maxAPY - Optimized Yields on Autopilot: What You Need to Know
Optimized Yield Generation, V1 Launch, & More
Markets are up, and the total crypto marketcap is rapidly increasing, now back above $3T. While crypto asset prices remain volatile, there is more opportunity in DeFi than we’ve seen in some time…
The scope of DeFi protocols has expanded over time, offering more opportunities to users and minimizing friction in the yield farming space. While the onchain experience is definitely less cumbersome than it was in the past, manually scouting yields across chains, rebalancing, and managing positions is still an unnecessary pain.
In today’s edition, we’ll discuss maxAPY’s approach to generating yield for users. As the name suggests, maxAPY aims to source the maximum return for a user’s deposited tokens, supporting assets across 9 EVM chains. Now, maxAPY has gone live with its V1…
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Background on maxAPY
maxAPY serves as a user solution for earning yield, unifying earning opportunities across chains. maxAPY uses its algorithmic approach to simplify the process of maximizing yield generation for users, handling strategy formation and management as users simply deposit into a vault.
One of the areas of opportunity with maxAPY is its crosschain native approach. The protocol sources strategies across 9 EVM chains, automating bridging so it is not a barrier for the APRs that a user can achieve. The protocol doesn’t just determine one specific opportunity on a chain at a time, strategies might consist of using farms across chains in a sequence.
This is a key differentiator, as many yield aggregators are often limited to sourcing yield from one chain. This makes it inconsequential which chain a user initially deposits from; the best yield will be sourced regardless, even if it is on another chain.
On the backend, this is done through Superform, which finds the best route for bridging and swapping liquidity across chains. This handles the more menial tasks involved with routing liquidity to the best place for it, though the team’s proprietary approach is what determines how deposits are actually allocated.
When it comes to the generation of new strategies, maxAPY’s algorithm scans potential opportunities, optimizing for top performers. Protools integrated includes lending platforms, DEXs, yield aggregators, LST protocols, and more. This includes many projects in each sector, with the list of integrated projects continually expanding.
This expansion process broadens the scope of yield generation, though the team takes security and the integration process for new projects very seriously. For allocating among existing projects, a combined process that includes algorithmic scanning and manual verification is performed on a daily basis, ensuring that the best yields possible are available.
When it comes to allocating capital, maxAPY takes a risk-adjusted approach, weighing maximum yield potential, risk exposure, and potential gas costs among viable strategies. This is crucial for cross-chain yield sourcing, as gas costs and bridging fees could add up.
After a user is already allocated, the process doesn’t stop here. maxAPY’s automatic rebalancing pivots as needed to ensure the optimal risk-adjusted approach is taken at any given time. As we’ve seen in the past weeks, market conditions can change on a dime, which can influence risk tolerance and the availability of yield. Last but not least, maxAPY will automatically compound returns, putting earnings to good use with continuous compounding.
This all aims to maximize yield for users with the least manual effort exerted, letting the protocol itself and the maxAPY team handle this instead. From the point of first deposit to the continuous management of liquidity, maxAPY does its best to create a system that is friendly to capital, creating as few reasons as possible for it to leave the protocol.
maxAPY uses the tools available to it to tackle the problems related to execution when it comes to yield aggregation. Liquidity fragmentation has been a problem for quite some time, with new protocols and chains springing up, diverting attention as well as capital. maxAPY can help to fill the needs of users in the modern-day DeFi landscape, countering paint points that exist when this process is taken on manually. maxAPY’s automated bridging and hybrid approach to sourcing yields for users helps to separate its offerings from yield aggregators that might be more one-dimensional…
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Disclosures
Alea Research is engaged in a commercial relationship with maxAPY as part of an educational initiative, and this newsletter was commissioned as part of that engagement. This content is provided for educational purposes only and does not constitute financial or investment advice. You should do your own research and only invest what you can afford to lose. Alea Research is a research platform and not an investment or financial advisor.
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