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CIAN’s Yield Layer Overview Revolutionizing DeFi Yield Generation
2024-09-19
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Introduction#

In the ever-evolving world of decentralized finance (DeFi), yield generation stands as a critical driver of growth and innovation. Enter CIAN’s groundbreaking LRT yield layer — a virtual layer that’s set to transform how we think about and interact with DeFi yields.

But what exactly is an LRT yield layer? Let’s dive in.

Understanding the LRT Yield Layer#

CIAN defines the LRT (Liquid Restaked Token) yield layer as a virtual layer that performs three key functions:

  1. Consolidates secure and sustainable yield sources across the entire crypto landscape

  2. Reorganizes these yields into structured, optimized formats

  3. Redistributes the yields to LRT holders

Figure 1: Conceptual representation of CIAN’s LRT Yield Layer

This innovative approach addresses several pain points in the current DeFi ecosystem:

  • Focus on Sustainability: By targeting scalable and sustainable yield sources, CIAN ensures long-term viability.
  • Eliminating Mismatches: The layer resolves disparities between yield sources and assets, optimizing efficiency.
  • Dynamic Optimization: Through decentralized (re)matching of assets with various yield sources and strategies, CIAN maximizes APY for users.

The CIAN Advantage#

CIAN’s yield layer isn’t just another DeFi protocol — it’s a game-changer for both established and emerging platforms. Here’s why:

1. Specialized stETH Yield Layer: CIAN has developed a bespoke yield layer for Lido’s stETH, allowing users to stake their stETH and access multiple stETH-aligned LRTs as additional yield sources. This innovation not only enhances yield opportunities but also maintains alignment with Lido’s ecosystem.

2. Expansion to BTC LRTs: CIAN is rapidly broadening its horizons, developing yield layers for top Bitcoin LRTs. This expansion significantly widens CIAN’s potential user base and total value locked (TVL).

3. Multi-Billion Dollar Potential: With its innovative approach and rapid expansion, CIAN is positioning itself as a potential multi-billion dollar DeFi powerhouse.

Architectural Deep Dive#

CIAN’s Yield Layer architecture is a marvel of DeFi engineering, comprising four key modules that span both the DeFi stack and traditional CeFi markets:

Figure 2: Architectural overview of CIAN’s Yield Layer

1. Yield Source Consolidation: This module aggregates yield opportunities from various DeFi protocols, centralized exchanges, and traditional finance instruments.

2. Yield Source Reorganization: Here, the consolidated yields are analyzed, optimized, and restructured for maximum efficiency.

3. Yield to Token Redistribution: This module handles the fair and transparent distribution of generated yields to LRT holders.

4. Bridging Abstraction: Enabling seamless interoperability between different blockchain networks and finance systems.

Functional Breakdown#

Functionally, the LRT yield layer operates as a vertical layer with two primary segments:

1. Asset Allocation Module

Think of this as the brain of the operation. It’s a sophisticated multi-signature wallet that:

  • Dynamically distributes depositors’ funds across various strategies
  • Ensures robust security through multi-party consensus for fund allocation and parameter changes
  • Optimizes returns while maintaining strong asset protection

2. Strategy Building Module

This is where the magic happens. Various strategy contracts receive allocated assets and put them to work:

  • Performs specific asset operations (investing, trading, lending)
  • Generates returns based on predefined strategies
  • Ensures full transparency with all contracts viewable on the blockchain

High-Yield Strategies: A Closer Look#

CIAN has developed two cutting-edge strategies designed to maximize yields. Let’s break them down:

Recursive Restaking Strategy

Figure 3: Visualization of the Recursive Restaking Strategy

How it works:

  1. User deposits 1 LRT into the Recursive Restaking vault

  2. The vault uses this 1 LRT as collateral to borrow 9x ETH from lending protocols

  3. The borrowed ETH is staked back into the LRT protocol, generating 9x more LRT

Result:

  • Users receive 10x LRT yields + 10x LRT supply yield on the lending protocol
  • The cost is the 9x borrowing rate

APR Estimates:

  • Organic APR: 18.41% + 10x restaking points rewards (Symbiotic + Mellow)
  • Bullish Scenario: 822.41%
  • Base Scenario: 248.41%
  • Bearish Scenario: 202.41%

Hybrid Long-Short Strategy

Figure 4: Visualization of the Hybrid Long-Short Strategy

How it works (using ETH as an example):

  1. User deposits 1 LRT into the Hybrid long-short strategy vault

  2. The vault uses this 1 LRT as collateral to borrow ~1.35x LRT-valued stablecoin

  3. 80% of the borrowed stablecoin is exchanged back to LRT (generating 1.08x more restaking yield)

  4. The remaining 20% is used as margin to open a 4x short position, covering the extra long position

Result:

  • APY is 2.08x restaking yield + 1.08x funding rate
  • The cost is the borrowing rate of 1.35x stablecoin debt

APR Estimates:

  • Organic APR: 17.63% + 2.08x restaking points rewards (Symbiotic + Mellow)
  • Bullish Scenario: 184.86%
  • Base Scenario: 65.47%
  • Bearish Scenario: 55.90%

Risk Management: Protecting Your Assets#

While CIAN’s strategies offer impressive yields, we’re equally committed to robust risk management. Here’s how we protect your assets:

1. Smart Contract Risks

Mitigants:

  • Multi-sig contracts for enhanced security
  • Expert reviews by authority organizations

2. Liquidation Risks

Mitigants:

  • 24/7 LTV Monitoring through in-house strategies
  • Automatic Deleveraging to maintain safe collateral levels

3. Depeg Risks

Mitigants:

  • Automatic asset reallocation to liquidity pools for price re-pegging
  • Transparent governance with 48-hour voting periods for major changes

The Road Ahead: CIAN’s Future#

We’re not stopping here. CIAN’s roadmap is packed with exciting developments:

1. Omni-Chain Support: We’re expanding to support all networks, with a focus on BTC and Solana ecosystems.

2. Real-World Asset (RWA) Integration: Building on our successful PYUSD long-short strategy, we’re deepening our collaboration with PayPal to explore new RWA opportunities.

3. User-Friendly Interface: We’re revamping our website to make DeFi accessible to newcomers, allowing easy asset management and strategy deployment with just one click.

Conclusion#

CIAN’s LRT yield layer represents a quantum leap in DeFi yield generation. By consolidating, optimizing, and redistributing yields across the crypto landscape, we’re not just improving returns — we’re reshaping the future of decentralized finance.

Ready to maximize your crypto yields? Join CIAN today and experience the future of DeFi.

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