Yield Generation

Avant Protocol generates yield through a dynamic and actively managed multi-strategy framework. This framework is designed to be adaptable to evolving market conditions by diversifying capital across several distinct sources of on-chain yield.

The protocol's treasury is allocated to strategies that offer the optimal risk-adjusted return. This approach avoids dependence on any single yield source and aims for consistent performance over time.

Transparency in Strategies

For full transparency, Avant's metrics page provides a detailed breakdown of assets, their location across various chains, and the specific protocols used in our strategies.

Core Strategy Categories

The protocol's yield-generating activities are organized into the following primary categories.

Market-Neutral Basis & Funding Strategies

This category includes strategies designed to be uncorrelated with directional market movements. A primary example is the basis trade, which derives yield from funding rates in derivatives markets. The strategy involves holding a spot asset while simultaneously maintaining a short futures position of an equivalent size, capturing the difference (the basis) as profit.

These strategies are designed to be market-neutral, meaning it profits from market structure rather than price direction.

DeFi Liquidity and Lending

The protocol deploys capital as liquidity into carefully selected decentralized exchanges (DEXes) and as collaterals on established lending protocols like Aave. By providing liquidity and collaterals, the protocol earns a share of the trading fees generated by that pair's volume or an interest from borrowers. We identify the safest and most efficient venues to generate yield from core DeFi activities.

In addition to these public on-chain activities, this category also includes private liquidity deals. These are negotiated arrangements where the protocol provides liquidity directly to other projects or protocols, often securing unique yield opportunities not available on the open market.

Yield Token Arbitrage & Trading

Yield token related strategies actively engage with sophisticated yield markets like Pendle to capture enhanced returns. This involves strategies that capitalize on the native mechanics of yield-bearing assets. This includes trading the separated principal and yield components of certain assets, allowing the protocol to capture value from market inefficiencies and time-based arbitrage opportunities related to future yield streams.

Note on Strategy Flexibility

The categories listed above represent the protocol's primary areas of focus but are not an exhaustive list. To adapt to evolving market conditions, Avant Protocol reserves the right to engage in any new or emerging strategy that is deemed to have a good risk/reward profile.

Strategy Composability and Management

A key feature of the protocol's architecture is strategy composability. Individual strategies can be combined to enhance capital efficiency and generate layered yield.

This dynamic allocation requires active management. The protocol relies on different expert trading partners to analyze, execute, and monitor these strategies, including identifying and safely acting on transient market opportunities.

The aggregate performance of all strategies determines the yield distributed to the holders of the protocol's yield-bearing tokens (e.g., savUSD, savBTC). The live Annual Percentage Yield (APY) for all products is available on the protocol's main dashboard.