Best Yield
This strategy allows you to get the best interest rate on the market, by investing in a single token.
The Best Yield strategy is a lending aggregator that aims to achieve the highest yield for supported digital assets at all times. It does this by programmatically allocating these assets across several lending protocols operating on the Ethereum and Polygon blockchain. Best Yield benefits users by socializing gas costs, automating the yield generation and rebalancing process, and automatically shifting capital as opportunities arise. End users and integrators also do not need to have proficient knowledge of the underlying protocols involved or DeFi. The strategy has been battle-tested since mid-2019, and it’s considered one of the most resilient in the entire DeFi space.
Users' funds are pooled together in the main contract (one for each token supported by Idle) in order to minimize gas paid for reallocating funds and provide, at the same time, the highest aggregated interest rate for all pooled funds.
Interest rates are constantly monitored off-chain. The exact allocations are calculated for pooled funds in order to maximize aggregated APY and if current allocations are different from the newly calculated one, new allocations get submitted to the contract and the pool gets rebalanced.
Hence, by buying and holding IdleTokens, users' underlying position will be dynamically rebalanced when the best rate changes, in order to always give back the most profitable return.

Problem modelization

With this strategy we are maximizing the current aggregated interest rate, this can be modeled as follows:
maxΒ q(x)=βˆ‘i=0nxitotβˆ—nextRatei(xi)max\ q(x)= \sum_{i=0}^{n} \frac{x_i}{tot} * nextRate_i(x_i)
where n is the number of lending protocols used, x_i is the amount (in underlying) allocated in 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 total amount to rebalance
tot=βˆ‘i=0nxitot=\sum_{i=0}^{n} x_i
Last modified 15d ago
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