NEW YORK, NY – (Newsfile Corp. – October 24, 2021) – Beaver Finance is a single-asset intelligent yield farming platform, the first to integrate DeFi liquidity mining with the options-based, state-of-the-art hedging solution Ephemeral Loss . According to Beaver Finance officials, the highly anticipated platform will be launched in mid-November. Now let’s explore the mysteries and excitements of the beaver world.
1. Introduction to the Beaver Finance Protocol and the team behind it
Beaver Finance provides a safe, worry-free and high and real yield strategy for crypto holders, users can stake single assets to participate in dual-asset yield farms and earn high returns on mainstream DEXs; and what sets Beaver apart from similar harvesting platforms is that Beaver hedges impermanent loss (IL) through a range of European options portfolios. Most mining aggregation platforms show the return rate without considering the hidden but also usually huge IL, while Beaver Finance addresses the IL headache through options to provide a true farming win rate.
There are two sections in the Beaver platform, Liquidity Providers (LP) asset pools for mining and Impermanent Loss Hedger (ILH) asset pools for hedging. Assets in the ILH pool will be used as capital to build an options portfolio to hedge IL from mining positions from the LP space. Assets deployed in ILH pools are guaranteed loss-free and those in LP pools are also hedged, allowing LP users to earn actual returns without being offset by temporary losses.
The founding team of Beaver Finance consists of Wall Street veterans as quantitative derivatives traders, scientists from renowned academic institutions, DeFi scientists as designers of several token economies and a team of experienced developers from Silicon Valley. This world-class team is dedicated to solving the problems of the infamous temporary loss and systematic risks in the AMM mechanism and creating the safest and most profitable return aggregation platform.
The story goes on
2. Motivation for Beaver Finance
First of all, the Beaver team noted that there is still a huge market for escrow of crypto assets. Many crypto owners are unable to find a safe and efficient single-asset revenue generation platform, while providing dual-asset liquidity for farming in DEXs comes with huge uncertainties stemming from the high volatility of cryptocurrencies and inconsistent losses associated with AMM result. Quite often, ILs even exceed mining profits, ultimately resulting in a negative return.
Diagram 1
As shown above, Uniswap is slipping from the TVL ranking and the fluctuation represents the escape of assets during the dramatic trends of the major cryptocurrencies.
APR/APY is the go-to indicator for liquidity providers. However, these attractive high-paying APYs displayed on DEXs or yield aggregators are all based on the assumption of the undamaged capital, which however is not viable for liquidity mining due to the inconsistent loss. Currently, no yield aggregator counts IL in their APR/APY, which gives investors the misinterpretation of the final yield when collecting farming tokens and principals, especially for newbies who are little aware of the destructive power of IL, they will surprisingly find that without constantly Pay attention to the exchange rate change and adjustment of positions, the eventual APY are never as pleasant as indicated on the platforms.
So, one of Beaver Finance’s initial motivations is to solve the aforementioned “false APY” problem once and for all. Because Beaver employs option strategies to hedge temporary losses, mining principals are fully protected. The actual yield is the same as the APY displayed on Beaver and investors can enjoy the harvest with peace of mind.
3. Similarities and differences between Beaver Finance and other earnings aggregators
Similar to platforms like Alpha Homora, Alpaca, etc., Beaver Finance allows users to stake single assets for high returns that are comparable to dual asset farms. There are now also special features that have been innovated by Beaver.
(1) Asset Allocation Engine: Dynamically combines equal tokens from LP pools through algorithms to provide liquidity on large DEXs, allowing users to automatically enjoy the high returns of dual token LP farming in single token staking mode to achieve. In contrast, Alpha Homora and similarities would add an extra swap step to form the pair, which would immediately cause the asset value to depreciate and the exchange rate to rise, resulting in IL.
(2) Impermanent Loss Hedging Engine: Powered by Asteria Finance Lab, protects LP assets from agricultural positions by building European option portfolios to hedge against IL. With ILH, Beaver Finance would be able to protect LP capital and provide users with a true P&L rate in wealth management operations.
4. Competitive Advantages of Beaver Finance
Beaver has 5 main competitive advantages compared to other revenue aggregators:
(1) Simplicity
Beaver integrates multiple liquidity pools of major DEXs and provides dynamic APY updates providing a fully automated and one-stop service for Single Token Staking + Token Pairing + LP Provisioning + Yield Farming + Asset Adjustment, giving users the Navigating between different DEXs and liquidity saves pools to perform complicated mining operations.
