Strategies

Lending

One of the simplest strategies is collateralized lending which involves lending assets on lending protocols to earn a yield.

An optimized lending strategy lends USDC to the highest yielding lending protocol.

Epsylon’s strategies are exposed to the lending protocols Geist and Alpaca.

AMMs

AMMs are used in Epsylon’s vault strategies to earn trading fees (and liquidity mining rewards if available) and to exchange liquidity mined tokens for the desirable token.

Examples of the AMMs to which Epsylon’s vaults are exposed are Curve Finance, Spookyswap, Solidly and Beethoven. Beethoven is predominantly used to earn trading fees and farm BEETS rewards, whereas Spookyswap and Curve Finance are used to exchange liquidity mined tokens for the desirable token and create liquidity pairs.

Leverage-enabling protocols

Leverage-enabling protocols are used in Epsylon's vault strategies to increase the yield. This is possible when a non-leveraged strategy earns a higher return than the cost of borrowing.

Examples of the leverage-enabling protocols to which Epsylon’s vaults are exposed are Geist, MAI and Abracadabra.

MAI and Abracadabra enable the minting of Stablecoins against collateral. The Stablecoins can then be invested in yield-bearing strategies.

Liquidity mining protocols

A strategy for Epsylon's vaults is to liquidity mine (or yield farm) protocols. Liquidity mining involves interacting with a protocol to earn the protocol’s native tokens.

The interaction can be as simple as staking an asset in a protocol’s staking contract, or it can be more complicated such as staking a LP to mint protocol rewards and later building another LP with those rewards and staking it for more rewards.

In most cases, the liquidity mined token is exchanged for the desired token on an AMM and returning it to the strategy to compound the interest.