Developer talks about new vaults, products, and verticals

Two suffocating streets from Bitcoin Miami’s gated entrance, I managed to locate a primary contributor for one of the largest projects in decentralized finance (DeFi). Flanked on all sides by clueless Bitcoiners, Yearn Finance vault security pseudonym “Doggy B” chatted with Cointelegraph about the future of the performance vault protocol: anoles running through our feet so oblivious to the leak. alpha like the maxi chatting about Tony. Hawk and Floyd Mayweather.

Describing without doxxing is a delicate exercise, but here it goes: think of the late Che Guevara’s beard, Unibomber sunglasses, and his outfit that gives off a pragmatically bland, “undercover FBI agent” vibe, a contrast to his pleasant demeanor and nice.

In the 25 minutes it took to walk through the door, Doggy smashed protocol expansion, new products, and Yearn’s unique moat of brainpower, all of which point to steady growth for a project that has been going full blast lately. .

New chains, new products

As with many DeFi protocols, Layer 2 has been a focus of attention for Yearn’s developers and vault strategists.

“A lot of the strategists have been playing with sidechains, redeploying vaults on sidechains,” Doggy told Cointelegraph. “The vault would still be in ETH, but it would get liquidity through a bridge from the side chain.”

The only remaining barrier is that the bridges between chains can often be “unstable,” as Doggy put it, taking hours or even days to process, making merchants and developers anxious. In the end, think that the accumulated solutions is where the space will migrate to a large extent.

“I see it as a practice for more ‘intense’ layers two like Optimism and ZK-sync. Hopefully that’s where Ethereum is heading for the long term. ”

He also shared that strategies are being worked on using decentralized exchange liquidity stock positions, a long-awaited product fraught with complications.

“We have been working for a while to try to make DEX strategies work, because you have to deal with impermanent losses,” he said.

The difficulty with these positions lies in limiting the downside, especially in times of market volatility. Option derivatives for hedging positions was a strategy that was tested initially, but decentralized option platforms are largely illiquid and price makes it an impractical solution.

The current working model uses liquidity from two vaults, for example ETH and WBTC, and combines them to create a DEX group position as part of the underlying vault strategies, he said.

Regardless of the exact method, finding a viable DEX strategy is a priority given that it is one of the few sectors Yearn has yet to explore.

“Obviously, it is an order of magnitude more complex, but DEXs are the only vertical where there are billions of dollars that we have not yet tapped.”