Yield strategies
How PWRD & Vault yields are generated
Gro Protocol generates yield using a fork of Yearn v2 Vaults and Convex strategies. Each of the three major stablecoins (USDT, USDC, DAI) is assigned a yVault. All of these strategies and yVaults ladder up and aggregate into the same user level products: Vault and PWRD.
You can see the individual vaults in this Contract Addresses section.
Protocol strategies are subject to change based on DAO governance whitelisting and changes in whitelisted strategies' pool depth & yield. To stay on top of these changes, join our discord or telegram, or subscribe to our EPNS channel.

Whitelisted protocol strategies

Gro DAO voted (find all votes here) on protocol strategies and whitelisted the following strategies that the Risk Balancer could use to allocate funds based on yield and risks.
  1. 1.
    MUSD-3CRV
  2. 2.
    FRAX-3CRV
  3. 3.
  4. 4.
  5. 6.
    FEI-3CRV
  6. 7.
    GUSD-3CRV
  7. 8.
    3CRV
  8. 9.
    Aave Lending
  9. 10.
    Leveraged Compound
  10. 11.
    BUSD-3CRV
  11. 12.
    TUSD-3CRV

Understanding yield strategies

Protocol strategies are examined through a range of factors in our Strategy Framework. This framework is now used as a way to systematically provide data to DAO members and protocol users for your evaluation of the strategies' risks.
Note that the framework takes the data at a particular point in time; as such the outcome may not be applicable if the factors considered materially changed.
Across this framework we cover:
  • Length of time a stablecoin has been live on mainnet: the longer a stablecoin has been around the more time for its code to be examined by hackers
  • Stablecoin market cap: this is a measure of the market’s view of safety (as higher market cap implies more participants trust the coin) and available liquidity
  • Collateral type: this explains how a stablecoin keeps to peg, whether backed by fiat or crypto assets, and whether overcollateralised or fractionally backed
  • Audits & bug bounty: more audits and a higher bug bounty decrease the likelihood of flaws in smart contract code that have not been discovered

Data for whitelisted strategies

See below for data on the whitelisted strategies as at 16th Aug 2022. These data points are primarily relevant for security and therefore for the whitelisting.
Sources: Coingecko (length of time), Defillama stablecoin dashboard (other metrics)
Stablecoins
Length of time
Market cap
Collateral type
USDT
90 months
$67.58b
fiat-backed
USDC
46 months
$52.73b
fiat-backed
DAI
33 months
$6.8b
crypto-backed
FRAX
20 months
$1.43b
algorithmic
GUSD
47 months
$329.05m
fiat-backed
LUSD
16 months
$196.85m
crypto-backed
FEI
17 months
$190.16m
algorithmic
ALUSD
18 months
$185.2m
crypto-backed
OUSD
46 months
$48.37m
crypto-backed
mUSD
26 months
$44.35m
crypto-backed
BUSD
36 months
$18.05b
fiat-backed
TUSD
54 months
$1.26b
fiat-backed

Prioritisation

Implementing all whitelisted strategies at once creates very high gas costs as a share of yield (high double-digit %). For an optimal risk vs yield profile, the below whitelisted strategies are currently used to generate yield. This keeps Vault exposure to any stablecoin at or below 50% even after applying Vault leverage; in doing so, Gro protocol can achieve diversification without spreading liquidity too thin. At a higher protocol TVL then there would need to be a DAO vote to increase this to more strategies.
Prioritisation of whitelisted strategies for deployment is based on Curve pool depth and projected Convex yield. Yield takes a higher weighting; in case of an equal resulted score, the strategy with the higher yield would be prioritised over the other.

Curve pool depth (1x weighting)

  • Pool depth is >5x PWRD and Vault combined TVL = 1
  • Pool depth is >3x PWRD and Vault combined TVL = 2
  • Pool depth is >1x PWRD and Vault combined TVL = 3
  • Pool depth is <1x PWRD and Vault combined TVL should be deprioritised (as it results in a higher liquidity risk at low pool depth relative to Gro protocol TVL)

Convex yield (3x weighting)

  • Force-ranked across all whitelisted strategies

Latest strategy change (22nd August 2022)

