[Idea] Improve the yield of idle capital

Ideas
1

Background:
Currently, our utilization rate of TUSD is at 31% and the rest of our idle capital is deposited in Curve for short-term parking. 100% of USDC are idle currently. Curve TUSD pool is currently offering 12.03% APR. Curve 3pool is currently offering 4.45% APR. We may seek for a higher yield for our lenders from other safe options that allow liquid exit.

Suggestion:

  1. yearn.fi is the largest yield-aggregator with $3.79 billion TVL. It has been battle-tested and has a long track record. No withdrawal fee is collected for its v2 strategy which can allow our liquid exit. 23.99% is offered for its crvTUSD strategy with yveCRV boosted applied and 4.85% is offered for its crvTUSD strategy with yveCRV boosted.

  2. convexfinance.com is an emerging yield-aggregator which focus on Curve strategy with $508.5 million TVL. It has been audited before its launch and has tight cooperation with Curve. With its cvxCRV boost, 65.34% is offered for its TUSD strategy and 24.99% is offered for its TUSD strategy with cvxCRV boosted .

  3. If the community prefer minimizing the intermediary risk, another possible choice can be our pool locking a small amount of CRV to veCRV (around 1% of our treasury) for 4 years in Curve ourselves. It can provide us up to 2.5x boost for our deposited capital depending on the ratio between veCRV and our deposited idle capital. The small amount of capital investing will significantly improve our performance without adding much fluctation as it only accounts for 1% of our treasury. No additional contract risk is added to our idle capital in this case.

I sincerely suggest the core team and the community to consider my suggestion. It would improve our long-term APR and make our protocol more sustainable.

4 Likes
2

I think this is the perfect opportunity to point towards a community treasury, these investment decisions needs to be changed often based on yield and for a large part should be taken out of the teams hands (they are busy with development). I am not sure what your availability is, but we are looking for enthusiastic community members to help out with a community grants/treasury team. Check out my other posts and leave a comment or two.

Discord is massnomis#7291 pm me

3

Aren’t they competitors? I think we need marketing and attracting new borrowers and players in the market. We must be first, not a little fish on the back of a shark

4

They are in the yield-aggregating industry that their underlying goes to Curve as liquidity provisions while we are in the lending industry. I don’t think we are competitors.

1 Like
5

Thanks for clarifying

6

@Raccoon thanks for brining this up on the community call today. I support this vision and the idea that we should deploy funds to the best venues on a risk/return adjusted basis.

As @hal mentioned today, right now we’re prioritizing security and choosing to minimize protocol risk as much as possible (i.e. just looking at Curve/Aave/Compound, not stacking additional protocols on top of these).

As we go forward, I think we might want to adopt more a variety of strategies suited for different risk/return appetites. I can see TrueFi enabling this as we move further towards decentralization, create additional lending pools, and enable governance to deploy new strategies to each pool.

7

Great to know that the team is working towards developing more strategies. Hope that our lending yield without taking TRU incentives into account will eventually outperform our competitors.

1 Like