One-click option for yCover on the vault page

I think we should do a better job advertising yCover on the vaults page. We should automatically show how much it would cost to cover your vault holdings on the deposit - withdrawal vault page. Also we could show an estimate of your current apy, and your apy if you got insurance for your vault, so people could compare the difference. I think in the v2 vault API we should include which protocols each strategy interacts with so the vaults could tell you which protocols you would need cover for.

For example say the v2 DAI vault has 4 strategies which interact with cream, curve, uniswap, sushiswap then it would output those in the API and we could say on the vault page full coverage for your holdings in the DAI vault for all those protocols + yearn would be x amount making it an easy one-click button for full coverage.

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I totally agree with that.

I’m just wondering how often a strategy can be added/removed from a vault.
Let’s take your example. v2 DAi vault starts with cream, curve, uniswap, sushiswap. So I take a cover for those 4 protocols (so it means cost x4). I take the cover for 2 years. After 1 years we remove the cream and uniswap strategies and instead we add Maker.

How does it work ?

I have an idea. I’ don’t know if it’s possible and if it is, how easy it will be to do.
But can we imagine adding a button when you realize a deposit in the vault to be covered. So the vault will take a % of your yield and buy yCover with it. The issue I see is the following: if we don’t have fixed terms, I’m not sure we can buy yCover, so it will be impossible for the vault to buy yCover if people deposit and withdraw randomly.

One possibility is to add fixed term and locked deposit. For example, when you deposit you can choose between, flexible, 6 months ,1 year , 2 years. If you chose a fixed term, your deposit is locked and the vault will buy a cover for you (but we will need some fund for this at the beginning, as users will reimburse this cost overtime “1”). In exchange your APY will be lowered (to pay for the yCover).

Can it works ?

“1”:We can also imagine a curve for refund where the refund is not linear. For example, during the first 2-3 month a larger amount of APY is taken for the refund, so users will have less APY during 2-3 months, but it allows to refund “the vault” more quickly.

The only downside of this, is if you deposit funds when a strategy is on, you buy a cover for it, and if during your locked period, the strategy is removed, you paid a cover for nothing …

Again, I don’t know if it’s possible to do that. But with V2 we will also try to bring “mass adoption” so if we can have a very easy way to allow users to cover their funds… I think it can be very beneficial for the protocol.

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i do agree with @dark

There was talk about how insurance can be packaged into NFTs for set amounts and periods so people can buy/sell them as needed. Which evolved into yCover.

For example:

  1. Person A deposits 1000DAI in the yDAI vault. Plans to hold for 3 months. So he buys ten 100DAI Curve insurances for 3 months.

  2. Suddenly, there’s a change of plans after 1 month. Person A withdraws his Dai but can then package all those 100DAI Curve insurances for the next 2 months into separate NFTs and sell them on the market, recouping some costs. Other people can potentially save some money on buying insurance.

This can also apply when vaults change strategies. You can buy your insurance in smaller denominations if you think you’ll need to sell those insurances before their terms are up.

One thing that I think can be improved is we still don’t have options of buying insurances for a future duration (say buying an insurance for April-May in Jan). If we can get this setup, we can literally set-and-forget by ticking some options while depositing, and still have the flexibility of offloading insurance when we want to.

Edit: The buying insurances for a future duration might be solved in some future or options markets.

Hi @Beepidibop.

yes, thanks for your explanations and remind people we can do that. I was more thinking about something automatic, where you don’t have to think about it. Of course, you will have to pay for it (so your % of reward will be lowered) but you don’t have to think about it.

And it can help more adoption. I’m not sure a new user discovering yEarn, will know how to buy a cover and then sell it. I’m also wondering how easy is it to sell a yCover (it’s easy to put it for sale, but do you really sell it?). So if you have an option when you deposit like: “Do you want your fund to be covered against X, X and X for a duration of X days ?”

Do people really buy “second hand” yCover ? Maybe it will become more popular if more people use it. But IMO you really need a lot of people using it to be very efficient, for instance you will need yCover for every range. If i have 5k, I don’t want to buy a 200k yCover !

So yes, I agree with you. But can we propose something more user-friendly ?

When I speak with other crypto users, the main “excuse” not using DeFi, it’s because there is a lot of risks … (and also because they don’t really know how to do)

Yah this is what i’m thinking. It would be for regular users who would say “well better to be safe to get insurance” and just check a box on the deposit page. This would overall simplify the process and make it dead easy for people to get coverage at the same time as promoting and giving our yCover more usage.

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But i’m not sure if it’s possible and what is the best way to do. If you do it on a user basis, i think it’s impossible.

On other solution is maybe to have 2 vaults. An insured one and an uninsured one.

The insured could be capped at 500k for example. So yEarn can buy a cover for it, and people in this vault receive less % to cover the cost o the yCover.
But then I see 2 issues. How do you pay for the cover at the beginning ? (treasury funds ?) And how it works if the vault is not full ?

I think something that incorporates user OpenSea and keep3r can be implemented.

Say you set a preferred duration for your deposit (or perpetual), then a keep3r job looks up second-hand yCover for you on OpenSea or some other NFT markets, all of that bundled into a simple UI would work.

Actually, now that I think about it some more. A separation of an insured vault from the uninsured vault is probably more gas friendly. The insured vault can just deposit to the uninsured vault, periodically harvest profit and use part of it to buy insurance. A keep3r job can buy second-hand yCover for a vault much easier than for each individual user. Another keep3r job can be used to transfer people from the insured vault back to the uninsured vault (or withdraw the deposit) once a user-set duration is up (optional).

UI-wise, maybe users will only see insured vaults by default?

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