YAXIS - Betterment for yield farming

YAXIS - Betterment for yield farming

. 3 min read

There has never been a better time crypto investing than now. Gone are the days from 2017 where you ape into a random shitcoin and it either goes 100x or -99.9% down to oblivion. In fact, with a few hundred thousand dollars you can easily earn a decent enough salary to live on.

2020 is the year of yield farming. Take your dollar equivalent stablecoin, deposit it into a smart contract and after a period of time, more dollars magically appear. YFI was the first protocol to offer this and has seen hundreds of millions flow into its smart contract coffers chasing sweet, sweet yield. Yield rates have consistently been in the double digits since inception for YFI and it was only natural that other competitors would try to displace them.

Unfortunately, you can't fork brains and from the hundreds of YFI forks, only a few (YFII, YFL, YFV) have really been able to hang on. Part of the problem is that the strategies are transparent, open, and auditable, making it easy for anyone to copy it, but harder to attract new liquidity. Liquidity for yield farming always tends to flow into what is already deep and liquid, providing for lower fees and greater ability for yield optimization.

Yield farming has been wildly successful, but it has its issues. Lets take a step back and go over how it works first.

Yield farming is a series of automated strategies for a given asset that typically see it provided as liquidity for a protocol in return for governance tokens. These tokens are sold on the open market for the given asset, thus increasing the returns over time.

The first yield farming token was COMP, the governance token for Compound.finance. Suppliers and borrowers earned the token for utilizing the network. This caused a Cambrian explosion in the Defi space, with virtually every other protocol/platform offering some sort of reward for liquidity provision or platform usage. Curve, Uniswap, Balancer, etc.... all provide valuable tokens to their users.

In the beginning the yields were spectacular. The DAI pair on Yearn approached 50% a year, while the SBTC was trending close to 20%. It didn't take long at all for funds and other VC's to see the opportunity here and started to deposit a shed ton of money into these contracts. Yields declined, the farmed governance tokens were sold off depressing prices and crushing yields. Wild swings in yield volatility are still apart of the Yearn strategies.

Enter YAXIS, a "meta strategy yield farming aggregator." In plain language it means that it uses a DAO voting structure to decide our what the best strategy to deploy capital is. The YAXIS token is the method for voting on which high yield strategy to pursue. After voting, capital is deployed through the metavault to the accepted strategy.

A visualization of how capital is deployed through the YAXIS metavault.

YAXIS relies on the underlying yield strategy layer provided by Yearn, APY, pJars and others to maximize yield. It's almost like a fund of funds, that deploys capital into the best preforming fund at the current moment. From their blog "For example, the vault may choose to switch from the DAI yVault to the sCRV pJar by withdrawing DAI from the yVault, converting DAI to sCRV, and depositing sCRV into pJar." I think it's pretty novel and the yields they have been able to achieve are pretty spectacular, topping in the high 30%'s.

A screenshot of the YAXIS homepage. 

The interface is slick, easy to use and allows for deposit of DAI, USDT, USDC or 3CRV tokens. You can also withdraw to any of these three currencies when you want to exit the strategy.

Yaxis token

The Yaxis token is the method for voting on the different strategies that capital is deployed to. Right now its trading at $9.54 (7.7mil market cap) with a TVL of 16 million.

With the recent Metavault audit, I believe more funds should flow in over the next few weeks and I see $100mln TVL on the cards. This should push the price of $YAX up to $40-50.

I will personally be accumulating below $10 and if we get a retest of $5 its my all in point for the position.

Good luck, stay safe and continue to farm that yield.

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