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How to earn rewards using PowerPool’s Yearn Lazy Ape Index

How to earn rewards using PowerPool’s Yearn Lazy Ape Index

Derrick Nguyen

August 16, 2021

In this post, I’ll be providing a step-by-step guide on how to use your yvCurve-LUSD in PowerPool’s Yearn Lazy Ape Index! 🐵

Before we get started:

What is yvCurve-LUSD?

yvCurve-LUSD is the share token that users receive for depositing to Yearn Finance’s crvLUSD Vault, which deposits to the LUSD 3Pool and manages CRV rewards automatically. If you aren’t familiar with the crvLUSD Yearn Vault, you can find a detailed guide here.

What is PowerPool?

PowerPool is a meta-governance protocol based on an ecosystem of smart indexes. It offers productive indexes to its users and provides a new level of decision-making for the DeFi ecosystem.

What is the Yearn Lazy Ape Index (YLA), how does it work, and what are the benefits?

The Yearn Lazy Ape Index (YLA) is one of the most interesting indexes that PowerPool offers, and it allows for diversified exposure to four different Vaults in a single token:

  1. yvCurve-LUSD (😎)
  2. yvCurve-USDN
  3. yvCurve-USDP
  4. yvCurve-BUSD

Yearn Vault APYs constantly fluctuate, so this index periodically re-allocates the pooled funds and assigns new weights to maximize returns. This means Yearn Lazy Ape minters/holders can quite literally be “lazy”, save on gas costs, and rest assured knowing their position is being actively managed.

For an in-depth explanation, view the diagram and linked resource below.

Source: Yield Maximization Strategy for Yearn Lazy Ape

When depositing yvCurve-LUSD into the Yearn Lazy Ape Index, you’re providing liquidity to the index and receiving YLA in return. From the YLA blog post:

yEarn vaults accumulate profits inside the YLA pool, which means that Net Assets Value (NAV) inside the pool is constantly growing; hence the price of YLA is appreciating and earning you returns by just sitting in your wallet.

Of course, you could always just buy YLA to get exposure to the index, but if you’re reading this, you’ve likely already deposited into the crvLUSD Vault and wondered: What can I do with this yvToken? 💭

With that said, let’s start the tutorial 👇

Quick Disclaimer: This tutorial is not a recommendation and interacting with DeFi protocols can be risky. The Yearn Lazy Ape Index is an independent team and product, please do your own research and use your best judgement.

How to use the Yearn Lazy Ape Index

Feel free to browse their homepage, but first you’ll need to access the Yearn Lazy Ape Index as displayed below:

Under the page titled “Smart DeFi Indices”, you’ll see three different APYs for the Yearn Lazy Ape Index:

  • Basic APY: This represents the APY you’ll earn from only depositing into the YLA Index. At the time of writing, the APY is ~16%.
  • CVP Liquidity Mining APY and CVP Boost APY: We’ll discuss these two in the last section. For now, ignore these.

Providing Liquidity

On the Yearn Lazy Ape Index page, you’ll notice multiple statistics. I won’t get into them here since PowerPool does an amazing job of providing that info on the UI.

To deposit to the index, you’ll need to find the “Supply” Tab. You can provide liquidity here in three ways:

  1. ZAP: This allows you to provide liquidity with USDC and the protocol takes care of the rest (i.e. Deposits the USDC to Curve ▶️ Deposits Curve LP tokens into Yearn ▶️ Deposits yvTokens into the YLA Index ▶️ Sends $YLA to your Ethereum Wallet). If you have some USDC but not the four yvTokens, you’ll want to use this.

🗒 Note: This process (i.e. executing the deposit) may take time, depending on the distribution period (every 24 hours) or if the limit is reached. If users change their mind before the deposit is executed, they can click “Release deposited USDC” to pull their USDC out of the contract.

2. ⭐ Single Asset: This allows you to provide single-sided liquidity (e.g. Only yvCurve-LUSD). For our ecosystem, you’re most likely to choose this option since you may already be in the crvLUSD Yearn Vault.

3. Multi Assets: This allows you to deposit any combination of the four yvTokens (e.g. 1000 yvCurve-LUSD, 1000 yvCurve-USDP).

After choosing your preferred method, the rest is easy. Input the values, approve the transactions, and then you’ve minted YLA!

Over time, your gains (or losses) will appear on the right-hand side as displayed below:

In the event you decide to withdraw liquidity, the choices are the same. Using the “Redeem” Tab, users can ZAP out, withdraw in a single asset, or withdraw in multiple assets.

🗒 Note: Users pay a 0.1% fee when supplying or withdrawing liquidity

Staking your YLA

If the Basic APY from depositing to YLA wasn’t enough, you’re in luck! Remember the two APYs I left out? :

  • CVP Liquidity Mining APY: This represents the APY that users will earn from depositing their newly minted (or bought) YLA in order to farm PowerPool’s governance token, CVP. As of now, the APY is close to 0% due to a low allocation.
  • CVP Boost APY: This represents the additional APY that users will earn from depositing CVP along with YLA. The “boost” was implemented to incentivize $YLA growth, and the maximum APY users can earn from this is ~28% at the time of writing.

🗒 Note: Users will first need to acquire CVP if seeking the boosted APY. Of course, this is not a recommendation, please do your own research.

To earn the boosted rewards, you’ll need to head over to the YLA Farm, or click here.

You might have noticed that I increased the CVP amount from the minimum to the maximum in the example above, and that the APY doesn’t increase when doing so. PowerPool didn’t want CVP whales dominating the farm, so it doesn’t matter how much CVP you deposit — meaning you’ll earn the same Boost APY as long as you deposit the minimum of 0.014 CVP per 1 YLA 💡

After confirming the deposit, your rewards will accrue in CVP and they’ll be vested over 10 weeks from the moment they’re earned. Here’s an example from their documentation:

If you were to earn 10 CVP per day for 30 days, by the end of the 30 days you would have earned 300 CVP, but not all 300 would be available for withdrawal. This is because CVP vests over a 10-week period after it is earned. So the last CVP that you earned on the 30th day would vest 10 weeks later.

Whew, we made it! This tutorial should have covered everything you needed to know before getting started with the Yearn Lazy Ape Index. To learn more about their project, check out these resources:

Liquity Resources:

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