How does Midas generate yield?
Using different models of volatility prediction, correlation, strategies, collateral asset models, and hedging, the Midas DeFi Team will help users achieve efficiency in all areas of DeFi. The team of professionals works hard to build a portfolio for each asset based on the market conditions and the DeFi strategies that complement one another, have robust risk management policies, and boast sustainable yield generation. Here are some strategies that Midas used for deposited assets:

Concentrated liquidity provider for Uniswap V3

Providing concentrated liquidity for two assets in a chosen price range (eg. ±5%). The smaller the price range, the more fees that are earned. If the price goes beyond the custom range, the liquidity is swapped to the asset.
  • Annualized percentage rate (APR). 20% – 60% APR
  • Risks. Medium: the extensive growth of one asset will lead to decreased amount of target assets (impermanent loss).
  • How we hedge risks. Self-collateralization through lending target assets and liquidity. It decreases return by 30% but negates the main risk.

Borrowing for target asset’s collateral to free liquidity

Used as a combination with another strategy and performs extremely well in terms of USD increase.
  • Annualized percentage rate (APR). None
  • Risks. Medium: the asset’s price depreciates rapidly.
  • How we hedge risks. We take a strategic position on a target asset — a liquidation value higher than 40%.

Yield vaults

The product of the decentralized hedge funds, such as YFI. These strategies are designed to maximize the return of assets to the vaults.
  • Annualized percentage rate (APR). Up to 15% APR
  • Risks. Low: YFI has a perfect track record for hacks being fixed in less than an hour and a 100% money-back guarantee due to insurance protocols and insurance funds. The main risk is the high fees for interacting with the protocol, which can strongly reduce APR.
  • How we hedge risks. Interact with contracts during the nighttime hours, when the gas price is low.

Asset+Stable liquidity provider to hedge from market pullbacks

Combining assets with USDT or any other stable allows earning more assets during market pullbacks due to impermanent loss. This increases the asset amount. Additionally, asset+stable liquidity pools are hardly incentivized by protocols since it is one of the most used trading pairs.
  • Annualized percentage rate (APR). 30% – 150% APR
  • Risks. Medium: there is a risk of continual rallying in the market.
  • How we hedge risks. We make an incremental increase of size position, and with a combination of strategies, it typically favors market growth.

Leveraged liquidity farming

Combining assets with USDT or any other stable allows earning more assets during market pullbacks due to impermanent loss, which increases the asset amount. Additionally, asset+stable liquidity pools are hardly incentivized by protocols, since it is one of the most used trading pairs.
  • Annualized percentage rate (APR). Up to 75% annual returns.
  • Risks. High: flat markets with high volatility may give many false signals.
  • How we hedge risks. DeFi strategies to limit the risks as an impermanent loss.
The combination of DeFi strategies for a single asset allows it to reach up to 40% APR. Part of these returns is used to negate major DeFi risks, like token price decrease (which results in lower yields), and can be protected by opening a no-leverage short position on the token.
Last modified 1mo ago