Overview
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Based on the initial set-up of the Best Yield (OG) strategy, aggregating and optimizing Aave and Compound lending markets, today there are two types of Best Yield strategies:
- 1.Senior Best Yield: aggregating the over-collateralized, top-tier lending protocols Aave, Compound and the Idle Senior Perpetual Yield Tranches maintaining a conservative risk profile while extending and improving the yield spectrum.
- 2.Junior Best Yield: aggregating multiple Idle Junior Perpetual Yield Tranches on a single asset as underlying to create a new tier of risk in Best Yield, allowing to automate an aggressive approach and offer significantly higher APYs.
The Best Yield strategies constantly monitor interest rates on various DeFi yield sources to ensure the current allocation is yielding the best aggregate interest rate available on the market.
Users' funds are pooled together and programmatically deposited into one or more of the available lending protocols.
By analyzing supply rate functions across integrated platforms and total funds in the pool, the strategy is able to constantly rebalance capital across any number of protocols to earn the highest interest rate possible with very high precision.
When users deposit funds, they receive
idleTokens from Idle in exchange. idleTokens are ERC-20 tokens that can be redeemed for their underlying assets at any time. As interest accrues to the assets supplied, idleTokens are redeemable at an exchange rate (relative to the underlying asset) that constantly increases over time, based on the interest earned by the underlying asset.Best Yield strategies maximise the current aggregated interest rate, modelled as follows
where
n is the number of lending protocols used, x_i is the amount (in underlying) allocated in the protocol i , nextRate(x_i) is a function that returns the new APR for protocol i after supplying x_i amount of underlying and is tot the totalCurrently, the Best Yield strategies are available on Ethereum and Polygon blockchains. Each network has a different basket of assets available in the pools.
Idle DAO has established a series of Integration Standard Requirements required to implement a new yield source or an asset in the Best Yield strategy.
- A superior optimisation algorithm for automatic management of users' funds;
- Gas fees savings for funds rebalance (which the user would have to pay to deposit funds/interact from one platform to another);
- Participating in the $IDLE liquidity mining program and leveraging all the advantages linked to its multiple use cases;
- By depositing into BY pools users can get other underlying governance tokens as a form of incentives (e.g. COMP or AAVE);
- For integrators, no need to stitch together disparate protocols or spend months integrating and updating yield functionality.
Last modified 15d ago