This article summarizes the paper ‘SoK: Yield Aggregators in DeFi’, a joint work between UCL CBT and Imperial College London.
Yield farming has been an immensely popular activity for cryptocurrency holders since the explosion of Decentralized Finance (DeFi) in the summer of 2020. Asset managing protocols had well over 3 billion USD locked in May 2021 and hold 2 billion USD at the moment, at the time of writing.
While there is a plague of (scam) projects promising huge yields in a short time, yield aggregators such as Idle Finance, Pickle Finance, Harvest Finance and Yearn Finance are trying to build a sustainable source of yield for the DeFi community. This made me wonder:
My paper on Yield Aggregators in DeFi — a joint work with Jiahua Xu (UCL Centre for Blockchain Technologies), and Toshiko Matsui (Imperial College London), aims to answer all those questions. We present a generalized framework of yield aggregators. Let’s take a deep-dive into the most “degen” part of DeFi, yield farming.
To read more technical and in-depth explanations of the framework, please read the paper. Any feedback is welcome and much appreciated.