At DCA.Monster, we are thrilled to announce the implementation of a groundbreaking feature: Native Yields for native currencies and ERC20 tokens using the Cartesi Rollup. This enhancement will significantly improve capital efficiency and utility for all users of Cartesi’s App Specific Rollups like DCA.Monster. Here’s why this is a game-changer for decentralized finance and our platform.
Revolutionizing Capital Efficiency with Native Yields
Native Yields represent a significant advancement in how users can maximize their assets when interacting with DeFi decentralized applications. This feature enables users to earn passive yields on their tokens while simultaneously utilizing them in dapps running in their Cartesi rollups. This dual benefit is achieved without compromising the availability or security of the tokens in the main chain if users want to exit.
How Native Yields Work in Practice
For Users Swapping
For users engaging in stream swapping on DCA.Monster, Native Yields offer a powerful way to maximize asset efficiency. When a user stream swaps, the tokens are also simultaneously staked or used in liquidity provision protocols on the main chain, generating additional yields. This dual utilization means that as the stream swap progresses, users earn passive yields. After the stream swap period ends, the user receives a payout that includes both the results of the stream swap and the accumulated native yields. Additionally, users have the flexibility to cancel their ongoing stream swap at any time, reclaiming their tokens and prorated rewards.
For Liquidity Providers
For liquidity providers on DCA.Monster, Native Yields significantly enhance the returns on their contributions. When a user provides liquidity by depositing tokens into the YieldBridge, these tokens are immediately put to work within the DCA.Monster Rollup. Simultaneously, the same tokens are staked or used in liquidity provision protocols on Layer 1/2, generating additional yields. This dual utilization means that as their liquidity provision continues, they earn passive yields from both DCA.Monster activities and native staking on L1.
The Concept of Virtualized Liquidity
One of the most exciting aspects of Native Yields in Cartesi DApps is the concept of virtualized liquidity. This feature allows liquidity to be utilized in multiple places simultaneously, maximizing the efficiency of your assets. Here’s how it works:
1. Deposit Tokens in YieldBridge: Users deposit their tokens, such as ETH or any ERC20 token, into the YieldBridge. This smart contract handles the allocation and staking of these tokens into various yield-generating protocols like AAVE, Compound or Morpho Blue.
2. Tokens are Available for Use in Rollup: Once deposited, the tokens are immediately available for use in the Rollup. This ensures that users can leverage their assets within the Rollup DApp, such as engaging in trades or liquidity provision in DCA.Monster.
3. Tokens Generate Fees in Parallel on main chain: While the tokens are being used in the Rollup, they simultaneously generate fees and yields in main chain through staking and liquidity provision. This means that users benefit from returns generated in both the base layer and rollup environments.
4. Users Can Exit at Any Point: Flexibility is a key advantage. Users can exit their positions and claim their tokens at any point without losing the accrued yields. The YieldBridge and InputBoxWrapper ensure seamless transitions and automatic yield claims, maintaining balance integrity across L1 and L2.
This concept of virtualized liquidity optimizes capital utilization, providing users with compounded benefits from base layer and rollup activities. By integrating this feature, DCA.Monster enhances liquidity productivity, offering superior returns and flexibility to its users.
Stay Tuned
Stay tuned as we unveil the mechanisms behind generating and synchronizing native yields within the rollup. AMM Users, liquidity providers, and Cartesi builders, get ready to be excited!
