The purpose of the yVaults program is to enable the community to build and use the most efficient yield farming robots produced by the best strategists of the industry quickly and safely. yVaults have a withdrawal fee of 0.3% and an additional yield fee of 3% in comparison with the old Yearn if the harvest() function is called. Individual income are divided on a pro-rata basis, calculated by the share contributed by each depositor to the pool.
There are nine yVaults: 1. ETH/WETH 2. yLand 3. yDAI+yUSDC+yUSDT+yTUSD (yCRV) 4. crvBUSD 5. crvBTC 6. DAI 7. TUSD 8. USDC 9. USDT
The tokens mentioned above are deposited in their respective yVaults and used for farm yielding using current market opportunities.
A Controller establishes and manages the yVaults, who controls the implementation of the strategy. Profits created from each yVault are used in each yVault to purchase more of the underlying asset; thus, the yVaults are an ongoing buy-and-hold strategy.
The Controller uses ETH as leverage and mints DAI to open a Colleratlized Debt Position (CDP) at MakerDAO. The DAI shall be deposited into the yDAI. The collateralization ratio — a financial leverage measure — is often aimed at at least 200 %. If the ratio dropped below 200 %, automated bots regularly pay down the DAI debt. The DAI is redeemed from Curve and is not (i.e., yDAI is burned and redeemed for DAI) bought from the open market. Excess DAI from yield farming is used to buy additional ETH which is deposited in the yETH.
As part of the deleagated yVault commodity, volatile assets may also participate in yield farming strategies. There is currently only one YVaults delegate: aLINK. Profits created by the delegated yVault will be used to buy more of the underlying asset. Representing a constant buy-and-hold policy once again. After a 0.3 % withdrawal fee, depositors can withdraw their initial deposits and accumulated gains, if any, at any time.
The controller is depositing LINK into AAVE, borrowing stablecoins. The initial health factor of these loans is always above 4, and if the health factor drops below 4 at any point the controller repays a portion of the debt to hold a health factor above 4. The borrowed stablecoins (e.g., USDC, DAI, USDT, etc.) depend on the Controller's chosen strategy. The controller will deposit them into one of the yVaults described above after receiving stablecoins.