This strategy involves MakerDAO plus either Aave or Compound. This strategy operates as follows:
- 1.The pooled asset is deposited to a Maker vault as collateral;
- 2.DAI loans are taken out against the collateral;
- 3.DAI is deposited to Aave or Compound, where it generates yield;
- 4.The yield is withdrawn and either
- Swapped on the open market back for the deposit asset, or
- Redeposited to Aave/Compound for compounding returns
This strategy is medium-risk. It can be deployed as either aggressive or conservative, depending on the low-water and high-water collateralization benchmarks. Conservative pools use a low water mark of 250% and high water mark of 275%.