How Does Smart Yield Work?

How does Smart Yield work?

Smart Yield is designed to enable users to earn rewards on their assets while maintaining privacy and efficiency. Here is an overview of how it operates and what makes it effective.

Earning Rewards Privately

In the Common App, shielded assets can still participate in staking, yield farming, or other DeFi earning mechanisms. This allows users to generate rewards while their assets remain secure in shielded pools, ensuring privacy throughout the process.

Smart Routing for Optimized Yields

Smart Yield includes a Smart Routing feature that automatically identifies the best yield opportunities from leading Ethereum ecosystem lending protocols, such as Aave and Compound. This automated process allocates assets efficiently without requiring manual intervention from the user.

Strategies and Positions Explained

The Smart Yield feature is built around two key concepts: strategies and positions.

• Strategies determine how liquidity is allocated across positions, aiming to maximize annual percentage yield (APY) while adapting to market conditions within predefined thresholds.

• Positions refer to specific pools or earning opportunities, such as a lending pool in Compound. These are the destinations where assets are allocated to generate returns.

This structure ensures a systematic approach to optimizing returns based on market dynamics.