The strategy provides liquidity to tokenized real estate that can be used in aave to borrow stablecoins and buy more houses.
Users deposit eth with the expectation of generating a yield backed by real world assets. Further inceptions could allow users to deposit stablecoins or yfi so the psychology around crypto changes, if yfi has vaults backed by real assets that generate a real yield, that could change people’s opinion drastically about crypto being something just printed out of thin air and that solely exists in people’s mind.
The motivation of this strategy is the current lack of trust in the crypto ecosystem due to the complexity and lack of real world usage, if someone from Uganda can provide liquidity to a vault backed by tokenized us real estate assets and yinsure his/her investment, that would make a real difference in the current world.
Buying the tokens directly from the market is complicated because there’s still a lot of kyc procedures in the ecosystem. My approach to this problem is to buy the LP tokens in the Uniswap exchange so the vault can harvest the fees of traders willing to buy RealT tokens. This is one approach to the problem but if a professional dev could figure something out to buy real estate tokens directly and the vault could actually hold the tokenized real estate, and then use that tokenized real estate as collateral in aave to borrow stablecoins to buy more houses the inception layers could get deep.
Aave is currently bonded just with RealT infrastructure but there’s a lot of other tokenizing real estate projects.
This is just a proposal so don’t try to understand this as a fixed strategy as it’s not something deployed and approved rather an idea that is flexible, this idea can be molded and morphed into what the devs can provide and also what is currently possible. I’m talking about the asset that you deposit in the vault, how is the liquidity then managed, if it includes yinsurance directly or not, and of course what the devs make out of the strategy, performance fees, withdrawal fees… The main idea is to have a vault backed by real world assets so people can trust the yfi ecosystem in a much deeper level.
People in the blockchain seas trust code because they’ve already taken that leap of faith but lots of people are still very skeptical about value and trust being digital.
It’s a very hard process for someone to trust something that is just code, and that code is law, ( altough they trust politicians very much blindly), so if the yfi community could merge the digital world with the blockchain, that’s where retail adoption could come in a big way.
As everything in life it has some kind of risk, ( not taking risks is also risky ), the real estate market could plunge and also the crypto market, that’s why I thought using yinsurance on the vault could make people feel safer investing in this vault.
The strategy is implemented.
The strategy is not implemented.
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