Probe module: Automated Yield Maximiser

Probe Module : Nexus Protocol Phase 1

What is Probe Module?

Probe module is a decentralized automated yield maximiser for Tefi, utilizing Anchor Borrow, Mirror Mint, Mirror’s mAsset-UST LP to maximize yield, with similar risk to staking or Anchor Earn, on your Terra assets (Luna, UST, ANC, MIR). This is the first phase of Nexus Protocol.

Why?

Utilizing Anchor borrow, Mirror Mint hedged mAsset LP, low-risk, high yielding is possible. However, there are several limitations for individual users to utilize such strategy as Anchor borrow and Mirror mint both requires constant monitoring and management to prevent liquidation. As such strategy is not a new thing, but with clear manual limitations, there is an evident demand for automation. By automation, we can offer significantly higher yield on Luna staking, UST Earn or manual replication of the same strategy, whilst maintaining similar level of risk. Such maximization of yield would not only attract customers within Terra ecosystem, but also other retail cryptocurrency investors seeking for higher yield on Defi world. Also, deposited assets and the customer pool will be the foundation of Nexus protocol to realize the next step of UST expansion, creating credit payment system with affiliated merchants. If you are interested in the larger picture, please refer to my post on Terra Agora.

Benefit & Impact Towards Mirror Protocol & Mirror Community

  1. Nexus protocol will actively utilize Mirror Mint, mAsset trading, mAsset-UST LP pooling as a main method of operation, contributing to keep the protocol more active and yield higher return for MIR governance stakers.
  2. Nexus protocol will provide mAsset-UST LP pool, and actively reposition it in accordance with the expected APR; thus lower slippage can be expected for mAsset trading users.

How It Works

UI would super simple. The users will deposit the assets, in return for cAssets (deposit 1 Luna or 10 UST, receive 1 cLuna or 10 cUST). And withdraw the assets and rewards any time. 21 days delay may be applied for cLuna, as Luna’s yield strategy inevitable includes staking one way or the other.

Within the protocol, the optimization will be done as follows via series of smart contracts (for Luna):

Why mint?

For first four years, MIR token allocated for mAsset LP staking would offer significant level of yield. However, to utilize such LP staking to UST earn operation, significant level of risk is involved. As one side of the pair, UST, is a stablecoin, the risk would heavily depend on the future price of mAsset in comparison to the price of LP pooling. Rise in the price of mAsset would resort in additional profit, however, decrease will resort in the loss of the principal asset. Such risk, however, can be hedged using Mirror’s Mint by sacrificing the efficiency of the yielding operation, but still providing significantly higher yield than Anchor Earn with similar level of risk.

At this point, I would love to hear your feedback on the concept. I am also searching for developers to realize this project together. If you are interested, please contact me via nexus.protocol21@gmail.com.

Thank you!