What is Yield Yak?
Yield Yak is a DeFi-focused platform that specializes in yield optimization. It auto-compounds rewards to save users time and gas fees.
- Each farm is a pool of deposits from Yield Yak users
- Farms earn reward tokens (like $AVAX)
- Farms reinvest all rewards, compounding everyone’s deposits
All depositors benefit from the high frequency of Yield Yak compounding.
What if I want to get even more leverage?
The answer is composable leverage. A composable leverage protocol amplifies market exposure by leveraging assets and integrating with other protocols for tailored strategies. It involves borrowing against existing assets to magnify gains potentially but also increases the risk of losses. These protocols offer flexibility with risk management utilizing smart contracts and automated algorithms.
Protocols doing that are e.g. DeltaPrime or Gearbox. As Avalanche native protocol, DeltaPrime allows you to enter YieldYak’s pools and strategies on leverage. While these investors risk liquidation if they make bad investments, they can also reap more significant rewards by making sound investments.
YieldYak’s strategies & pools one can tap into:
- AVAX strategy on AAVE
- sAVAX strategy on Platypus
- GLP strategy on GMX
- AVAX-USDC on Pangolin
- AVAX-ETH from Pangolin
- AVAX-USDC from TraderJoe
- AVAX-ETH from TraderJoe
- AVAX-sAVAX from TraderJoe
Redstone securely provides a real-time valuation for tokens from the above 8 pools, allowing other protocols to deploy and monitor liquidity automatically. The more protocols integrate price feeds for Yield Yak derivatives; the more liquidity is deployed into Yield Yak pools.
What role do RedStone Oracles play here?
DeltaPrime needs a specific real-time data price to allow users to use leverage. Without it, the collateral price could drop, and DeltaPrime’s liquidity providers would lose money. The protocol has a level at which it liquidates the position and gives back tokens to its LPs.
Borrowed funds must be repaid in the same currency they were issued with. When liquidation occurs, the bot will pay back the loan in the following steps:
- Calculate how much should be repaid to bring the loan back to a safe level.
- Repay part of the loan from tokens supplied by the liquidation bot.
- Transfer part of account positions + liquidation bonus to the liquidator.
That means: The tighter the margin, the bigger the profits for LPs meaning the more accurate price, the better.
About Yield Yak
Yield Yak builds tools for DeFi users on Avalanche. Yield Yak Farms auto-compounds rewards for you. Yak Swap finds the best price execution for dex trades. yyAVAX is Avalanche’s highest yielding liquid staking derivative.
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About RedStone
RedStone is revolutionizing Oracles industry by implementing novel modular design and 3 tailor made data consumption models. You can build the new generation of DeFi & Web3 protocols based on RedStone’s versatile data offering of long-tail, Lp, Ecosystem-native tokens, as well as Real World Data and custom feeds.
