EXO-Compound (15/09/2021)
Cross-Chain yield aggregator - Optimising DeFi users' yield farming at the lowest possible cost
Last updated
Cross-Chain yield aggregator - Optimising DeFi users' yield farming at the lowest possible cost
Last updated
EXO-Compound is a yield optimizer protocol within the ExoniumDEX ecosystem, focusing on providing yield farmers across various major blockchains with auto-compounded yields at empirical optimal intervals, whilst reducing gas costs through vetted smart contract code and best-in-class yield strategies. EXO-Compound uses a proprietary dynamic harvesting optimizer to enable the highest APYs on our platform.
Through a set of investment strategies secured and enforced by smart contracts, EXO-Compound automatically maximizes the user rewards from various liquidity pools (LPs), automated market making (AMM) projects, and other yield farming opportunities in the DeFi ecosystem. EXO-Compound was designed with the purpose of optimising DeFi communities' yields as our proprietary smart contracts interact with the other DApps offering yield farming features.
The investment strategy implemented on EXO-Compound smart contracts will automatically increase your initial staked balance by compounding arbitrary yield farm reward tokens back into your initially deposited asset.
DeFi applications are unique in the sense that they are permission-less and trustless, meaning that anyone with a supported open-sourced web3 wallet can interact with them without the need for a trusted intermediaries. While you have funds staked on EXO-Compound you remain 100% in control of your funds.
With the implementation of EXO-Compound, $tEXO tokens are 'dividend-eligible' revenue shares on ExoniumDEX, where tEXO holders earn a share in profits and are entitled to vote on platform decisions and fees structures.
For all the vaults deployed on every blockchain, we have our own native governance token $tEXO at its core. Platform revenue is generated from performance fee profits and a portion will be distributed back to tEXO community.
All vaults will be evaluated and pursued to expand our growing repertoire of strategies.
ExoniumDEX will bear the cost of gas fee, vault strategy development, and research for vaults.
There will not be deposit or withdrawal fees for EXO-Compound. Cost will be covered by performance fee based on profits generated through vault instead. Performance fee will be 8% at the start.
There will not be deposit or withdrawal fees. All fees are taken from user's profit, providing the best market rate across all other yield optimisers.
As mentioned in the tEXO documentation, tEXO token holder will be entitled to receive a portion of platform's revenue through the services we offer and EXO-Compound is no exception. Yield protocol will be split into two different phase. Revenue pool will be introduced in second phase. Phase 1 fees to buy back tEXO will be distributed to revenue pool when it is introduce in second stage. Thereafter, all buybacks from fee and distribution to tEXO stakers in revenue pool will be automatic. By splitting revenue pool to latter stage, this allows the first batch of tEXO stakers to receive fees from stage 1.
While each strategy may be using different tokens that are not $tEXO, a portion of the performance fee generated through vaults is used to buy $tEXO on the open market, which is then distributed to those who stake $tEXO in the Revenue pool. This will add on utility and result in a consistent buy pressure in the open market. tEXO staked is also automatically compounded upon every interaction with the Revenue pool.
Emission rate and performance fee may be subject to changes after community voting in the future.
Yield Protocols Stages:
1: Auto-compound. 8% performance fee to buy back tEXO and allocate to revenue pool in second stage. Introducing on BSC first.
2: Introduction of Revenue Pool. At this stage, all performance fee from profits will be used to buy back tEXO and stakers to receive the performance fee automatically. All tEXO bought back from performance fee in stage 1 will also be allocated in revenue pool rewards, so that there are rewards in revenue pool upon introduction, without needing the vaults to accumulate performance fee revenue.
Detail flow
User stake single assets or LP to the Exo-Compound pools and receive ecASSET in return
Exo-compound will stake user's stake to PCS-V2 to get yield reward and auto-compound
Based on the optimized compound rate daily, Exo-Compound will claim the yield reward from PSC-V2. Exo-Compound will ensure that the gas fee for compounding will be profitable for users.
92% the compounded rewards will be used to stake back to the PCS-V2 pools. Please note that user's tCAKE will remain the same.
8% the compounded reward will be performance fee. Performance fee will be used to
buy back tEXO to increase tEXO buy pressure
maintain the system
pay the auto-compound gas fee
Technical Specification
Vault will be implemented the "upgradable contract"
Strategy will be implemented the "upgradable contract"
Single Asset Token: ERC20 token like CAKE, tEXO
LP Token: Token issued from PSC-V2 when providing liquidity such as wBNB/BUSD
ecASSET: token issued from Exo-Compound when user stake Single Asset Token / LP Token to Exo-Compound vaults. Ex: tCAKE when stake CAKE
iTEXO: token issued by staking into Revenue pool
tEXO: ExoniumDEX native token
tEXO reward in Revenue pool will be distributed pro rata per second to all those staked over a duration of 1 day, with each new reward added resetting the duration of the payout. As a result, the instantaneous reward rate for the Revenue pool fluctuates over the course of the day. For this reason, a 7-day average of the reward rate is displayed for this pool. The instantaneous rate can always be checked by reading the contract directly.
