Overview of Vesper Strategies
Through strategies, Vesper Pools interface with a number of different protocols and perform a handful of different interactions at those protocols. Each Vesper strategy represents some combination of interactions across various DeFi platforms. These platforms include, but are not limited to, MakerDAO, Aave, Compound, and Yearn. Vesper users do not select strategies, rather, they select pools. The pool's internal logic determines which strategies it employs.
Each strategy is differentiated by, among other things:
Deposit asset (that is, the token you can deposit into the pool, such as ETH, wBTC, etc.)
Contract risk level
Susceptibility to realized losses
Categories of Strategies
At a minimum, in every pool TVL is deposited or swapped into a protocol. Beyond that, the position may be used as collateral or staked for additional yield. These strategies include:
<Platform> Deposit
This is the most basic strategy of simply depositing a particular protocol.
<Platform> LP
Unlike a straight deposit, pool TVL is converted into the platform’s pertinent liquidity provision (LP) token.
<Platform> to <Platform>
After depositing to a platform, the output of that deposit is then deposited to another platform.
<Platform> Leverage
Pool TVL is deposited to a platform where it is used as collateral to borrow the same token, to redeposit over and over, “leveraging” up the assets contributed to the platform versus the strategy’s initial deposit.
<Platform> Borrow
Deposits to a platform are utilized as collateral to borrow a different token. That token is then routed through the corresponding Vesper pool for that token where it is routed through that pool’s strategies.
Vesper Proxy
This is an Earn Pool-specific strategy that routes Earn deposits to the corresponding Vesper Grow pool to handle those deposits.
A representative mapping of strategies to protocols appears below. Keep in mind that the available strategies on any platform are subject to change and are regularly updated.
| Platform | Deposit | LP | Platform | Leverage | Borrow |
|---|---|---|---|---|---|
Maker | |||||
Compound v2 | |||||
Compound v3 | |||||
Aave v2 | |||||
Aave v3 | |||||
Curve | |||||
Convex for Curve | |||||
Convex for Frax | |||||
Yearn | |||||
Stargate | |||||
Sommelier Finance | |||||
Morpho | |||||
BenQi | |||||
Trader Joe | |||||
Sonne Finance | |||||
FraxLend |
Strategies are classed as medium-risk or higher-risk. The risk level reflects the level of safety with regards to the underlying contract interactions. Medium-risk strategies have fewer interactions with safer, audited platforms. (These strategies are considered 'medium' rather than 'low' risk because nothing within the cryptocurrency or DeFi category is truly low-risk.) Higher-risk alternatives may reflect a higher number or more complex interactions as well as exposure to unaudited contracts.
Pools are classed as Conservative or Aggressive depending on their likelihood of realizing losses. This primarily refers to the susceptibility of outstanding loans to liquidation. Conservative pools employ strategies which use higher collateral ratios on loans to better protect against 'black swan' events that can jeopardize the loan.
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