General

What is a yield optimizer?

A yield optimizer is an automated tool that aims to generate the maximum possible returns on cryptocurrency investments. This is achieved much more efficiently than by manual means, and each vault has its own distinct strategy for farming, usually by reinvesting staked crypto assets in liquidity pools. This simple technique involves farming rewards from staked assets and compounding them back into the liquidity pool, resulting in an increase in the amount of interest earned and the amount staked that the yield is based on. A yield optimizer can perform this process thousands of times per day. This approach is the main reason for the high APYs available on Beefy, and compounding fees are distributed among all vault participants, making it more affordable for the user.

What distinguishes APR from APY?

APR stands for Annual Percentage Rate, which is the yearly interest rate minus fees. This does not include the effects of compounding, which arise from reinvesting profits. If you invested $100 with 100% APR, you would earn $100 in profit over a year.

On the other hand, if you frequently reinvest your earnings, you will compound your interest, resulting in an Annual Percentage Yield (APY). The more often you compound your interest, the greater the difference between APR and APY.

How does APY function?

APY is the annual percentage yield offered by a specific investment. It takes into account compound interest, providing you with a precise estimate of your earnings relative to simple interest. Large APYs, sometimes in the thousands of percentages, are possible with investments that provide daily yields of 1% or more. As a result of constantly farming and reinvesting liquidity pool rewards, interest compounds on increasingly larger sums.

How can I contribute to YEELD?

YEELDx is a community-powered project that welcomes new contributors to join its rapidly expanding group. There are various opportunities for Solidity developers who are interested in building vaults as strategists and earning passive income from strategist fees. YEELDx operates on various chains, which provide opportunities for simple and complex vaults. You can start with the simpler ones and progress to the more challenging ones as your understanding of Solidity grows. Even if you're not a Solidity developer, there are numerous opportunities to work on non-strategy projects, and you can discuss ideas with the community to obtain a grant or lead a project. If you have an interest in business development, you can also help with partnerships and advise the core team on business decisions.

What is the difference between a Vault and an Earnings Pool?

A Vault provides a way for investors to earn more of the deposited asset through compound interest (APY). In contrast, an Earnings Pool allows investors to earn a different token than the one they deposited through linear interest (APR). For example, the YEELD Maxi Vault provides exponential earnings in YEELD, while the YEELD Earnings Pools offer linear earnings in tokens such as $ETH, $BNB, and $AVAX.

Why does it cost so much gas to deposit into a YEELD vault?

Many of YEELDx's vaults have a "Harvest on Deposit" feature, which means that when you deposit funds into a vault, you are also triggering a harvest function. Calling the harvest function is more complicated than a simple deposit, and thus has a higher gas limit/fee. YEELDx employs this technique to ensure the security of investors' funds by making it impossible for malicious actors to steal yield, which eliminates the need for a withdrawal fee. Investors can identify whether a vault harvests on deposit by checking for the absence of a withdrawal fee. Most vaults on less expensive chains such as Fantom and Polygon use this technique. Additionally, as the Harvest Caller, you will be rewarded with some of the wrapped native chain token. Please refer to the Harvest Caller for more information.

How can I check my accumulated earnings?

Your earnings are added to your deposited token amount on each harvest and compound cycle. You can use DeFi dashboards to calculate your profits accurately. External tools such as TopDeFi will read your wallet address and provide you with a comprehensive overview of your initial investment and current earnings.