Proposal 37: YLA Vaults composition update

Summary

  1. Update YLA composition: replace the existing set of Vaults (3crv, yCRV, crvGUSD, crvCOMP, crvYBUSD) with another one with a bigger APY (crvBUSD, crvUSDP, crvLUSD, crvALUSD).
  2. Enable tech for automatic Vaults rebalancing (already audited)
  3. Allow the team to add or remove stablecoin Yearn Vaults to YLA in the future for keeping basket up to date taking into account new Yearn products

Motivation
YLA was initially designed to maximize APY generated by a set of Yearn Vaults. It executes the “fund of funds” strategy, widely used in traditional finance.

The main value proposition for users is exposure to a diversified basket of high-yield stablecoin Yearn Vaults which is up to date with recent Yearn developments and market situation, reflected in APY. Therefore, the basket should be actively maintained based on the profitability of all stablecoin Vaults in Yearn ecosystem. The initial set of Vaults and their weights were based on TVL/APY at the moment of launch. Now it is obvious that this set is a bit outdated and there are much better options for YLA users.

The ability to change the set of Vaults (limited to Yearn stablecoins Vaults) without additional proposals for every case is important since it allows automatic rebalancing and adding new Vaults to a set if there will be new tech releases from Yearn side.

Specifications
Update composition: replace the current set (3crv, yCRV, crvGUSD, crvCOMP, crvYBUSD) with another one with a bigger APY: crvBUSD, crvUSDP, crvLUSD, crvALUSD.

An initial composition based on TVL-calculated shares:
Name: TVL | share in the basket | APY normalized on weight
crvALUSD: $70.7m | 0.37 | 9.29% APY
crvUSDP: $66.4m | 0.347 | 7.91% APY
crvLUSD: $42.4m | 0.222 | 5.49% APY
crvBUSD: $11.8m | 0.061 | 0.97% APY
sum: $191.3m | 1 | total basket 23.66% APY

Automatically update the composition of this pool in the future by means of YearnVaultInstantRebindStrategy.sol, pursuing a goal for maximizing APY for YLA LPs.
The audit for pool rebalancing tech will be added here.

2 Likes

What is the rule for #2 and what are the eligibility criteria for #3?

Is the concept to take the top APY subject to constraint that TVL is in the top x?

For instance, the USDN pool is quite big at $117 million and has a juicy yield, so might be a choice, but perhaps we might have doubts about USDN given the recent short-term depegs. Is that the reason for the exclusion?

Overall this enhancement makes the product a lot more attractive and competitive, especially combined with the Zap feature and the fact that there’s no gas costs for compounding.

How will the technology work for the rebalancing tech? Have you examined the latest Belt bungle which was apparently related to some auto rebalancing and was using wrong data for their oracle that meant they were subject to a flash loan + manipulation of the underlying pool’s value by imbalancing it + entry/exit into the Belt pool that was above it? There was a pretty good writeup on Twitter by a security researcher, but I can’t immediately find it.

totally support the proposal, as there is no exit fees for v2 vaults, the a non brainer, that we need two chase the maximum APY.

USDN APY looks juicy, indeed. I had some concerns about it origin and de-pegging from $1. However, TVL in Yearn Vault is an indicator that cannot be ignored

the voting is live on snapshot :point_down:
https://snapshot.powerpool.finance/#/powerpool/proposal/QmVTNGv84XXwtHdTsSP9xZdbTRpKBmFrAKJGrTE1a2VTps

Does it have to be USD stablecoins per-se?

For example, CRVEURS has a really good return and is a stablecoin, has good growth and EURS (Stasis Euro stablecoin) has in 3 years not lost it’s peg.

Adding a EUR stablecoin to a USD basket could potentially make it even more interesting as their underlying exchange rates merge a bit. For international users that are non-us residents, this gives them exposure to their native token as well, decreasing USD-EUR exchange rates.

Just a question / suggestion, might be worth to consider sometime, or add like 5% of total allocation to a non-usd coin that has always had great returns on Curve as it gets a lot of the allocation votes each week.

sounds pretty good to me, on top of that EUR was outperforming USD globally lately.

Hello guys!

Yesterday we received final audit report, re-checked proposal text and found out that there is the typo in a Snapshot proposal. We have two different set of Yearn Vaults here: [crvBUSD, crvUSDP, crvLUSD, crvUSDN] vs [crvALUSD, crvUSDP, crvLUSD, crvBUSD]:

https://snapshot.powerpool.finance/#/powerpool/proposal/QmVTNGv84XXwtHdTsSP9xZdbTRpKBmFrAKJGrTE1a2VTps

@vasilysumanov we cannot deploy new Vaults composition without final decision from the community.
Please re-launch this proposal, and only when we will have unequivocal Vaults composition approved by CVP holders we will be happy to deploy it!

1 Like

oh, great catch by the team. Hope @vasilysumanov will relaunch the proposal soon and we finally have YLA with juicy APYs