Collecting Rewards
In addition to collecting interest from lending and fees from market making, we intend to automatically claim and convert the bonus incentives that are being distributed by many of the DeFi protocols. For example, Compound gives away COMP tokens, Balancer gives away BAL tokens, and Curve gives away CRV tokens. These bonus rewards will be regularly converted into stablecoins, deployed in the market, and distributed to nYUSD holders in the form of additional yield.
While the vault safely stores any unexpected rewards that it receives, custom strategies will need to be written and deployed to decide when and how the protocol should convert them to stablecoins.
Today, rewards are a significant factor for yield farmers as they represent a large percentage of their returns. We anticipate that the nYUSD protocol will be upgraded over time to take advantage of the most attractive yields available across the DeFi landscape. The protocol will factor in the market value of the various rewards being offered when deciding how to best allocate resources.