As the DeFi sector continues to expand rapidly, investor interest has surged in recent years. Studies predict that the market will reach nearly 22 million users by 2028.
One of the main attractions of DeFi is the wide range of investment opportunities, often offering higher returns and greater accessibility compared to traditional finance. Platforms like Rivo have played a crucial role in democratizing DeFi, making it easier for everyone to participate.
Rivo offers a wide range of investment opportunities, including liquidity pools and indexes. For those new to crypto, indexes can be a great starting point.
The Yield ETH Index, in particular, is a good choice for beginners. It leverages high-quality assets to expose investors to lucrative Ethereum-based yield opportunities.
Consider an individual looking to enter the commodities market, specifically gold. For the average layman, purchasing physical gold bars or coins might seem like the most straightforward approach. However, this involves considerations such as storage, insurance, and the complexities of buying and selling physical assets.
A more convenient option is investing in a gold ETF, which offers exposure to gold prices without the need to handle the physical metal. The Yield ETH Index is similar, providing investors with a carefully curated portfolio of leading Ethereum yield strategies.
As an omnichain offering, the index benefits from a diversified range of yield-generating strategies across multiple networks. Its assets and protocols are selected based on rigorous criteria, including protocol design, counterparty risk, smart contract security, and decentralization.
The Yield ETH Index is a dynamic portfolio designed to capture the best risk-adjusted yield-generating strategies in the Ethereum ecosystem. The composition of the index is flexible and will evolve over time to reflect the most promising opportunities.
As of today, the Yield ETH Index consists of two primary strategies:
As part of this strategy, user funds are invested in the rETH-WETH liquidity pool on Aura Finance. This enables investors to earn various rewards, including $BAL and $AURA tokens, rETH staking yield, and swap fees.
To maximize returns, all accrued rewards are automatically reinvested into the strategy.
rETH is the Rocket Pool protocol’s liquid staking token. The rETH token represents an amount of ETH that is being staked and earning rewards within Ethereum Proof-of-Stake. Rocketpool, the second-largest project in the ETH liquid staking market, plays a significant role. It allows participants to become potential node operators, contributing to the security of the protocol-issued rETH liquid staking derivative.
The second major component of the Yield ETH Index, representing 46% of its allocation, involves user funds being supplied to the Across ETH bridge to facilitate cross-chain transfers between Ethereum rollups. Deposited funds earn yields from bridging fees and incentives in $ACX.
Across is a leading bridge known for its innovative architectural features that enable seamless cross-chain swaps between Ethereum rollups. The bridge currently handles a Total Value Locked (TVL) of over $144 million and offers attractive rewards to liquidity providers
The remaining 5% of the funds are maintained as a liquidity buffer for cheaper withdrawals and potential rebalancing.
That said, there are some considerations that users must take when investing in the index as well. These include:
The Yield ETH Index aims to target an expected APY (annual percentage yield) ranging between 3-10%, including estimated yield farming rewards, but excluding ETH’s price performance.
As shown in the chart, the index has a low-risk profile with an overall score of 80, making it suitable for investors seeking stable returns with minimal market volatility exposure.
The protocols used in the index’s strategies have been audited by leading security firms, including Sigma Prime, Consensys Diligence, ChainSafe, Trail of Bits, Peckshield, Mixbytes, and Chainsecurity (among others). These audits cover various aspects of the protocols, including smart contract security, economic models, and overall system design.
Investing in the index is very simple and can be done by users of all experience levels.
It’s important to note that the ETH Yield Index has a maximum capacity of approximately 750 ETH.
The ETH Yield Index represents an innovative approach to Ethereum yield farming, offering a balance of potential returns and risk management.
By providing diversified exposure to leading ETH yield strategies, it opens up sophisticated DeFi opportunities to a broader range of investors. Therefore, as the Ethereum ecosystem continues to grow and mature, products like these stand to play an increasingly important role in shaping the future of decentralized investing.
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