Proposal discussion: AAVE Super Saver Vault

Disclaimer: this proposal is only the initial draft for community discussion.

Rationale

The yield earning capability of pie vaults has never really been fully capitalized on (DeFi++ currently is earning 1.5% yield). The narrative amongst DeFi users is “productive” assets. PieDAO is lightyears ahead of other index offerings in this space. We should press the advantage by creating an attractive, safe (by DeFi standards) and high yielding vault.

The AAVE Super Saver (AASS) would be an approx 10.8% APY yielding investment product with a healthy mix of stables and appreciative assets. The index would be composed of all available assets on AAVE on Polygon. A yield earning index token that abstracts away lending, swapping etc… and just provides the user with a token they can buy and comfortably know they can expect 10%+ yield for the coming months is a highly mass market friendly asset. This would also be a highly attractive option to create farming pairs on Quickswap. If we could get Quickswap rewards on board, then the farmer would be receiving 10% APY + Quickswap APY. Tasty!

PieDAO is currently being outmanoeuvred by other index products which have setup shop on Polygon and are enjoying the benefits of the monetary velocity that network has achieved.

Strategy:

All assets are lent, the assets earned from lending are automatically relent on regular intervals (hourly?). The wMATIC earned from lending would be swapped, divided into the assets evenly and relent.

Details

Smart-contract: PieVault
Rebalance: Daily? Weekly?
Cap: Unlimited
Strategies: See “strategy”

Open questions

  • wMatic rewards will potentially expire April 2022, the yield from the index might roughly halve at that point, is this a risk worth taking?
  • How much effort in development is involved in these interactions?
  • Is there better concepts, like for example weighting better APY assets on AAVE with a higher weight?
  • Is PieDAO interested in going in this direction of a highly branded product which is focused more on yield then a category thesis?
5 Likes

How about Sushi swap ? When does their wMATIC awards end?

Disclaimer: I’m very new to DeFi, so take my opinions with a grain of salt.

I believe that’s a great idea! I’m personally to lazy for figuring out the best options for yield farming and micromanaging everything. I guess there are many others that are in a similar situation. Also, if all these transactions are “encapsulated” in a single token that just sits in your wallet it could potentially be much less hassle tax wise.

How about expanding the scope to potentially include more/other protocols, if those become more attractive that AAVE/Quickswap or just to diversify?

Concerning wMatic rewards: April 2022 seems a long way off in DeFi, it’s hard to tell what has happened until then, but I guess that’s one more argument for expanding the scope to be able to react to developments.

2 Likes

Idea here is for super safe lending. Are you referring to Kashi? If not it would be LP provision on Sushi and inherently more risky then lending a single asset. Curve might also offer opportunities, however the thing with AAVE is it’s the gold standard DeFi “bank”. This should really be a high yield saving account that people don’t have to think very hard about when they buy.

2 Likes

Okay I guess AAVE makes sense. Also it’s on polygon so I’m super in favour of it.
( maybe an super Dave gotchi maybe😉)

IMO the most useful service a super saver vault could provide on an L2 where gas is cheap and diversifying itself isn’t very expensive, would be to wrap the bridging of underlying assets farming on L1.

SNX, BAL, xSUSHI, (MKR, though no volume) are tokens which don’t exist on matic at present, but do exist in AAVE. Likewise, Compound Finance offers return on COMP which is not available on Polygon.

Even tokens which exist on both can be useful in order to arb return rates between networks.

I’d love to see a super saver vault farming internally on L1 with an external yield layer on L2 incentivizing bridging assets over to Polygon. This makes us less dependent on Matic yields, and can create a distinct product not otherwise accessible on that layer.

This would require active market making and potentially like we had with Loopring order book mining, we could do similar for market makers arbing the chains. May also be a way to leverage our relation with Wintermute.

2 Likes

That will be the first cross-chain portfolio pie isn’t it ? This sounds really interesting frankly. The remaining question is how to make it happen.