(2) High returns
Compared to the low returns of single token staking on DEXs or other yield farming protocols, built on a solid theoretical foundation and extensive DeFi real-world experience, Beaver’s strategies optimize asset allocation efficiency and deliver high returns that can be achieved with Dual token farming are comparable.
(3) Lossless hedging
Based on the options portfolio hedging module developed by Asteria Finance Lab, IL hedgers can enjoy the returns of options market makers without major damage; while helping to minimize IL on LP asset pools. Under extensive backtesting across multiple simulations, Beaver’s hedging model not only eliminates capital losses for ILH pools, but also realizes stable returns.
(4) Professional
Beaver’s finance team consists of experienced Wall Street derivatives quants and traders, researchers from respected academic institutions, and a technical team that has previously led the development of several top DeFi projects. Hedging algorithms are based on the solid theories of the Carr-Madan formula and the classic Black-Scholes-Merton model, backtested in multiple scenarios to optimize functionality and minimize user costs.
(5) Security
System and asset security has top priority at Beaver Finance: the financial models and investment strategies are repeatedly backtested by the professional team; Smart contracts are coded and checked by security experts, and audits are performed by leading blockchain security labs. Precautionary techniques are applied for a number of security issues such as re-entry, arithmetic overflow/underflow, default visibilities, and floating point numbers and precisions, etc.
5. How do users participate in Beaver Finance?
Beaver Finance aims for a simple, zero-based user experience. In general, users can choose to play either or both roles: farmer and hedger.
Farmer => LP Mining (LP) section:
Beaver Finance would support cryptocurrency pairs with high yields and a level of security on major DEXs. Users can select any pair of tokens and deposit both assets into Beaver LP pools and let the platform do the rest of the work like token pairing, LP provisioning and staking for mining to do it automatically.
Hedger => Section Impermanent Loss Hedger (ILH).
ILH pools capital is used to hedge a possible temporary loss of LP mining positions. Options portfolios are constructed through rigorous mathematical models and automatic delta neutral hedging is also performed simultaneously, which not only protects LP assets from IL, but also ensures the stability of ILH pools.
6. Beaver’s Impermanent Loss Hedging (ILH) Engine
Beaver hedges temporary losses from liquidity reduction through a range of European options portfolios backed by Asteria Finance Lab.
Mathematical principle: Carr-Madan formula
The basic concept is that for any return structure f(ξT) in terms of ξT that expires at time T, it can be realized by constructing a European options portfolio with ξT as target and expiry date T under the condition of f(ξT). ) is a second-order derivative that is essentially a static investment strategy.
Don’t be put off by the mathematical description above, in short it has been mathematically proven that the IL caused by the X*Y=K model can be hedged by a number of counter-directional options.
Based on this, the classic Black-Scholes-Merton option pricing model is applied to calculate the cost and hedging outcome:
‘
Diagram 2
During the back tests of three-year data (2019, 2020, 2021), the average cost is 0.7% and the hedging completeness is 99.8% (blue line), compared to the unhedged asset loss (yellow line), the LP main capital is almost lossless.
The Beaver team also performed detailed backtesting on the principles of staking in the ILH pool and according to the backtesting data, Beaver guarantees that the single token staking in the ILH pool is lossless.
7. Current phase, vision and future plans
Beaver Finance is thoroughly audited by a number of reputable security labs and will be officially launched at BSC in mid-November! First believers and early contributors to multiple Kickstart events will receive surprising rewards! By the way, the previous TVL contributors can not only earn single-asset staking risk-free profits, but also get higher points, similar to the mechanism of DYDX, and would eventually be rewarded in the Beaver ecosystem.
Beaver Finance strives to integrate the best-in-class profit and hedging models in traditional finance with decentralized technologies and build a secure and trusted platform for aggregating single asset returns. Through thorough research and understanding of the options, Beaver Finance has eliminated the risks associated with liquidity extraction and offers a worry-free passive income channel to all cryptocurrency holders.
Beaver Finance team will continuously work with Asteria Finance Lab to build DeFi infrastructures like stable coin swap and multi-asset management based on derivatives. At the same time, the Beaver team will continue to integrate more advanced blockchain developments such as NFTs and financial strategies, providing users with comprehensive one-stop financial services. For more information, visit the website https://beaver.fi/ and join Telegram https://t.me/beaver_finance for the latest updates.
Contact:
Beaver Finance / beaver.fi
Michael Li
+1 773 895 4530
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/100675
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