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Smart Yield strategy update

12 May 2022

Smart Yield strategy update
Anthony Lesoismier Founder, CSO

Anthony Lesoismier

Founder, CSO

At SwissBorg, our goal with the Smart Yield program is to provide the best risk/return ratio to our users. With this in mind, the strategy optimiser will revise its deployment of certain assets currently held in Smart Yield wallets.

Please note that all yields are safe and DeFi strategies have been restructured to minimise all the risks and let the storm pass safely, and the team is actively monitoring market conditions to protect our users’ wealth. Meanwhile, there are still opportunities to earn in this environment, with yields on ETH remaining stable while the risk is low.

Note that with the current levels of movement in the crypto markets, it is possible that there may be liquidity issues due to network congestion. While all users’ assets are safe, there may be some delays if the situation continues to deteriorate.

USD stablecoins update

One of the platforms used by the Smart Yield program was Curve, which has been used to generate yields for USDC and DAI. Recently, Curve liquidity distribution has skewed drastically towards USDT, leaving very few USDC and DAI in their pool allocation. This pattern indicated that the market was worried about a potential USDT depeg, which took place earlier this morning.

While USDT has since repegged, if another depeg were to happen, it would expose other stablecoins that are combined with USDT in the Curve liquidity pool.

As a result, the Smart Yield program has redeployed these assets from Curve to Aave, where individual assets are isolated. This will provide maximum security for the assets in the Smart Yield program, however, it will result in a 1-2% drop in the current yields being offered. 

BTC yield update

For the above-mentioned risks facing USDT, the BTC strategy will also be updated, with BTC being removed from the Venus platform. 

USDT can be collateralised on the Venus platform, so we felt it was prudent to reduce risk by shifting holdings to another platform. This will result in the yields being lowered over the coming days.

ETH yield update

ETH is one of the most popular Smart Yield wallets among the SwissBorg community, with nearly $150 million in ETH currently held in Smart Yield wallets and yields of up to 4.5% per annum.

The good news for our users is that the ETH Smart Yield wallet is one of the safest in the current market environment - the yield on ETH is being generated on one of the strongest available platforms, which has kept counterparty risk to a minimum. Regardless of how the price of Ether might move in the current volatility, the wallet has no exposure to the risks facing UST or USDT.

This means the yield on ETH will only be impacted slightly, if there is an impact at all.

Any users holding assets in the ETH Smart Yield wallet can rest assured that their assets and yields are safe.

Other Smart Yield assets

All other assets in Smart Yield wallets have been migrated to Aave to further reduce risk. This will result in some yields decreasing, with the yield on XRP being reduced to 0% and the yield on EURT being reduced to 1.5% until further notice.

We will continue to monitor the market situation, and will review this strategy as necessary. As our users, we will update you as the situation evolves.

Remember that your funds are safe, and we thank you for putting your trust in SwissBorg in these turbulent times.

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