YAM Investment Portfolio - Description and Current Road Map

YAM Investment Portfolio

Description and Current Road Map

Portfolio Overview

The investment objective of the Yam Investment Portfolio is to achieve long term capital appreciation and minimize risk in order to support growth and development of the Yam Ecosystem.

Yam Investment Portfolio will be moving to an active management system through a collaboration with SetProtocol. This will allow a more dynamic allocation of assets with better risk handling and analysis without loss of decentralization.

Portfolio Description

During every positive Yam rebase, the Yam Treasury mints 10% of the rebase amount and sells YAM to an AMM liquidity pool to purchase funds like yUSD or ETH. The funds acquired through this action is sent to the treasury. We plan to create the Yam Investment Portfolio as only a fraction of the entire Yam Treasury, with the rest of the treasury utilized for organizational needs, product bootstrapping, and ragequit value. For more information and the current treasury value please visit Yam.finance.

Governance

Currently, all treasury management is 100% governed on-chain by YAM token holders via proposals and voting, in an open process that anyone can participate in and takes a minimum of 5 days.

Once the Yam Investment Tokenset has been tested and is production ready, Yams Governance Process will set the following parameters to manage the Tokenset:

  1. Portfolio investment amount
  2. Investment strategy from Conservative to Aggressive
  3. Portfolio Set Director and Portfolio Communications Director
  4. New portfolio assets
  5. Potential partnership investment

By utilizing Set Protocol, the treasury can retain full custody of its funds and continue operating in a decentralized manner, while also allowing for more active management via elected individuals, with guardrails that remove the necessity to trust these individuals to always act in good faith.

Investment Thesis / Strategy

All investment strategies, thesis and objects are subject to change via governance process from Yam token holders.

Investment Thesis:

Yam Investment Portfolio will be determined by our investment strategy scale from 1 to 5 from conservative to aggressive. Currently our portfolio consists of multiple strategies utilizing different decentralized finance strategies:

  1. Liquidity Pool Farming Yield – This strategy provides income when assets are staked at an Automated Market Maker such as UNISwap.io then staked again at a yield farm to gain additional income.
  • AMM staking gains fees from parties swapping assets but it is subject to Impermeant Loss.
  • Staking AMM tokens at a yield farm generates additional tokens (usually the farm’s token) but these tokens can be sold for additional income or held.
  1. Tokenset Index Fund - Defi Pulse Index https://www.tokensets.com/portfolio/dpi
  • The DeFi Pulse Index is a capitalization-weighted index that tracks the performance of decentralized financial assets across the market.
  1. Yielding Stablecoins – Stable coins that can be invested to return income.
  • Yielding Stablecoin pools benefit users by socializing gas costs, automating the yield generation and rebalancing process, and automatically shifting capital as opportunities arise.
  1. Synthetic Assets – Not supported yet - Synthetic assets or “Synths” copy the price of an asset in the “real world” and brings it onto the Ethereum blockchain giving that Synth all the properties of an ERC20 token.
  • This system allows users to bet on the price of an asset without holding the actual asset.
  1. On-chain Options – Not supported yet - Call and Put options to hedge risk.
  • Currently still very new in the DEFI space, need to do more research.

Portfolio will be balanced by Portfolio Set Manager by analyzing of Beta and Correlation of the portfolio. Target beta and correlation will be determined by investment strategy scale as follows:

TechnicalDef

An example portfolio based on investment strategy scale:

Investment Progress / Roadmap:

Phase 1 – In Progress

  1. Building / testing Over The Counter (OTC) contracts to support purchases from treasury direct to asset on chain via governance
  2. Building additional tooling and infrastructure to support new treasury assets and UI.
  3. Governance proposal to Purchasing treasury assets – Defi Pulse Index (DPI) + ETH
  4. Building / testing contracts to yield farm Uniswap ETH/DPI LP on IndexCoop.com
  5. Explore tail risk for yield farming and find mitigating strategies
  6. Governance proposal to yield farm Uniswap ETH/DPI LP on IndexCoop.com
  7. Continue exploration of DEFI space to find new opportunities.

Phase 2 – Tokenset Collaboration

  1. Build, configure and test Yam x Tokenset v2 contracts.
  2. Governance votes to determine initial starting set parameters.
  3. Open set to the public for investment
  • Fees collected go to Yam Treasury
  1. Start, open and manage other sets for public investment – Potential Yam Product
  2. Collaborate with Tokenset to offer Yam products for entire tokenset space such as Yam Bug Insurance Protection
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