Automated Strategies

Introduction

Introducing Amulet’s automated yield strategies, powered by the latest in Web3 and vault technology. It works as an on-chain asset manager with 24/7 security, maintained by a dedicated team of DeFi and security experts and eventually to be governed by AMU holders.

Amulet’s strategies simplify and optimize DeFi yields for everyone. It does this by automatically pooling users’ funds from their vaults for auto-compounding in top DeFi projects to reduce overall transaction costs. The auto-compounding frequency for each strategy is set to achieve the highest possible returns at the lowest cost for each user.

Another major and often overlooked cost to DeFi users when choosing a DeFi project is theft, often with catastrophically high losses, by cybercriminals. To reduce this cost, each strategy has been carefully vetted by our security experts and has preventive mechanisms and financial coverage built directly into their vaults under the AmuShield program.

How it Works

Taking Amulet’s ConvexCurveFRAX+crvUSD Strategy as an example, if a user deposits Convex LP into the vault, no further action is required and the user continues to earn yield from Convex under the protection of AmuShield with the added benefit of getting to earn governance power at the AMU farm. Otherwise, the user may deposit FRAX or crvUSD into the vault, which is then placed in the Convex yield aggregator’s Curve FRAX+crvUSD pool in exchange for Convex LP tokens held by the vault on behalf of its users. Convex then supplies the assets to the FRAX+crvUSD pool on the Curve yield platform as trading liquidity. CVX and CRV rewards as well as trading fees are generated by the Curve and Convex positions and collected into the vault. In order to gauge the strategy and the underlying protocols’ performance, Amulet monitors the health of Curve and Convex’s returns on-chain i.e. the amount and consistency of their emissions and the amount of trading fees generated versus the cost of supplying liquidity in order to gauge the strategy and underlying protocols’ performance.

In the meantime, the vault manager periodically sells the CRV and CVX rewards in the vault for FRAX or crvUSD and, together with the trading fees, deposits them back into Convex to accrue more returns. These steps, taken altogether, compound into higher returns on users’ deposits in the vault. If done manually by the user, it can be time-consuming and expensive, with the user having to repeatedly harvest, sell, and deposit their returns at a less than ideal frequency, all the while bearing the full cost in gas and any other transaction charges. On the other hand, Amulet’s vaults automate the yield compounding process at its optimal frequency, lowers the gas and transaction costs per user, and monitors the vault positions 24/7 for any attacks on the deposited assets. A small fee is charged by the Amulet Safety Fund and the Amulet Treasury on yields to provide coverage for users’ assets and fund protocol operations and development.

Boosted APY

To maximize yields for its users, Amulet brings efficiencies and incentives to the table, starting with optimizing base returns, followed by offering farming and governance incentives:

Stage	APY Details
1	Base APY: This refers to the base yield generated by the strategy from the underlying platform. Returns are enhanced through dynamic asset allocations, efficient auto-compounding, and socialized transaction costs.
2	Farm APY: LP Tokens received by users from depositing assets in vaults may be staked in Amulet's farms to earn additional yield with AMU token rewards.
3	Governance APY: Users can further boost their APY by locking AMU for veAMU (vote-escrow AMU) and participating in Amulet's governance. Larger veAMU holdings translates into higher boosted rates.

Strategy Production Process

DeFi is a dynamic world with fast-emerging new opportunities. To ensure the process of producing strategies is cost-effective, time-efficient, and able to deliver an end product of high quality with minimal project risks, Amulet follows the methodology set out below:

No.	Stage	Details
1	ROI review	Review consistency of returns generated by underlying protocol over a sufficiently long period of time.
2	TVL review	Review ease of attracting TVL based on total asset liquidity in the market, the underlying protocol's attraction based on size of its TVL, and single token versus token pair considerations.
3	Risk assessment	Assesses the security (e.g. smart contract audit), market (e.g. withdrawal issues), and operational risks (e.g. exploit history) of the underlying protocol.
4	Implementation	Product coding and analysis.
5	Testnet launch	Deployment of test product into testnet to check for bugs and whether the product could meet user requirements.
6	Integration test	Checks on product's integration with underlying protocol.
7	Mainnet launch	Deployment of product into mainnet for users. In the meantime, the product continues to be maintained for bug fixes, addressing customer issues, and managing software changes.