move our usdc-avax JLP to yeti.finance

GM Yetis.

The proposal: move our usdc-avax JLP to yeti.finance to increase our yields by farming $yeti.

Normally, a portfolio move like this wouldn’t require an official vote, but due to the additional risk in this particular case, we thought it be best practice to do so.

We are currently not earning farming rewards on our JLP, and the opportunities on Trader Joe are quite saturated. The APY on Yeti.finance YUSD Curve pool is currently 42% + whatever trading fees we would earn from the USDC-AVAX JLP, which would bring it to around 55% in total. If we go bull, we can expect the APY from trading fees to increase substantially. In addition to this, we would also earn trading fees from the curve pool (tiny).

How does it work? We take our avax-usdc JLP and deposit it into yeti.finance. We mint (borrow) YUSD against this position at a collateral ratio of 220%, which is quite conservative. Then we have 2 options:

1. We take this newly minted YUSD and deposit it into the YUSD pool on Curve. Doing this would instantly increase our borrowed value by 0.71% through arbitrage in the curve pool, covering the initial minting fee of .5%. We take our Curve LP token and stake it on yeti.finance to earn the 42% farming rewards.

2. We take this newly minted YUSD and deposit it directly into the stability pool and also earn 42% in YETI. Also, if YUSD loses peg then our risk of liquidation is reduced.

Risks

• If the value of our LP token drops by 50% (basically if the price of avax drops by 75%) then our position would be liquidated.
• Depegging of YUSD (price going down) would affect the value of LP token negatively.
• Finally, exploits can happen and Yeti.finance will likely be targeted due its high TVL.

Overall, I think it would benefit us to do this as long as we are conservative with our leverage. I know it seems option 2 is the ideal choice, but in my experience, farming the LP pool directly is generally a better long term option.