You see some great yields on our dapp: there's Single-Token vaults, and ACLM vaults - but you're not too sure which to pick. What are the risks involved? What tokens do you receive as APY? etc.
This will help you out. 👇
Single-Token Vaults
ACLM - Stable Strategies
ACLM - Volatile Strategies
Built On
lending protocols, eg. Venus, Moonwell
CL DEXs, eg. UniswapV3, SushiV3
CL DEXs, eg. UniswapV3, SushiV3
APY Source
supply/borrow APY+ lending platform tokens
Strategy Features
self-balancing for optimized highest APY
single-sided deposits of either token.
auto range setting to ensure earning of swap fees
Tightened range for highest stable pair APY
single-sided deposits of either token.
auto range setting to ensure earning of swap fees
Examples
USDT
wstETH
BTC
LINK
USDC-DAI
USDC-USDC.e
wstETH-WETH
cbETH-rETH
WBTC-tBTC
MATIC-USDT
LINK-WETH
BTC-WETH
USDC-XSGD
More detailed comparisons here:
Single-Token Vaults
ACLM - Stable Strategies
ACLM - Volatile Strategies
lending protocol exploits
no IL risks
CL DEX exploits
low chances of IL
CL DEX exploits
high IL risks
Considerations
exposure to 1 token
slower growth of tokens
high APY vaults less sustainable (as mainly coming from lending platform tokens)
A category of stablecoins from various protocols, ranging from large marketcap to algorithm pegged USD stable tokens. Stablecoin pools paired with USDC also fall under this category.
A category of ACLM vaults, consisting of large marketcap token pairs.
WMATIC
WETH
WBNB
WBTC
tBTC
BTCB
BTC.b
OP
ARB
IL is relatively lower than other pairs as prices for large marketcap tokens generally move in the same direction.
*Take note that IL may negate any gains, or result in losses on the intial deposit. Refer to theHistory Graphin the Advanced section of each vault to evaluate their past performance.
IL may be higher for these pairs as prices tend to fluctuate much more for lower marketcap tokens.
*Take note that IL may negate any gains, or result in losses on the intial deposit. Refer to theHistory Graphin the Advanced section of each vault to evaluate their past performance.
A category of ACLM vaults, consisting of stablecoin tokens paired with mainly large marketcap tokens.
IL may be very high for these pairs as fluctuating token prices are amplified when paired with stablecoin tokens.
*Take note that IL may negate any gains, or result in losses on the intial deposit. Refer to theHistory Graphin the Advanced section of each vault to evaluate their past performance.
A category of stablecoins from different currencies, paired with the USD stablecoin.
IL is minimal, as pegged fiat currencies are much less volatile than other crypto tokens. Token unpeg risk has to be factored in as part of risk assessment as well.
DeFi risks are very high compared to traditional finance, ranging widely from market factors to contract exploits. Here are some risks for consideration along with possible mitigations. Factor in your own risk appetite when deciding on which vaults to deposit your tokens in.
Only put in funds you can afford to lose. Do not risk your life savings on DeFi.
General Smart Contract Risks
Smart contracts are vulnerable to exploits. These exploits can result in significant financial losses or other negative consequences. It's crucial to understand the risks involved and avoid interacting with contracts from untrusted sources.
ACryptoS has focused on safety and careful risk assessment since deployment in 2020. Multiple audits and a bug bounty serve to enhance the security. Read our blog here to understand what sets us apart.
Vaults - Underlying Protocol Risks
our Single-Token vaults are built on top of lending protocols. They run the risk where the underlying protocols are exploited, and funds siphoned out via exploiters. We aim to filter out projects via thorough internal due diligence procedures, and try our best to build on safe credible protocols. Over the years since our deployment, despite our best efforts, there have been a few of these protocols exploited with funds unrecoverable (read: Atlantis, Channels, Sonne)
our ACLM vaults are built on top of V3 Conc Liquidity DEXs. In order to minimize the risks of exploits on the underlying DEX, we aim to only build on stronger and battle-tested DEXs like Uniswap, Sushi, and Pancakeswap.
Stablecoin Depeg Risks
protocols issuing USD stablecoins claim to be pegged to USD 1:1, but many smaller marketcap stablecoins are at a high risk of depegging. It may be due to the mechanics behind how the stablecoin is backed, or due to market sentiments resulting in sell-offs, etc.
larger stablecoins like USDC, USDT, DAI, etc have lower depeg risks, though there have been multiple depegging issues over the years as well
LST/LRT Protocol Risks
liquid staking tokens tend to be quite centralized, where user funds like ETH or BNB are held by the intermediary protocol, and staking is done on their back end.
Risks involve protocol exploits, intentional draining of funds, or "depegging" of liquid staked tokens . Lack of liquidity might affect the unstaking of liquid tokens back to the native token as well.
eg. rETH, wstETH, cbETH, stkBNB, ankrBNB, BNBx etc.
please DYOR on how credible and transparent the staking protocols are, as well as how large the market of these tokens are
Bridged Token Risks
it is essential to understand the difference between native tokens and bridged tokens on various chains. Bridged tokens are susceptible to risks and exploits of the bridging protocol itself.
eg. USDC.e is a bridged token while USDC is the native token that is issued directly by Circle. The native USDC token can be redeemed 1:1 to USD via Circle.
eg. Multichain bridge was exploited on multiple chains in 2023. Funds that were lost due to that incident has not been recovered since.
Wrapped Token Risks
Wrapped tokens, while offering convenience, can pose risks. The underlying asset's security and the wrapping platform's reliability are crucial factors. Be cautious of potential vulnerabilities and always research before investing in wrapped tokens.
eg. WBTC is wrapped by BitGo, cbBTC is wrapped by Coinbase etc.
