Would it be possible to create a broader range of strategies for Yearn - e.g., options or futures-based strategies (granted this is just coming to DeFi and probably far from battle-tested)? Or a strategy that arbitrages between different DeFi exchanges (rather than serving as an LP for DeFi exchanges) - this could get around the IL issue and let the strategy profit from more than just stablecoins - maybe even using flash loans (although then I don’t know what we would do with the coins deposited into the strategy )? Granted there are gas costs (aka usury) and there probably wouldn’t be enough arb opportunities to put a large amount of capital to use all the time.
I am just throwing things out there. I know there are so many ways that traditional finance goes about making (honestly obscene) profits. Not all of them are amenable to algorithm but a lot are. Not all of them are possible on smart contracts but I expect they will be.
If the purpose of Yearn is to always be maintaining the bleeding edge of battle-tested strategies, it seems like we need to be looking into a much broader array of strategies. Or maybe people already are?
You can already see the massive erosion of profit from capital pouring into the space. What’s the next edge going to be?