Value Vaults
Summary
(1) We are excited to announce the release of our Value Vaults, the most advanced yield-farming aggregators and strategy deployers available today in the DeFi space
(2) Value Vaults are focused on returning maximum benefit back to depositors by minimizing gas costs and not any taking platform fees
(3) These vaults will be released in three phases, each which will expand the functionality of the vaults and flexibility in underlying single-asset and LP-pair deployment
Motivation
When we first started coding Value Vaults as an improvement to Andre’s delegate vault, the concept was easy. SUSHI did not exist back then and yield farming was simple: “allocate funds to the project with the highest APY” — one type of controller, one strategy, one type of fund.
With the rise of SUSHI, we experienced the explosion of a new type of asset that could be staked: liquidity provider tokens, aka UNIv2 token or SLP tokens (although, in practice, this is not much different than staking balancer pool tokens).
Inspired by this new type of staking, we changed our strategies and implemented our Value Vaults with a flexible ratio and multiple controllers, thus farming both SUSHI and UNI will be possible using single-asset fund vaults. While this requires a bit more time to code and to test out our strategies as well as to obtain an audit, the markets do not wait (especially as many other yield farming aggregation protocols are launching their products without proper audits). As such, we have decided to gradually release our Value Vaults in three separate phases.
Value Vaults Phase 1 : Public beta, single controller, one type of fund
Value Vaults at this stage will cap the maximum capital to each single vault at 10mil$. We will open these 3 types of staking options (subject to change):
- WETH
- ETH-USDC UNIv2 LP token
- ETH-WBTC UNIv2 LP token
Imagine a farmer who was farming a particular project with his ETH-USDC UNIv2 LP tokens and wanted to rotate his crops to farm UNI. At the highest gas price peaks (1000 gwei+), he would spend a minimum of $200 to exit his current farming yield to participate in farming UNI. With an average APY of 50% for UNI, he would need 15 days to recover the cost with $10K of capital.
With this in mind, it makes sense to join a farming co-operative like Value Vaults, which deliver massive gas cost savings (the farmer only needs to pay for deposit and withdrawal). We even support Chi token integration on all the protocols at a smart contract level, meaning our depositors will save more than half of the gas price if they have the Chi tokens in their wallets. Value Vaults will automatically allocate its AUM to find the highest yielding tokens on your behalf and distribute the profits to you.
Profit Calculation:
Value Vaults will calculate all profits for depositors; users can simply watch their portfolios grow. The community has previously voted to share 6.7% of all the profits of the Value Vaults with Governance Vault Stakers. After gas costs and this profit share, the remaining 93.3% of Value Vault profits will be distributed to depositors. Unlike other vault products on the market, the YFV protocol will take no fees. For example, a deposit of 10 WETH into the WETH vault that generates 10% profit over a certain time period will result in a distribution of 10.933 WETH back to the depositor’s wallet upon withdrawal.
For LP-pair vaults (for example ETH-USDC UNIv2 LP token), the calculations are more complex but result in the accumulation of additional LP tokens instead.
For participants of the beta Value vaults, we will also establish a VALUE incentive program.
The incentive reward will start at block 10916000 (https://etherscan.io/block/countdown/10916000) and end at block 11000000 (https://etherscan.io/block/countdown/11000000).
Each vault will receive 0.167 VALUE per block during this time period (2–3 days), and 0.1 VALUE/block for 10 days after Value Liquid incentive pools launch..
Value Vaults Phase 2 : Release Candidate, Single Controller, Multiple Strategies, Flexible Asset Deposits
Our Phase 2 release of our Value Vaults will include the exciting flexibility for LP token conversions on the fly for the convenience of our depositors and for rapid deployment of assets to more profitable yield opportunities.
Many yield farming opportunities provide high APY but are not capable of absorbing much liquidity. Our value vaults have implemented multiple strategies that are capable of precisely allocating capital such that we can both capture and preserve those returns, maximizing profit and efficiency for our depositors.
For instance, conversions between ETH-USDC to ETH-USDT or other LP pairs with lowest possible slippage will be done automatically to take advantage of better opportunities.
Value Vaults will accept funds in SLP, UNIv2 LP, BPT, and VLP (Value Liquid Provider) pool ownership tokens.
Value Vaults Phase 3 : Final, Multiple Controller, Multiple Strategies, Single Asset to LP Flexibility
The “final form” of our Value Vaults will be yet another flexibility and quality-of-life upgrade that will bridge single-asset deposits with LP pairs.
When our multiple controller implementation is ready, we will be able to utilize funds in single-asset vaults to provide liquidity for LP pairs when necessary to further optimize yield. For instance, USDC and WETH in single-asset vaults will be algorithmically combined into USDC-WETH liquidity pairs across SLP, VLP, UNIv2, etc. as opportunities arise. Further details about this phase will be released closer to its launch date.
For the more technically-minded, feel free to check out what we’ve published on our public github. We are excited for our community to try out these vaults and are pleased to offer yet another cutting-edge innovation to the world of decentralized finance.
