YAM Harvest: Reinvestment and Profit Taking Dapp

So I was tending my Crops last night, and was mulling over whether I wanted to add new ETH to pair with the farmed BAL from my BAL/ETH LP yield farm. I realized I don’t need to and can just book ETH profits if I buy into the pool with only BAL. This is a feature that currently seems unique to Balancer pools, where you can reinvest or divest into 1 asset without having to perform any added transactions.

Where am I going with this? Well, we aren’t using Balancer for our yield farming so this isn’t an option, but we could create a dapp or front-end that lets users easily reinvest their farming rewards with one click and without needing ETH.

“But wait!” You say… Everyone contributing to the pool that way would be selling YAM to ETH and adding sell pressure…

Well… yes. This does create a bit of selling pressure on YAM. We could keep an option that adds both YAM and ETH if desired. In the end, If someone is going to sell they probably will anyway. Either way, all the trades that are made to sell the YAM for ETH are done on that pool so the fee goes back to the pool, and any subsequent fees from arbitrage also goes into the pool.

On the flip side, this would allow people to buy YAM and provide it as liquidity in one transaction, using ETH. We could have a function on the same front end that lets you use ETH to buy YAM and stake it into the pool. In the background it sells half, deposits both tokens, stakes in the incentivizer, and then stakes the SLP for the treasury.

If the treasury is farming sushi, a larger YAM/ETH pool is good for the YAM treasury, so making it super easy to become and LP and grow the pool should be a priority.

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Backstory
This is the easy version of a larger LP rewards product that I have envisioned that could be built with different weighted Balancer pools. You could make 99-1, 90-10, 80-20, 70-30, 60-40, and 50-50 YAM/ETH pools. You can stream the LP rewards equally, or weighted relative to the % each of the pools has of the total. Then create a front end that allows LPs to take their farming rewards and set what level of profit taking they want in ETH (10-50%). The dapp then deposits their tokens single sided into the appropriate pool. The yield farmer would deposit to the pool that best matches their desired profit taking profile. Maybe something to experiment with when new products are released and we do yield farming.

More thoughts on that coming in the future.

Chopping up the liquidity into so many pools might cause a slippage problem.

Good idea, alphafinance does this and it makes it very easy to use.

yeah, ignore the “backstory” part. That is just for color. The important part is the first part re: the sushi pool.

Interesting idea that popped up recently regarding this:
Alpha Homora does something very similar by allowing you to enter liquidity pools one sided and also use leverage to farm.

Could we collaborate with them to create a function that lets you both buy YAM and LP with ETH, and also sweep your YAM rewards into the pool with their code as well? At the same time you could farm with leverage.

Do it all in our UI. Boom. It’s like Harry Potter was a Yam Farmer.

I talked with the Alpha Finance team. They are interested in a collaboration. Stay tuned!

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Very nice, @rossgalloway!