Through auto compounding, whenever any user deposits or withdraws funds from the Revenue pool, the rewards for all users are automatically collected and restaked to improve their returns and save gas fee. While this increased the cost associated with staking tEXO to Revenue pool, the utility added was deemed by our community to justify the moderate additional cost to enter or exit the pool.
The interest bearing tEXO token, itEXO, is a deposit receipt token for tEXO that is auto compounding in the REVENUE pool. It can be obtained by selecting the "Use itEXO" box when depositing into the Revenue pool.
itEXO utilizes the same vault architecture as other EXO-Compound's vaults, collecting tEXO from users and then depositing it in aggregate into the REVENUE pool. The advantages of itEXO over tEXO include:
Lower gas costs to deposit tEXO into REVENUE pool.
A fungible and transferrable receipt token, itEXO, allowing compounding Revenue shares to be transferred between addresses without first unstaking tEXO.
When a user deposits funds, they are issued a share/rep token of the vault, represented by an ecASSET. These user's funds are then made available for investment according to a pre-defined "strategy" specified by the Exonium devs. Whenever an investment strategy generates revenue (or losses), the total amount of assets in the Vault is updated, however the number of existing ecASSET shares does not change. As a result, the value of each ecASSET share increases with every successful stake. When a user withdraws ecASSET shares from the vault, the ecASSET is burned and the user receives funds proportional to the growth of the investment since their deposit.
Most of EXO-Compound's strategies function by investing the underlying assets into incentivized liquidity pools for various other protocols. EXO-Compound automatically compounds its interest by selling the incentive rewards into more of the underlying vault asset and reinvesting it. While it may show that your deposit is "farming" some particular token, you will only receive the token you deposited, unless otherwise specified.
User funds are protected in vaults by a number of mechanism:
The owners of the vault can only move the underlying funds in and out of the pre-defined investment strategy.
ecASSETshares can only be minted by depositing funds into the vault, and are destroyed when the user withdraws funds.
The investment strategy is protected from changes by a 'timelock.'
EXO-Compound does not track the wallet addresses of depositors. Instead, ecASSET shares are represented by fungible tokens that can be transferred between accounts and traded on secondary markets. Users that trade away or lose their ecASSET shares will not have access to their deposited funds.
Because gas usage is defined by the number of contracts interacted with and the complexity of the interactions, depositing tokens through the Vault smart contract and minting new ecASSET shares requires significantly more gas than than the token trading that most users may be used to. Users should take care to monitor gas expenses, as they may reduce or even overwhelm the profitability of smaller scale investments, especially when network activity is high. However, unlike ERC20 tokens, gas fees are usually low, even during high network congestion.
EXO-Compound provides additional incentives for users to deposit funds in the form of tEXO tokens. These rewards are distributed to users who prove ownership of deposits by staking their ecASSET in reward pool contracts. It is important to note that before a user can withdraw funds, they must first retrieve their ecASSET from a reward pool staking contract.
The traditional definition of APY is the actual rate of return earned on an investment taking into account the effect of compounding earnings. Using this terminology would indicate that the yield farm was compounding earnings for you. That is simply not the case. A more applicable terminology to use would be APR (annual percentage rate), meaning the annual rate earned through an investment. By definition this would mean that your 100% yield farm would double your original investment at the end of year 1 without reinvesting any earnings. But what about if you reinvested that entire amount the next year and the year after that?
Growth whose rate becomes ever more rapid in proportion to the growing total number or size. The simple formula for this is growth = (1 + r)^x , where 'r' = return and 'x' = number of 'times'.
A typical investment does not just pay out on a yearly basis, but in smaller terms (ie: daily, monthly, etc). For yield farming, returns are even paid out on a per block basis. With an average of 28,800 blocks a day on BSC and 37,000 blocks on Polygon, and cheap gas fees, this can allow for a significant amount of exponential growth or compounding of your return. Such example can be found below:
Compound = P * (1+r/n)^nt Example : 100 * (1+1/12)^(12*1)
P = principal or starting balance
r = APR = 100%
n = compounding periods = 12 months
t = time = 1 year
The simple APY calculation in excel can also be stated as =EFFECT(r, n)
