gro Docs
Search…
Yield generation
Yields in DeFi (and strategies in Gro Protocol) typically come from three different sources: lending income, trading fees from automated market making, and protocol incentives.

Lending income

Lending platforms, such as Compound, pay users for locking their assets into a smart contract. Borrowers can use these funds, at interests, a portion of which is paid to the lenders. Lending and borrowing is governed by smart contracts and loans are over-collateralized (en lieu of something like a credit score) to minimize risk for the lender. There are mechanisms in place so that if the value of the debt exceeds a certain proportion (e.g. 85%) of the value of the collateral, the collateral automatically gets liquidated to pay off the debt.

Trading fees from automated marketing making

Automatic market makers (AMMs) are liquidity pools that facilitate arbitrage between two or more assets and enable traders to exchange their assets. This activity generates fees which go back to those who have provided the funds.
The price of each asset relative to the other is inversely related to the comparative liquidity. If the liquidity pool contains more of one asset than another, that asset will be cheaper relative to the other. Users can contribute to liquidity and earn interest on their capital through the trading fees fees. Common AMMs include Uniswap and Curve.

Protocol incentives

Some protocols provide incentives for providing liquidity, often in the form of governance tokens or so-called LP tokens. These tokens, in turn, can be locked into yield farms, which reward users with more of the same token or with a different token. There is also often an external market for governance or LP tokens which can be quite profitable. Compound, for example, rewards liquidity providers with its governance token COMP. There are pools for COMP as well as a thriving market.

Gro Protocol yields

Gro Protocol generates yield from above sources using a fork of Yearn v2 Vaults and strategies. The protocol has a total of 4 Yearn vaults and 7 strategies.
Each of the three major stablecoins (USDT, USDC, DAI) is assigned a yVault, each with a primary and a secondary strategy. In addition there is a 4th yVault for the Curve 3pool token with a single strategy attached. All of these strategies and yVaults ladder up and aggregate into the same user level products: Gro Vault and PWRD.
Lender / CREAM Strategy
This strategy lends stablecoins on various lending platforms such as CREAM, Aave, or Alpha Homora to gain yield.
Idle Finance / COMP farming Strategy
This strategy supplies stablecoins on IDLE.finance to farm COMP and IDLE. Rewards are harvested, sold for more stablecoins, and compounded in the Vault.
Curve 3pool/3CRV Strategy
We provide liquidity to the Curve 3pool strategy to earn yields. As there is a withdrawal fee on these funds, we withdraw from this strategy only when necessary. This strategy LPs the 3CRV token into the Curve metapool with highest yield and then deposits that metapool token into the corresponding Yearn v2 Vault.
You can see the individual strategies in the Contract Addresses section.
Last modified 2mo ago
Copy link