What Cesta Finance do
Last updated
Last updated
Instead of hodling simple baskets of tokens, Cesta Finance turns the assets into yield generating LP positions that are staked on various DEXs. This additional yield maximises capital efficiency, letting the capital do all the hard work for the users.
There is a range of investment strategies that suits every investment need, from low-risk stablecoin farms, to riskier altcoins index farms (indexes in the form of aforementioned yield generating LP positions).
This strategy invests half of the funds into top 3 decentralized exchange(DEX) tokens on Avalanche and half into AVAX. These tokens include JOE(Trader Joe), PNG(Pangolin Exchange) and LYD(Lydia Finance).
JOE 22.5% (AVAX-JOE pair)
PNG 22.5% (AVAX-PNG pair)
LYD 5% (AVAX-LYD pair)
AVAX 50%
Each DEX token is pair with AVAX to form LP pair that can be staked into their respective yield farm to earn rewards. These rewards are then automatically sold at regular intervals to add more LP tokens and stake back into these farms to maximise the compounding effect.
DEX tokens are especially attractive as their native platform often offer incentivised APRs to increases demand for their own tokens, therefore the return on DEXs tokens to be relatively high compared to other regular token pairs.
This strategy uses the same approaches as Cesta DEX-AVAX indexfarm strategy, but replaces AVAX with Stablecoin (USDT, USDC & DAI). Pairing stablecoins with Avalanche DEX tokens (Trader Joe, Pangolin Exchange and Lydia Finance) to reduce volatility while still enjoying incentivised yield farming rewards.
JOE 40% (USDC-JOE pair)
PNG 5% (USDT-PNG pair)
LYD 5% (DAI-LYD pair)
USDT 5%
USDC 40%
DAI 5%
*Stablecoins will be preferably allocated as 50% of the funds.
We all know that cryptocurrencies are subject to volatility except stablecoins. Pairing with stablecoin means half the volatility, but still able to achieve better APR because these DEX want to support their native tokens.
Besides the yield farming rewards, we can expect better growth on the value of these LP tokens because there are a lot of trading fees that come from DeXToken-stablecoin pools and DeXToken-AVAX pools above.
This strategy uses the same approaches as Cesta DEX-USD indexfarm strategy, but replaces DEX tokens with AVAX. Pure AVAX-stablecoin yield farming on DEXs to ride the growth of the Avalanche ecosystem.
AVAX 50%
MIM 7.5% (DAI-AVAX pair)
USDC 40% (USDC-AVAX pair)
USDT 2.5% (USDT-AVAX pair)
*Stablecoins will be preferably allocated as 50% of the funds.
DEX tokens are more volatile compared to AVAX. If you don't want to take part in any volatility, but believe in the growth of Avalanche blockchain, this is the perfect strategy.
Although the APR is lower than 2 strategies above, it is still better than ETH-stablecoin pools on Ethereum mainnet. And we all know that AVAX is still undervalued compared to Avalanche performance and growth.
This strategy uses only stablecoins as pairs. Users can leverage on many of the yield farming incentives provided on the Avalanche ecosystem while minimising the volatility risks with pure stablecoin-stablecoin pairs.
USDT 33.33%
USDC 33.33%
DAI 33.33%
The actual pairs look like this:
USDT-USDC pair on Pangolin
USDT-DAI pair on Pangolin
USDC-DAI pair on Lydia
Advantages of investing into full stablecoin pools is the fact that there's almost no volatility on stablecoin itself and no impermanent loss occurred on the full stablecoin pools. Since it is double-stablecoins pools we can expect the APR will be lower than strategies above, but still able to achieve 2 digits APR compared to full-stablecoin pools on Ethereum or Polygon.
