Boosted Yield
When liquidity is deposited into Unlockd pools, it serves as the source of funds for borrowers accessing loans.
However, there are instances when the utilization rate is low, resulting in idle liquidity within the pools.
To maximize the potential of this idle liquidity, Unlockd has introduced the Boosted Yield program. Through this program, the idle liquidity is routed towards the most secure and trusted protocols in the DeFi landscape, engaging in ultra-low-risk farming strategies.
The additional yield generated from these strategies is mainly utilized to boost the yield accrued by lenders when the utilization rate is low. This ensures that lenders benefit from increased returns on their deposited funds .
Additionally, this extra yield will also be directed towards reducing the interest paid by borrowers, providing them with a cost-saving advantage when repaying their loans, when the utilization rate grows.
| Utilization Rate | Boosted Yield for Lenders / Reduced Interest for Borrowers |
|---|---|
0% | 100% | 0% |
10% | 77.78% | 22.22% |
20% | 55.56% | 44.44% |
30% | 33.34% | 66.66% |
40% | 11.12% | 88.88% |
45% (Optimal UR) | 0% | 100% |
50% | 0% | 100% |
60% | 0% | 100% |
70% | 0% | 100% |
80% | 0% | 100% |
90% | 0% | 100% |
100% | 0% | 100% |
Dynamic Strategy
To enhance the efficiency and effectiveness of the Boosted Yield program, Unlockd has implemented a robust system within the smart contract, developed by our Data Science team. This system incorporates continuous screening of potential strategies, self-evaluation, and optimization of routes and pools, alongside manual switches when necessary.
By employing this mechanism, Unlockd ensures that the yield farming strategy is diversified across various protocols and pools while maintaining the highest level of risk-reward optimization. Furthermore, this dynamic approach allows the program to adapt to the ever-changing market conditions, ensuring that the strategies employed are always aligned with the most optimal opportunities.
This continuous monitoring and adjustment mechanism guarantees that the yield generated by the idle liquidity remains maximized and consistently caters to the specific needs and benefits of both lenders and borrowers within the Unlockd ecosystem.
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