Binance AMA Template - CVP.pdf
Positioning: For PowerPool, the current emphasis is on rolling out the PowerAgent cross chain automation network to power the next generation of multi-chain DeFi vaults and Indices. So far in DeFi, degens have been yield-farming single chains mostly manually, without using automated programming logic and chronological, time-based automation across chains. This will change in a multi-chain, bridged and highly-volatile battle for DeFi TVL/liquidity across L1s and L2s.
Q&A
Q1: Why did PowerPool originally pioneer on-chain automation for DeFi with the PowerAgent Network? Where is development of PowerAgent going?
A1:
Q2: What is intrinsic yield vs extrinsic yield, and which DeFi tokens auto-harvest intrinsic yield?
A2: A composable token like the $BSCDEFI index token represents a broadly-diversified basket of other underlying BSC DeFi tokens and can generate yield extrinsically and intrinsically. Staking, LP-ing, lending or otherwise locking the $BSCDEFI token can generate extrinsic yield for the tokenholder. But the underlying constituent tokens inside $BSCDEFI like CAKE, XPS, EPS and others can also generate intrinsic yield that only PowerPool via the PowerAgent Network can auto-harvest on behalf of the tokenholder. The total returns to the $BSCDEFI tokenholder include both intrinsic and extrinsic yield. Only PowerPool can do this, initially on BSC with $BSCDEFI, but soon on other chains as well.
Q3. How does PowerPool DAO decide which BSCDEFI tokens to operate auto-harvesting vaults for?
A3: Composed basket tokens like $BSCDEFI allow broadly-diversified thematic bets on the evolution of DeFi on BSC, while also auto-harvesting intrinsic yield. The top-weighted tokens in the basket, like CAKE, Venus and Elipsis are the first to have dedicated vaults. Dedicated vaults for other tokens in the basket offering attractive yields can be added as part of the on-going $BSCDEFI up-weighting/re-balancing deliberations in the PowerPool DAO. Members of the PowerPool DAO can win rewards for proposing approved new vaults and re-weightings.
Q4. How are the tokens/weightings/vaults underlying $BSCDEFI managed over time to achieve the twin goals of yield and diversification?
A4: Thematic tokens like $BSCDEFI have to strike a balance between broad diversification and maximising yield from within the basket. It is not possible to maximise both. Yields and TVL for the tokens in the basket are volatile, and it is the mission of PowerPool DAO to keep an eye on this balance, and propose/approve periodic re-weightings and new vaults. It is now possible for $BSCDEFI basket token holders to increase their yield (but reduce their diversification) by adding higher yielding single tokens directly to the vault, rather than buying more of the entire basket.
Q5. What if an investor wants to shift towards more yield from one or more constituent $BSCDEFI tokens, like CAKE or XVS, but does not care about holding a broadly-diversified, actively-managed basket of high potential BSC tokens like $BSCDEFI?
A5: PowerPool has moved to a modular vault design to speed up launching vaults supporting auto-harvesting intrinsic yield on BSC and other EVM-compatible chains/layers using PowerAgent. The new vaults will also allow investors to stake single tokens like CAKE, XVS, EPS etc. to personalise their yield/diversification exposure achieved by holding just $BSCDEFI, or indeed even without holding any $BSCDEFI at all.