Single Strategy Vaults
Single strategy vaults automatically compound an individual position in an individual protocol on behalf of the user. This may include yield farming in a particular pool on a particular DEx, looping LTV of a single asset on a lending protocol to maximize yield performance, or auto-compounding a single-stake position on a particular protocol.
For security purposes, some single strategy vaults employ a 0.1% withdrawal fee, which is redistributed to vault users. This fee is being phased out in newer vaults. You can read more about it in the Fee Structure or Security sections.
On most DExes, users can provide liquidity for trading pairs and stake their LP positions to earn emissions. Users can then regularly harvest those emissions and do with them as they please. Reaper Farm vaults allow users to deposit their LP tokens in exchange for rfTokens. Vault contracts will deposit the LPs to the respective protocol to earn emissions, and compound those emissions back into more LPs on the user’s behalf.
Automatic harvesting occurs whenever it is deemed profitable by the Harvest-Bots (accounting for the value of emissions and gas required to complete all transactions). Depending on network congestion and emissions value, harvesting may occur every few minutes or every few days, but rest assured that Scully is keeping an eye on things.
Some protocols allow users to single-stake assets to earn yield. Reaper Farm allows users to deposit their assets into vaults, which interact directly with respective protocols to stake said assets. Vault contracts will then automatically harvest and compound rewards on the user’s behalf.
Like LP vaults, automatic harvesting occurs whenever it is deemed profitable by the Harvest-Bots (accounting for the value of emissions and gas required to complete all transactions), ranging from every few minutes to every few days.
Lending protocols have variable interest rates to manage supply and demand of markets and maintain safe operation. At a minimum, users can deposit assets for lending to earn yield from interest rates. Depending on market conditions, it may be profitable to borrow the same asset and deposit it back into lending, such that the interest rate from borrowing accrues more slowly than the interest rate from the overall lending position. If favourable, this process can be repeated multiple times, and this is called looping. Some protocols even incentivize lending and borrowing, which adds another layer of yield.
The key considerations here are that the borrowed asset is the same as the lending asset, and LTV remains below the liquidation threshold, so the risk of being liquidated is extremely low.
The mathematics to optimize this process while accounting for price movement and emissions can be complicated for individuals to manage. But not for Scully.
Reaper Farm offers vaults that automatically optimize the looping process on behalf of users. Sometimes this means lending only, while other times the vault will leverage the position to optimize yield.
If applicable, harvesting occurs automatically whenever it is deemed profitable by the Harvest-Bots (accounting for the value of emissions and gas required to complete all transactions), ranging from every few minutes to every few days.