1000% APYs were never sustainable...
There are two main ways to juice DeFi yields in a more sustainable way than pumping a gov token with thin float.
There are two main ways to juice DeFi yields in a more sustainable way than pumping a gov token with thin float.
1/ The quickly scalable way is leverage.
You borrow from @AaveAave or @compoundfinance then farm with a @iearnfinance vault or directly as an LP to AMM farms.
Or you let @AlphaFinanceLab take care of it for you in one tx.
You borrow from @AaveAave or @compoundfinance then farm with a @iearnfinance vault or directly as an LP to AMM farms.
Or you let @AlphaFinanceLab take care of it for you in one tx.
2/ Risk here is your impermanent loss is amplified if you’re an AMM LP.
Could imagine some packaged product in the future that helps you hedge against this but it’s not easy.
Could imagine some packaged product in the future that helps you hedge against this but it’s not easy.
3/ The other way is using tranches. Transferring risk and reward from one tranche to another is quite commonplace in tradfi.
@saffronfinance_ is the only product live with this.
@saffronfinance_ is the only product live with this.
4/ You can lend out DAI on Saffron on its senior or junior tranche.
Senior gets lower APY but if platform fails they are backstopped by junior. Junior gets a cut of senior’s APY but need to stake $SFI.
Senior gets lower APY but if platform fails they are backstopped by junior. Junior gets a cut of senior’s APY but need to stake $SFI.
5/ Risk for junior tranche is if platform fails or if a fixed rate is promised to senior tranche but market rate is below, junior tranche needs to remunerate the senior.
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