Design and implement custom DeFi yield strategies. Combine protocols for optimized returns.
strategyAdvanced60-90 minutes7 stepsPrerequisites: Experience with multiple protocols, Understanding of DeFi risks, Clear investment thesis, Capital allocation plan
On this page
Quick Overview
1Define Objectives
2Research Opportunities
3Assess Risks
4Design Strategy
5Model Scenarios
6Execute Strategy
7Monitor and Iterate
Building a yield strategy involves combining DeFi protocols to maximize returns while managing risk. This guide covers the framework for creating strategies.
Strategy Framework
Key Components:
Base asset allocation
Yield generation method
Risk mitigation
Execution plan
Strategy Types:
Type
Complexity
Risk
Return
. . .
. . . . . .
. . .
. . . .
Simple staking
Low
Low
3-5%
LP + staking
Medium
Medium
10-20%
Levered yield
High
High
20-50%+
Evaluation Criteria
Sustainable APY vs emissions
Smart contract risk
Impermanent loss exposure
Liquidity for exit
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Step-by-Step Instructions
1
Define Objectives
Set target return, risk tolerance, time horizon, and asset preferences.
Tips
✓Be realistic about returns
✓Higher yield = higher risk
✓Match to your situation
2
Research Opportunities
Survey current yields across protocols. Use DefiLlama, Fensory, or protocol sites.
Tips
✓Compare similar risk levels
✓Check if yield is sustainable
✓Avoid obvious Ponzi schemes
3
Assess Risks
Evaluate smart contract, counterparty, IL, and market risks for each option.
Tips
✓Audits reduce but do not eliminate risk
✓TVL indicates trust level
✓Diversify across protocols
4
Design Strategy
Combine protocols: deposit here, stake there, compound with this.
Tips
✓Map out fund flows
✓Identify all transaction steps
✓Calculate total expected yield
5
Model Scenarios
Calculate returns in good, bad, and worst cases. Include gas costs.
Tips
✓What if token drops 50%?
✓What if rates collapse?
✓Can you exit quickly?
6
Execute Strategy
Implement step by step. Start small, then scale if working.
Tips
✓Test with small amount first
✓Document each step
✓Verify each position
7
Monitor and Iterate
Track performance vs expectations. Adjust as conditions change.