SoK: Yield Aggregators in DeFi

Simon Cousaert, Jiahua Xu and Toshiko Matsui

Papers from arXiv.org

Abstract: Yield farming has been an immensely popular activity for cryptocurrency holders since the explosion of Decentralized Finance (DeFi) in the summer of 2020. In this Systematization of Knowledge (SoK), we study a general framework for yield farming strategies with empirical analysis. First, we summarize the fundamentals of yield farming by focusing on the protocols and tokens used by aggregators. We then examine the sources of yield and translate those into three example yield farming strategies, followed by the simulations of yield farming performance, based on these strategies. We further compare four major yield aggregrators -- Idle, Pickle, Harvest and Yearn -- in the ecosystem, along with brief introductions of others. We systematize their strategies and revenue models, and conduct an empirical analysis with on-chain data from example vaults, to find a plausible connection between data anomalies and historical events. Finally, we discuss the benefits and risks of yield aggregators.

Date: 2021-05, Revised 2022-03
New Economics Papers: this item is included in nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in 2022 IEEE International Conference on Blockchain and Cryptocurrency (ICBC)

Downloads: (external link)
http://arxiv.org/pdf/2105.13891 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2105.13891

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().