Summary: This Strategy proposal seeks to gain the approval of the KeeperDAO Flash Loan USDC and DAI strategies as part of the MetaVault yield portfolio.
The advantage to adding this strategy to the Curve and Yearn only strategy is two fold, it brings in a new different yield stream that has a high APY above Curve and Yearn strategies. Through the KeeperDAO flash loan strategy, YAXIS capital can take advantage of this increase in income and even share. The KeeperDAO vaults as of 4/27/21 have $54M USDC and $44M DAI, currently staked in these strategies. The KeeperDAO strategies have been audited by three reputable groups Samczsun, Quantstamp, and Pecksheild.
Abstract: This new strategy would need to be integrated into the YAXIS Meta-vault system with capital limits on maximum allocation to the respective vaults to ensure returns in excess of the strategies CURVE AND YEARN strategies. The amount of allocatable capital can be calculated solved with an oracle that is watching the volume of flash loans in the network and the distribution of ROOK earned in their treasury.
USDC PROPOSED CAPITAL CAPS
@ $350 ROOK
Based on current FLASH loan YIELD 4/27/21
USDC MAXIMUM CAPITAL ALLOCATION RANGE TO MAINTAIN ~14%+ APY - $33-36M
DAI MAXIMUM ALLOCATION RANGE TO MAINTAIN ~14%+ APY - $44-46M
MOTIVATION: To diversify the MetaVault capital strategies to include flash loan liquidation which become more profitable during times of price volatility and improves with lower gas rates on Ethereum. Gain creditability in providing additional alpha and strategies, hope to earn my stripes in this community.
For: The Keeper DAO flash lending protocol strategy has passed three audit safety standards.
The KeeperDAO flash lending strategy would provide more yield for the meta-vault depositors, which in turn increases the buybacks for YAXIS stakeholders. Rook has ample liquidity in its UNISWAP pools which allow for profit taking and securing the yield. These strategies have enough liquidity capacity to maintain a high yield for a meaningful allocation of capital, current MetaVault stable coin vaults have $180M, these strategies can support a total allocation of $82M, which is just under half of the current vault, which gives us enough space to allocate and grow the vault and lock up yield. The amount of capital earned in the KeeperDAO platform has been growing since its launch in November 2020, I personally have been lending my capital in the platform and have had no errors or downtime since launch, with returns that have exceeded the stated APYs which are based on an average over, what I believe is 48hr volume (could be confirmed).
Against: It will take development time to add to the meta-vault, the proposal opportunity of capital allocation size might be reduced, the yield which has proven since launch of growth may not continue to grow at the same rate, or grow at all.