Coinbase And Pantera Backed, Staked, Launches RAY Protocol To Maximize Staking And Lending Yields
The decentralized finance (DeFi) industry is growing at an astronomical pace and developers are finding better and more efficient methods to increase yields for these assets. Staked –a DeFi company that raised $4.5 million in a seed round funding backed by Pantera, Coinbase and Winklevoss Capital among others – is launching its first automated Robo Advisor for Yield (RAY) service to maximize returns on staked and lending tokens.
The new platform will leverage a smart contract that switches funds across various DeFi options to catch the best return automatically. The New York based firm announced the RAY platform will benefit Ethereum (ETH), US Dollar Coin (USDC) and Dai (DAI) hodlers who lend and stake their coins.
“If you hold ETH, you can earn more ETH. If you hold DAI, you can earn more DAI.” –
Staked CEO, Tim Ogilvie
How the Robo Advisor for Yield (RAY) works
In its official website Staked claims to assist “institutional investors reliably and securely compound their crypto by 5% – 100% annually through staking and lending.” The latest RAY development will pool together ETH, DAI and USDC users’ funds into asset specific pools. Once pooled, a smart contract will execute to invest a fraction of all of the investors’ funds into staking and lending contracts with the best yield at any moment.
The RAY project incorporates three smart contracts at the moment with more to be added in the future if the test protocol will be successful. The three include Compound, a money market contract and two derivative protocols – DYDX and BZX.
Imagine that at the moment, the RAY protocol has a pool of $100,000 USD worth of DAI and the smart contract is investing in the Compound, which offers a yield of 5 percent. If the rates for the BZX derivative spike up in the next minute to 8 percent, RAY will automatically execute. This moves part or all of the $100,000 USD of DAI to BZX till the amount on the derivative is exhausted.
This means the investor will earn more yield that they would have in the Compound protocol.
RAY Still in Development
RAY smart contracts are still in development hence possibility of risks of loss of funds and security risks. The official report states,
“The RAY smart contracts (and affiliated opportunities like Compound, dYdX, bZx, et al) are experimental. You could lose all of your funds if the smart contracts are hacked or the funds are frozen. Please do your own research, review the code, and help make RAY safer for everyone using it.”