How the yield is generated?

Every time someone offers you yield you should ask yourself: “how is that yield being generated?” because if no one can actually tell you how the yield is generated… It’s possible that you are the yield and this most of the times means: Fraud.

We don’t want to go that route and that’s why from day one we will tell you how and where is generated, with all the transparency possible and with a clear disclose of the risk involved.

Reward assets

There are different types of assets in the network but there is one type of asset which is important in our strategy: rewards assets. These assets are distributed to users who engaged in some types of activities, one example is $AQUA which is distributed to users who provide liquidity in the Stellar DEX.

Our strategies provide liquidity into markets where $AQUA is being distributed as a reward (but the good thing about our strategies is that they can work with any asset on the network) and follow a specific strategy.

Types of strategies

  • Simple compound on liquidity pool rewards: This is the safest strategy to follow, vaults following this strategy will deposit funds into liquidity pools which are currently receiving rewards. After a period of time (normally 24hrs) the vault will try to swap any reward asset it holds on balance and it will deposit the result into the pool so it increases the amount of rewards it will receive in the next period.

  • Smart liquidity pool rewards seeker: Rewards in the network are alway moving from pair to pair thanks to the decentralized nature of these protocols. This strategy tries to follow the pool receiving the more rewards from a specified list, this way if one pair stops receiving rewards for a period of time the vault will immediately move its funds to a pool which is getting the rewards and compound there.

  • Highest liquidity pool rewards seeker: Similar to the smart liquidity pool rewards seeker this strategy moves from pool to pool with the only difference that instead of only following a defined list it will follow the highest rewarded pair without taking in consideration the risk in the pair.

  • Full $AQUA farming bot: Aquarius is the biggest protocol for rewarding liquidity providers in the Stellar Network, they offer rewards to liquidity providers who engage in both liquidity pools and in the order book. This strategy combines both a 40% order book and 60% AMM distribution, this will get more rewards but at the same time it will engage on a higher risk so you need to keep in mind that even if the yield is higher… you could lose more in the market.

  • Madness bot: We define risks levels on each strategy we have, and the higher risk level is called madness. The madness bot strategy is the most risky strategy which will return the most insane yield among all others, it combines all others types of strategies but only with pairs which are getting the most rewards. Be careful when using one of these strategies because your could earn a lot… but you could lose it all too.

That’s it?

Yes, that’s exactly how yield is generated. People tend to make you believe all of this is some sort of magic or that is impossible to replicate so they don’t need to reveal their ways to generate yield… We prefer to do things on a different way and believe it or not you can do all of this yourself without the need of using our service nor any other tool… but why not doing it on auto-pilot 😉