Read on Twitter
Let me ELI5 what happened here so that everyone could admire the power of @iearnfinance v2 vaults.
$YFI https://twitter.com/bantg/status/1381066600292433925
$YFI https://twitter.com/bantg/status/1381066600292433925
1) Yesterday a new farm appeared on Ethereum: https://app.thisistheway.finance . It doesn't even matter what it is. The most important fact is that it rewards farmers with a token $BAG for staking $ETH, $WBTC, $USDC or $DAI. So it's passive earning opportunity.
2) "But sir, it's a new farm, it must be risky!" Is it? The farming contract is a slightly modified version of MasterChef - a well known and battle-tested contract on Ethereum. The only change is that it applies an exit fee on your stake if you leave early.
3) Yearn devs reviewed the contract and decided it was safe to park some funds from ETH, WBTC, USDC and DAI vaults into it. This is the biggest strength of v2 vaults - funds can be deployed into multiple strategies at the same time so that the yield on the vaults is optimized.
4) For example, 30% of 47k ETH from ETH v2 vault is farming $BAG. The rest is deployed into other protocols, e.g. Curve or Maker (borrowing DAI to earn in DAI v2 vault).
The allocation of funds can be checked here: https://yearn-hub.vercel.app/vault/0xa9fE4601811213c340e850ea305481afF02f5b28
The allocation of funds can be checked here: https://yearn-hub.vercel.app/vault/0xa9fE4601811213c340e850ea305481afF02f5b28
5) So 30% of ETH in v2 ETH vault is currently earning 80-90% APR from $BAG farming but it was 300-400% when funds were deployed. Yearn devs were extremely quick to spot a new farming opportunity, check the contract and deploy a strategy to farm it.
6) As @bantg mentioned in his tweet, they were even able to find a way to circumvent early withdrawal fees (by harvesting yield first and then using emergency withdrawal function which doesn't have exit fee). How cool is that? https://twitter.com/bantg/status/1381073486244945920
7) Now tell me. Can a regular farmer really compete with @iearnfinance money robot? Finding a farming opportunity, making sure it's safe, taking advantage of its bugs to avoid withdrawal fees - this requires a team of professional devs / farmers.
8) And this is just one strategy. Tomorrow, a new farm may appear and a portion of funds from the vaults will go there. And you, as a depositor into the vault, can just relax and enjoy high yields without spending ETH on gas to move your funds from one farm to another.
