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APY.Finance has developed a robo-advisor that executes complicated yield farming strategies so that users can still have exposure to these highly profitable schemes without the expertise, capital, and necessary attention.
So, you’re reading about the newest DeFi movement that has your Telegram blowing up: yield farming. Awesome, you think to yourself. High reward, high risk (what isn’t in crypto?), and using some of your favorite platforms like Uniswap. How different could it be than liquidity pools? You start to do some more research. Okay, maybe this whole yield farming thing is a lot more complicated than you originally thought. And expensive.
Yes, yield farming is usually all of the above. Expensive, high-risk, challenging, and most enticingly, high reward. Yield farming is the process or combination of lending, borrowing, or adding your crypto into liquidity pools in exchange for fee rewards. Certain maneuvers have proven to be exceptionally profitable, depending on factors such as liquidity and lending rates.
The entire process has morphed into a masochistic game of hunting down the best farming strategies, quickly jumping from pool to pool, shifting from lending one token, borrowing another, and collateralizing yet another. Farmers are ultimately trying to outrun other yield farmers who’ve caught onto their current strategy, which would make their position less valuable. Sounds exhausting, doesn’t it?
Farm yielding isn’t for everyone, to the disgruntlement of many.
For those of us who don’t consider ourselves trading aficionados (and even those who do, but don’t carry the mental capacity and attention to detail required) yield farming is essentially off-limits. APY.Finance is changing that. The project has developed a robo-advisor that executes complicated yield farming strategies so that users can still have exposure to these highly profitable schemes without the expertise, capital, and necessary attention.
APY.Finance members deposit funds into the project’s liquidity pool and are given APT tokens, which represent their share in the pool. This allows users to avoid the issue of conducting multiple (sometimes dozens) of transactions and a hefty gas fee for each farm yielding strategy. After a member’s initial deposit, APY.Finance will then automatically route and re-route the funds to different protocols and processes through smart contracts based on the market and development scene.
The project is able to conduct a single transaction for all tokens in their pool, reducing the cost of gas dramatically as the total value locked (TVL) expands; APY.Finance says it expects to save over a whopping 99% of gas fees as the TVL increases. It provides the best risk-adjusted returns, under-the-hood, in a cost-effective way. Withdrawing from a yield farming strategy, rather than being a series of nightmarish maneuvers, is now a single click. This is the next-generation of layered, high-yield farming, folks.
The project is completely decentralized and community-owned, with users able to propose and vote on any system parameter. But first, APY.Finance has to establish a secure product and platform which means that DeFi experts will initially be in the background, codifying yield farming strategies and monitoring for time-sensitive incidents.
Once the community has enough APY governance token, users will be able to propose and vote on easily verifiable changes within the DeFi landscape. Via public rewards, community initiatives, liquidity mining rewards, and an Initial DEX Offering (IDO), a substantial percentage of APY will be in the hands of the community members.
Later this month, the alpha launch will feature Compound recursive strategies (AKA, lending and borrowing the same asset in order to farm the Compound token, $COMP). Eventually, the platform will integrate other risk pools with varying amounts of exposure to account for a diverse group of crypto investors with varying levels of risk tolerance. This will include popular platforms such as Balancer, Curve.fi, Yearn.finance, and Synthetix.
Projects like APY.Finance are the future of farm yielding and represent an often overlooked aspect of crypto: developing platforms to help the community as a whole gain access to more complicated and influential products that may change the way we think about investing and our own financial capabilities.