DAIKI holders, today we are excited to announce Rum Vaults: a new product in Daikiri Finance’s ecosystem and The First Yield Aggregator on Harmony.
First of all, what’s a Yield ̶A̶l̶l̶i̶g̶a̶t̶o̶r̶ Aggregator? Yield aggregators allow users to earn compound interest on their crypto holdings by automatically maximizing rewards from various liquidity pools (LPs) and automated market making (AMM) projects.
Through a set of optimization strategies secured by smart contracts, Rum Vaults automatically increase your deposited amount by compounding arbitrary yield farm reward tokens back into your initially deposited asset. Despite what the name “Vault” suggests, your funds are never locked in and you can always withdraw at any moment in time.
Rum Vaults can be considered “smart farms” where you don’t need to manually harvest your rewards, sell half, add liquidity again and re-stake a particular LP token. Furthermore, Rum Vaults can also be used with single-token pools and farms, so you won’t need to deposit more or compound your rewards yourself.
If you are a Yield Farmer already you probably are familiarized with the return in a year being reflected as annualized percentage rate (APR), as the native token reward of most farms does not auto-compound. With auto-compounding the return from your initial deposit is automatically added back into your initial investment, exponentially increasing your total yield. To express the annualized rate of return, including the compounding we use the annualized percentage yield (APY) formula.
Thanks to Harmony’s low fees, Rum Vaults auto-compound your yield every minute and you don’t have to pay fees to do so. By using an automated Yield Aggregator you will obtain the best yields on Harmony without having to go through the burden of manually harvesting your rewards, selling half and providing liquidity every minute.
Rum Vaults won’t have deposit or withdrawal fees. This means it will cost you 0% to either deposit or withdraw funds. Only a 5% fee will be applied to profits to burn $DAIKI and redirected to Mixology pools to allow $DAIKI holders to earn part of the profits from Rum Vaults by staking $DAIKI.
Turning APR into APY for all farms on Harmony
Yield Aggregators implement “strategies”, hard-coded into smart contracts, to allow users to maximize yield farming on multiple types of farms or yield-generating protocols. In this way, Rum Vaults implement different strategies to allow Yield Farmers to compound their staking on multiple incentivized liquidity pools and farms on Harmony, and to turn APR into APY. With Rum Vaults, yield farmers will be able to auto-compound external farms from pools like ViperSwap, MochiSwap, among others, to maximize their yield.
APR + compounding = APY
Buy back & Burn Mechanism
Rum Vaults implement a mechanism to use part of the profits to buy back $DAIKI tokens on Daikiri Swap and then burn them. This creates a constant demand pressure and removes DAIKI tokens out of circulation maintaining scarcity and adding value for DAIKI stakeholders.
Mixology Pools Integration
As mentioned previously, part of the profits from Rum Vaults will be redirected by the smart contracts towards Mixology pools to allow users to stake DAIKI to earn other tokens like ONE or VIPER, for example. Furthermore, proof-of-work miners will be able to mine these rewards with their CPUs too, by holding a certain amount of DAIKI tokens as collateral.
Rum Vaults (the First Yield Aggregator on Harmony) are launching Monday July 19th at 5:00 pm GMT so get ready to turn your APR into APY by farming on “smart farms” with auto-compounding.