Stacking Ribbon x Yearn Yield
One of the most powerful features of DeFi is composability. Users can deposit their assets in a money market like Compound, then reuse the cTokens that they get back in a different protocol. This “double dipping” of collateral is extremely powerful — it lets collateral get used in multiple places at the same time, and as a result users can stack yield from various protocols.
Today, we are announcing a new product that lets users stack Ribbon and Yearn yield at the same time: yvUSDC ETH Put Selling Vault.
This product is live and users can start depositing on the Ribbon app.
Yearn USDC yVaults
With over $460mm of assets, the Yearn USDC yVault is one of the most popular ways to earn yield on USDC in DeFi. When users deposit their USDC into this Yearn vault, they get back a yvUSDC token that represents their share of the vault. Leveraging composability, we can then use this yvUSDC token as collateral in other protocols such as Ribbon.
In Ribbon’s original ETH Put Selling Vault, users deposit USDC collateral to write ETH Put options. We’ve worked with the Opyn team to create ETH Put Options that can be backed by yvUSDC collateral instead of regular USDC. Using this new feature, we can then create a vault that abstracts away all this complexity for users, while letting them stack Yearn + Ribbon yield.
How does the Ribbon Vault work?
Throughout the week, users can deposit USDC as per usual. Every Friday, the Ribbon vault deposits that USDC into Yearn, and gets back yvUSDC.
Once the vault gets back the yvUSDC, the vault deposits the yvUSDC into Opyn as collateral, and mints ETH Put Options. Those Put Options are then sold to market makers as yield for the vault. To learn more about how the Put Selling Vault works, read this post.
When users are done with using the Ribbon vault, they can simply withdraw and get back regular USDC — the Ribbon vaults will perform the conversion between yvUSDC and USDC. We are also currently working with the Yearn team to become a Yearn affiliate partner, where Ribbon gets a kickback on fees, which we will pass back to users.
Through this new product, users can indeed have their cake and eat it too. Stacking these two high yield products will likely generate the highest yield on USDC in all of DeFi.
To start, we are enforcing a $10m USDC deposit cap on the new vault. This is a brand new product that we want to test for a few weeks before increasing capacity.
- What currency do we use to deposit into this new vault?
- What currency will I get if I withdraw from this new vault?
- How much yield will this new vault have?
It fluctuates based on the Ribbon and Yearn vaults, but it is Ribbon ETH Put Selling yield +Yearn yUSDC yield.
- Can I deposit yvUSDC that I already own?
You can, but it is not supported by the Ribbon frontend yet. You will need to call
depositYieldTokenon the contract itself for now.
- If I am in the regular ETH Put Selling Vault, do I need to pay the exit fee to move my assets into this new vault?
Unfortunately yes, for now. We are working on creating a new migration feature to move assets between Ribbon vaults without having to pay the exit fee, but this is still a work-in-progress.
- Is there Liquidity Mining incentives for this new vault?
- Has this new product been audited?
The base contracts are audited by ChainSafe, Peckshield, and Quantstamp. The additional Yearn features have been audited again by ChainSafe.