crvUSD Yield Master
crvUSD Yield Master strategy description.
Overview
The fija crvUSD Yield Master utilizes US-Dollar based stablecoins to provide liquidity on the decentralized exchange Curve and further uses the yield optimizer Convex to boost profitability. Additionally, the strategy incorporates automated rebalancing and safety mechanisms to ensure optimized yields and maximum security of the investment.
Blockchain: Ethereum Mainnet
Deposit Currency: crvUSD
Tokens used: crvUSD, USDT, USDC
Protocols used: Curve & Convex
fija Safety Score: 7.8/10
Strategy Description
The fija crvUSD Yield Master is a strategy based on stablecoins that track the value of the US-Dollar.
Liquidity providing on Curve:
This strategy provides liquidity in the form of crvUSD on the decentralized exchange Curve. On Curve, crypto owners can exchange their coins for other currencies. To enable the exchange, Curve holds liquidity on both sides of a currency pair. This liquidity is provided by users as a liquidity position. This is also the case with the „fija crvUSD Yield Mastery“: Liquidity positions are formed with the contributed crvUSD, thus enabling trading on Curve. As proof of the deposit, the strategy contract receives so-called "liquidity pool tokens" (LP tokens).
For providing liquidity, the strategy contract receives a share of the trading fees earned on the platform. In addition, the Curve platform issues its own tokens (CRV tokens) as an incentive. The strategy builds two liquidity positions. One with the USD stablecoin pair crvUSD - USDT and the other in a pool crvUSD - USDC.
Used Tokens:
USDC: USD stablecoin of the Circle platform. USDC is backed 1:1 by US-Dollar denominated assets in Circle’s reserves. USDT: USD stablecoin of the Tether platform. USDT is backed 1:1 by US-Dollar denominated assets in the Tether’s reserves.
crvUSD: USD stablecoin of the Curve Protocol. crvUSD is an “over-collateralized” stablecoin for which at least 100% of the value in cryptocurrencies (e.g. BTC or ETH) must be deposited for each crvUSD.
LP staking on Convex:
To further increase profitability, the LP tokens received are staked on the platform Convex. For staking on Convex, the strategy contract receives CVX tokens as rewards. The CVX and CRV tokens received are reinvested into the initial USD stablecoin position upon receipt.
Risk Management & Optimization:
The strategy has a rebalancing mechanism that adjusts the allocation between the liquidity positions every 90 days to optimize the return. The strategy also utilizes two safety mechanisms that trigger an exit of the strategy once activated. The first mechanism triggers once one of the USD stablecoins loses its peg by more than 2% & the second triggers once the exposure in each of the pools rises above 15% of the respective total pool TVL.
Last updated