Safe Dollar Yield
Diversify stablecoins across different lending protocols
Safe Dollar Yield is a risk-adjusted return strategy that diversifies stablecoins across different lending protocols to earn yield.
This strategy is built with a few principles in mind:
- 1.Principal protected – Risk management measures (including auto-risk off) are implemented that prioritize safety.
- 2.Risk-adjusted yield – Vault autonomously rebalances across different lending markets to optimize returns.
- 3.Realtime – Users can seamlessly enable, disable, and update the strategy at any time.
When stablecoins are deposited into Fennec Stash Vault, users can enable or disable Safe Dollar Yield Strategies. When enabled, stablecoins are forwarded to a diversified set of yield-earning sources. As the conditions of the market changes, the contract rebalances between sources to optimize the yield earned.
Stablecoins are diversified and staked across lending protocols currently includes AAVE, Compound. Initially stablecoins are diversified across USDC, DAI, and USDT.
Rebalance takes place under the following conditions:
- 1.Changes in relative Utilization Ratio AND liquidity.
- 2.Alternative pool(s) APY difference based on a mean-average reaches more than 1% of the existing pool, covering the period of 3 months.
- 3.Previous intra-strategy level rebalance took place over 90 days prior.
- 4.Capital in the existing pool experiences risks that cross a predetermined threshold.
Stablecoins and DeFi protocols must satisfy the following inclusion criteria to be considered for the Safe Dollar Yield strategy.
- Smart Contract
- Audited by reputable auditing firms or consultants.
- Demonstrated significant TVL and lived on Ethereum mainnet for at least 6 months.
- Contract level upgrades or parameter changes by a centralized party requires thorough documentation and process.
- Liquid on DEX (with sufficient volume to support vault size) or easily exchangeable into spot assets through protocol withdrawals.
- The Loan to Value (LTV) ratio must remain withdraw-able by the vault
- Alerts will be triggered if there are large changes of LTV over a 30 days average window, large movement (particularly withdrawal) from a pool, or significant changes in TVL is detected.
- Assets: no capital will be borrowed against the underlying assets and therefore will not expose token holders to credit risks.
- Protocols: borrowing and lending protocols to satisfy inclusion criteria must be exclusively on-chain
- Custody of the assets must not be held by a trusted third party aside from stable coin issuers