In most cases, the payoff is equivalent to holding the yield-generating external LP tokens and getting UNI v2 exposure on the full value of those tokens. This payoff essentially breaks down into three cases:
- Case 1: ETH price increases 50%
- Case 2: ETH price stays the same
- Case 3: ETH price decreases 50%
For each case below, assume that:
- Initial Capital = $10,000 (b/w yETH + yUSDC)
- yETH = 4% APY
- yUSDC = 8% APY
- Rage LP Yield = 20% APY
- UNI v2 LP Yield = 15% APY
- Time Period = 6 Months
In this case $10,000 invested in the 80-20 vault becomes $13,546 vs UNI v2's $12,971, a 9.07% higher APY.
We calculate this using the following Python code snippet. For more details, check out the full code on our GitHub.
Using the same code as above, the $10,000 becomes $11,249 in Rage vs $10,723 in UNI v2, a 10.05% higher APY and a total Rage APY of 26.54%.
In this case, the $10,000 becomes around $8,271 in Rage vs $7,794 in UNI v2, a 12.95% higher APY.
The above estimates show the 80-20 strategy in the general case with standard yield-generating collateral. It performs strictly better than UNI v2. However, many of our 80-20 Vaults take more exotic yield-generating collateral with varying risk profiles.
For risk analysis on specifically the 80-20 Curve Tri-Crypto Vault, check out .