DeFi Vaults Selection: Rivo Methodology

andre_antares

Andre

Posted on March 11, 2024

DeFi Vaults Selection: Rivo Methodology
  • Rivo.xyz vision is that everyone can build a DeFi yield portfolio for their needs in one place. To realize this vision, Rivo’s yield marketplace covers all kinds of strategies within different yield mechanisms, coins, risk profiles, returns and blockchains. This diversity of strategies allows users to customize their portfolio according to evolving market narratives and construct varied exposures to the market.

To ensure investment freedom, Rivo's analytics team categorizes DeFi strategies based on APY/Risk and the type of asset. Each project undergoes a rigorous listing process, including due diligence on audits, technological foundations, track records, and analytics. has passed a lot of checkmarks. Therefore, within the scoring system, the analytics team associates risk with the potential for strategy volatility and the novelty of the underlying technology.

APY/Risk is further decomposed into Conservative (Low risk), Up-and-Running (Medium risk), and High-risk categories.

  • Conservative strategies are the ones that were tested by the market for a long period of time, including thousands of users, tens of millions in TVL, and multiple audits. The result of being “tested” by the market is typically low returns. This category is great for reducing volatility and risk within your DeFi portfolio, keeping yourself unexposed to new technologies of the market.

  • Up-and-Running strategies are the ones that provide higher returns for being exposed to recent innovations. The strategies in this section came into DeFi months ago, received the first traction and battle-testing and attracted millions of TVL. The returns on this opportunities were either not inflated yet, or fall into the technical innovations, which can result in volatile performance.

  • High-risk and volatile strategies can generate the most lucrative returns, but the underlying yield mechanism is either volatile (based on the market conditions, liek volumes and liquidations) or highly incentivised by token rewards. Every strategy on Rivo is auto compounded, which means that high APR is being reinvested into strategy. Since the strategy has volatile assets and volatile yield source, it can result in a loss or give the highest returns.

Rivo's analytic team categorizes assets into layers, ranging from fundamental assets like BTC and ETH to stablecoins, L1/L2 coins, altcoins, infrastructure, and indices. Each layer represents different investment theses and risk profiles, allowing users to diversify their portfolios accordingly.

  • BTC and ETH are core assets in crypto, and the demand for generating yield on BTC and ETH is a fundamental driver of both CeFi and DeFi.

  • Stablecoins play a crucial role in the crypto ecosystem, bridging the traditional and crypto worlds. It is essential to offer various stablecoin yield strategies with different risk profiles, providing users with the option to avoid exposure to crypto or rebalance their portfolios after a bullish rally. The primary driver for stablecoin yield is the borrowing demand for stablecoins in a bullish environment, contributing to DeFi having the highest USD interest rates across all markets.

  • L1 and L2 blockchains operate on top of the Ethereum blockchain. This section emphasizes exposure to the coins of these blockchains, such as ARB, AVAX, BNB. A traditional bullish thesis regarding blockchains leads users to hold the core coin of the blockchain, like BNB in the case of a bullish thesis for the Binance chain. Consequently, there will always be a need for yield exposure on such assets, facilitating exposure to the growth of the selected blockchain.

  • Altcoins/Infra/Indices are the long-tail of crypto assets, giving exposure to all kind of investment theses. This section contains decentralised exchanges, lending protocols, diversified investment strategies, staking primitives and all kind of innovations across DeFi. This type of strategies have tokens with the lowest marketcaps meaning higher volatility.

In the Rivo Yield marketplace, you can access comprehensive information to make smart investment decisions. This includes project descriptions, audits, risk scores, APR changes over time, and more. Explore a diverse of DeFi strategies on Rivo Yield marketplace: app.rivo.xyz

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andre_antares
Andre

Posted on March 11, 2024

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