VYFI: Open-Source Multi-DEX Auto-Harvester

[GENERAL] Name and surname of main applicant

Steven Ward

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

6

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

The Auto-Harvester provides users access to multiple pools, across multiple protocols in a single transaction. Making entering and managing DeFi portfolios streamlined for new and experienced users.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

https://www.gnu.org/licenses/gpl-3.0.html

[METADATA] Horizons

DeFi

[SOLUTION] Please describe your proposed solution

One of the most important aspects to a DeFi ecosystem is access to liquidity. By growing liquidity on-chain, more and more users will be incentivized to engage with the ecosystem, creating a positive feed-back loop that grows the total engagement on the Cardano Blockchain. 

DeFi and liquidity farming contain multiple barriers of entry to new and experienced users that make it more difficult to engage with liquidity provision. These include factors such as impermanence risk, portfolio management and hard to decipher language and systems. By building an Auto-Harvester to manage these advanced ideas, we intend on simplifying the learning and engagement process for a user to provide liquidity to the Cardano ecosystem. 

There also exists a problem with a reduction in trx speed on the blockchain when we are at high capacity. This results in slower transactions overall for users, creating a negative experience. There are many possible L2 (layer 2) solutions to this problem, but one approach is to aggregate transactions on the L1 (layer one) chain, to reduce the total transaction burden across the entire network.

What is an Auto-Harvester? 

An auto-harvester is a tool for users that will allow for easier portfolio management in Cardano DeFi. It will allow users to liquidity farm across multiple protocols on the Cardano blockchain, by just selecting a strategy, and then conducting a single transaction to deposit their CNTs to that strategy. It can be thought of as an Index Fund for LP tokens of projects from different areas of the Cardano Ecosystem.

Who are Auto-harvesters for? 

The auto-harvester is for everyone in the Cardano ecosystem.

For new users, the auto-harvester simplifies the process of liquidity farming, users will be able to engage with multiple liquidity pools with a single transaction.

Experienced users will be able to find strategies that are applicable to them, and then automate portions of their portfolio to reduce their portfolio management burden.

What is the possible impact?

We want to empower new users to become more confident in exploring and expanding their DeFi exposure. The Auto-Harvester can give users a simplified, less intimidating first experience. 

Whilst emboldening new users with a platform that is easier to navigate and interact with, the Auto-Harvester also expands on the tooling available to experienced DeFi veterans such as indexation. 

Another way to gauge the possible impact is to look at existing Auto-Harvesters on other blockchains. The current TVL of yield aggregators across the industry is 1.612 Billion (As of 15-Sep-2024). This displays a need for an automated liquidity management system within the blockchain industry. The top 5 Yield Aggregators have over 100 Million in TVL, currently Cardano has no such product.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

There are multiple advantages that an auto-harvester brings to a blockchain. In general, liquidity aggregation reduces the complexity required to engage with the market. The closest analogous product from traditional finance is an indexed fund, which allows users a much more simplified point of access to the stock markets.

By providing these tools to Cardano, the onboarding process for DeFi will be streamlined across the entire chain, assisting in boosting liquidity and thus helping the chain grow as a whole.

There are many ways that impact from the auto-harvester can be measured, both qualitative and quantitative. The projects focus will be split into three categories: 

1) Reduced Complexity for user

2) Total liquidity locked 

3) reduced transaction load on the blockchain

4) Allow experienced users to create index funds that can benefit and educate new to journeyman users and expand their Defi knowledge

Reduced Complexity for Users

Our principal aim is to allow a simplified process for understanding and engaging with DeFi on Cardano. User experience can be gauged by improved user flow, minimized transaction count, and simplified information processing. 

For minimizing user transaction count, we will be focusing on reducing the number of transactions required to go from ADA in wallet, to holding a diversified portfolio of Cardano Assets engaged in liquidity mining. Our target is a single transaction.