  • TUSD-3CRV pool was added to the strategy mix following the conclusion of Vote 19A and Vote 19B. Out of these 2 whitelisted pools, TUSD-3CRV pool was prioritised as it has deeper pool depth and a higher yield on Convex. Please see the table below for more comparison data.
  • Funds that were deployed to LUSD-3CRV strategy is now deployed in TUSD-3CRV pool. For details about withdrawal from the LUSD-3CRV strategy, please see the section here.
As at 22nd August 2022
Strategy
Curve pool depth (22/8/2022)
Convex yield (22/8/2022)
Score and rank (22/8/2022)
alUSD
$96.4m (1)
4.72% (1)
4
mUSD
$38.9m (3)
4.56% (2)
9
FRAX
$993.1mn (1)
3.43% (4)
13
TUSD
$88.0m (1)
2.97% (5)
16
GUSD
$32.8m (3)
2.84% (6)
21
BUSD
$48.9m (2)
2.6% (7)
23
3pool
$974.9m (1)
1.11% (9)
28
LUSD
$54.7m (2)
0.08%* (10)
32
FEI
$1.6m (-)
1.27% (8)
-
OUSD
$11.2m (-)
4.24% (3)
-
*Note: This is due to LUSD -3CRV pool being highly imbalanced, resulting in a sustainably high exchange rate for LUSD against 3CRV that reached close to 1.0307; if and when LUSD returns to peg, it would result in a 2.95% downside which is netted out of the expected yield of 3.03% (based on Convex figures on 22nd August 2022.

Previous strategy changes

9th Aug 2022: LUSD strategy deprioritised and funds withdrawn

LUSD-3CRV pool is highly imbalanced with >90% of the pool in 3CRV, resulting in a high exchange rate of LUSD against 3CRV that reached close to 1.05 yesterday.
This means that if and when LUSD returns to peg, there would be 4.5% downside. Netting out this impact from the projected yield shown on Convex (5.4%) leads to a lower expected yield. This results in de-prioritisation of the LUSD-3CRV strategy among the strategies whitelisted by the DAO.
Funds withdrawn from that strategy are temporarily parked in reserves. More whitelisting options will be proposed; funds was then deployed in w/c 22nd August following DAO decisions on additional strategies.
As at 9th August 2022

Strategy
Curve pool depth (9/8/2022)
Convex yield (9/8/2022)
Score and rank (9/8/2022)
alUSD
$96.8m (1)
7.82% (1)
4
mUSD
$48.4m (3)
5.76% (2)
9
FRAX
$1.1bn (1)
5.18% (3)
10
GUSD
$31.8m (4)
4.16% (4)
16
3pool
$990.3m (1)
1.51% (5)
16
LUSD
$56.1m (3)
0.22%* (7=)
24
FEI
$2.0m (8)
1.09% (6)
26
OUSD
$9.1m (8)
0.22% (7=)
29

29th July 2022: GUSD strategy added to replace OUSD

Gro Vault & PWRD strategies have now replaced OUSD with GUSD following a recent removal of incentives by Origin from the OUSD-3CRV Curve pool.
This resulted in both lower pool depth and lower yield for that strategy, meaning it was automatically de-prioritised vs GUSD-3CRV which scores better on both.
As at 29th July 2022

21st June 2022: OUSD strategy added to PWRD/Vault for diversification

Gro Vault & PWRD strategies have now expanded to include OUSD to further diversify from 4 strategies to 5 strategies given the market turbulence earlier this week.
Strategy
Curve pool depth (20/6/2022)
Convex yield (20/6/2022)
Score and rank (20/6/2022)
FRAX
$1.2bn (1)
5.16% (3)
4 (1=)
alUSD
$69.1m (2)
6.90% (2)
4 (1=)
mUSD
$39.6m (3)
8.52% (1)
4 (1=)
OUSD
$38.3m (4)
3.76% (5)
9 (4=)
LUSD
$30.5m (5)
4.05% (4)
9 (4=)
FEI
$1.3m (6)
1.28% (6)
10 (5)
As at 21st June 2022

Previous strategy selection framework

Before May 2022, the framework was used for benchmarking strategies for selection purposes. Please see the last version of data used according to this framework before the DAO whitelisting process was put in place.
as at 3rd March 2022
For more data on strategies before the above iteration, please see the Medium article below.
Strategy selection framework
Medium

Reminder about Risk

DeFi is still a very new space, and while that's exciting, it comes with risk. Gro Protocol's software helps you access this world, but make sure you do your own research and only supply assets you can afford to lose.
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On this page
Whitelisted protocol strategies
Understanding yield strategies
Data for whitelisted strategies
Prioritisation
Latest strategy change (22nd August 2022)
Previous strategy changes
Previous strategy selection framework