Estimated extra incentive APY from VALUE is around 20% extra.
Multistable vaults will be open at 11am UTC 11-Nov-2020 and the incentive will start at block
