Sensitivity to Market Movements
Investors suffer losses (sometimes extreme) due to the downward trends of the crypto markets, especially when they set themselves in leveraged long or short positions.
Steadefi offers delta-neutral and short strategies
Our delta-neutral and short strategies automatically compute and maintain the appropriate hedging of asset(s) delta. This type of strategy allows the investor to earn yield profitably even in sideways or downwards markets.
Impermanent Loss (IL)
Impermanent Loss occurs when one asset in a liquidity pair fluctuates relative to the other asset, leading to an overall loss of equity. This type of loss is amplified in leverage yield farming positions as market movements may move the liquidity pair’s volatile asset (AVAX, ETH, BTC) more dramatically when leveraged.
Steadefi provides IL countermeasures
In addition to autocompounding the underlying protocol yields, our strategy vaults perform “rebalances” based on debt ratio and delta thresholds in order to minimize the impact of impermanent loss over time.
Full Liquidations
When investors seek higher yields through leveraged positions, significant market movements against their position can lead to full liquidation, which can result in a total loss of the investor’s principle.
Steadefi offers automated rebalancing
Bad debt ratios are automatically prevented through our automated rebalancing mechanisms, preventing the scenario for total liquidations.
Obfuscated Profit and Loss Despite High Yields
In order to secure TVL, many leveraged yield farm protocols advertise high rates of return (APYs), which inevitably fall short of their investors' expectations. This means that investors are unable to predict what their yields may be in the long term, in addition to feeling "misled" by returns that end up below the original target.
Steadefi displays historical P&Ls and APRs
Our strategy vaults provide honest data in the form of APRs and PnL tracking. With the help of clear guidance and an intuitive UI, our users can use historical data and vault analytics to craft and implement a fully-informed market view. After forming their strategies based on their market outlook, the user’s only responsibility is to deposit the correct asset and enjoy their steady returns.
Removal of Tedious Excessive position management
Most leveraged yield farming protocols require their investors to manually set up their own market-neutral positions and then also manually rebalance them to ward off liquidation or bad debt ratios. This can result in being both time-consuming and overly-complicated for the majority of users.
Steadefi automates everything
For our strategy vaults, we have automated all of the processes, including the initial market-neutral setup when depositing assets. Yields gained over time are automatically compounded into the principal, allowing our investors to simply deposit and relax.
Mismatch of risk vs reward
Conservative lenders looking for safe (albeit slightly lower) yields on an asset may suffer exposure to the risks involved with highly-leveraged borrowing.
Aggressive lenders seeking higher yields may receive lower "risk-reward" gains as they are forced to share those yields with the more conservative lenders.
Steadefi aligns risks with rewards
By creating isolated lending pools dedicated to the risk profile of the lender, we can offer yields that better align with the user’s risk threshold. For example, in our system, a conservative lender's assets will only be used for more low-risk vault leveraging, while a more aggressive lender's assets will only be used for higher-risk vault leveraging. The yield rewards will then match with the use and risk profile of the funds.
Overreliance on utilization rates
Previous generations of lending-borrowing protocols rely on high utilization rates in order to provide any worthwhile returns for lenders. High utilization, however, suffers both from liquidity withdrawal risks and unpredictable returns as new lenders typically move in to capture those higher rates. Additionally, if utilization is low, lenders have little reason to provide liquidity.
Steadefi provides yield profit-sharing for lenders
In addition to competitive utilization rate interest returns, lenders also share in a percentage of yields from the borrowing strategy vaults. This shared yield ensures that even in times of low utilization, lenders can receive a return on their liquidity.
Negative APRs for borrowers
In traditional leveraged yield farming, when yields are low and utilization rates are high, borrowers run the risk of negative APRs, which can bleed their positions slowly unless they pay back some of their borrowed amount.
Steadefi guarantees no negative APRs for borrowers
In return for sharing a portion of their yields to the lenders, strategy vault users will always pay a borrowing rate that is below their yielding APR.
Lack of yield diversification
Most leveraged yield aggregators build on one specific type of yield source (eg perpetual dexes, UniV2 dexes, etc). If that particular type of yield source experiences a “low period” in the market, yield aggregators and their users are unable to enjoy profitable opportunities.
Steadefi builds on a diverse set of underlying yield sources
By building on liquid staking, perpetual dex and UniV2-style liquidity, both lenders and borrowers can be sure to the find the best yield sources for them, regardless of the current yield narrative.