This reduced transaction count results in an improved user flow, by minimizing steps required for a user to engage with Cardano DeFi. 

Reduced transaction load on blockchain

By aggregating the transactions of multiple liquidity providers, we will reduce the total transaction being conducted on chain. We can calculate the approximate harvest and swap transactions saved given the number of users we have, and track this. 

Total Value Locked

The total value locked into our Auto-Harvester gives users a direct metric on which to base the impact of the Auto-Harvester. Depending on the value of liquidity locked into the Auto-Harvester we can gauge just how successful and useful the product is to the Cardano ecosystem. As we are able to aggregate more liquidity, this builds utility across Cardano as a whole, improving user experience across multiple DApps. 

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Platform

We’ve been in the ecosystem for over four years. We have already delivered a unique suite of products for the ecosystem (Our DEx, our distributive BAR, first on-chain lottery, and our Vaults), and continued to build and innovate within the Cardano ecosystem. We are confident with our track record and that we have the capability to deliver the Auto Harvester. 

Funds

We are a registered business in Australia, with our registration under International Markets, ABN: 84 649 719 433

ABN lookup: https://abr.business.gov.au/ABN/View?abn=84649719433

The Funds (wallets) used for the development of the Auto Harvester will be public and transparent. We intend on using these funds in a transparent manner that will be auditable on chain.

Project Visibility and Community Engagement 

The VyFinance team has attended (and will continue to attend) each major Cardano event in the community, including: 

- Rare Bloom 2022

- CNFTcon 2022

- NFTxLV 2023

- Rare Evo 2023

- Rare Evo 2024

- Cardano Summit 2022

- Cardano Summit 2023

- Cardano Summit 2024

Here we have been able to build confidence with the ecosystem and create relationships with many projects and leading community members.

We have also had the honor of being awarded/nominated for multiple accolades within the blockchain. This includes:

CNFT award - “Best Long-Term Utility” - Winner

Rare Evo Award - “Best DeFi” - Winner

Cardano Summit - “DeFi Category” - Nominated  

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

On-Chain Code

This includes the smart contracts and data handling required on chain.

This is the core of the product, and will provide the primary utilities of the auto-harvester. 

The deliverable will be test-net. Users will be able to engage with the smart contracts upon the launch of our testnet. This period will be crucial if the functionality meets the communities expectations.

Off-Chain code

This involves many crucial aspects of the product. Including, but not limited to: data query servers, data based handling and transaction construction.

The principal deliverable will be Milestone 3: testnet, where our off-chain code will be working synchronously to achieve the final product.

Test-net

Once the first two milestones are completed, we will be able to launch our test-net. Users will be able to engage with the product and we will be able to test the functionalities of the system.

The success of this milestone will be user feedback, which will allow us to optimize prior to launch. 

Audit

The audit is crucial for ensuring the safety of the smart contracts prior to launch. 

The deliverable for this milestone will be a public release of the audit of our smart contracts.

Video

We regularly engage with the Cardano community, and have released over 150 videos that can be found on youtube. We will continue releasing content regarding the auto-harvester through until launch. We will continue to share our progress with our combined community through the various social media platforms.

Final Project Completion Report

We will release regular updates about the progress of the product through Medium. We currently release a monthly update to engage the community in the process and progress of these new products. This will include technical reports, alongside more general product updates.

We also have a Trello, which is live. Where the live progress of current tasks can be viewed. This is available to be viewed at all times.

[RESOURCES] Who is in the project team and what are their roles?

Steven Ward - CEO

Dylan McCoy - COO

Deann Zois - CMO

Ryan Felt - CTO

Jon Hendrickson - CRO

Nick Cappiello - CCO

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

By allowing easier access to liquidity provision for users, we will be able to boost the total liquidity available on-chain, and thus grow the entire ecosystem. Liquidity is the largest barrier to DeFi on the Cardano Blockchain currently, and this product will allow a streamlined mechanism for integration of liquidity strategies on-chain.