The Zoo - Ape Farm V2
DeFi yield farming through Venus Protocol
The Zoo is an evolution on the first farms and we are utilizing other protocols (Venus Protocol) to generate yield. Some of the profit earned through this will then be used to buy back and burn APE. Creating a burn mechanism that benefits holders and users of "The Zoo". So, where does this revenue come from?
The revenue is split into 3 streams of income:
Lending APY
XVS Distribution
APE Distribution - funded by the treasury
How does it work?
Through smart contracts, we are able to execute a specific set of actions to "Automate" the work for you and by using a specific strategy, generate yield. Here's an example of how it works:
You deposit $1000 worth of BTC into the pool
That BTC is deposited into Venus protocol for lending to earn "Lending APY" (e.g. 5%)
The contract then borrows BTC against that deposited collateral BTC. (This comes with a borrowing APY but the XVS emissions cover this + more) *This step is repeated 3 times achieving triple leverage on those APYs and maximizing the use of your funds
You earn the "Lending APY" and XVS emissions on these funds
The XVS emissions will be claimed daily on your behalf through smart contracts and then a portion of profits from this will be used to buyback and burn APE
The maths: So for the math in this example lets say the borrow apy is 3%. This means that you get (0.5 * 2.176 + 0.1*1.176) - 0.3 * 1.176 = 19.112% APY in our ape v2 pool
Then on XVS emission claim we take a % specified under the pool and use it to buyback and burn APE. So for e.g. if its 50% then we grab (0.1*1.176 * 0.5) = 5.88%
Leaving you with a total APY of 19.112% - 5.88% = 13.232% APR or $132 a year non compounded and that in turn burns 58.8$ in APE per year. Security / Risks The contracts have been forked from the heavily audited "AutoFarm" with minimal adjustments. APE Finance will be getting its own audits in the near future once the project grows and we have the funds available to handle this, as they are expensive but a key part of any project to ensure users are comfortable.
The smart contracts have no code where the developers are able to withdraw or touch the funds and you have the ability to withdraw your funds at any time (provided the liquidity is available in the Venus Protocol).
Last updated