Stablecoin Farming Strategy
Overview
The Stablecoin Strategy automatically optimizes your stablecoin holdings by finding the highest-yielding opportunities across multiple DeFi protocols. This strategy ensures your USDC and other stablecoins are always earning the best possible yield through intelligent protocol selection and position management.
How It Works
Core Algorithm
Balance Assessment: Analyzes current stablecoin holdings across chains
Protocol Scanning: Scans multiple DeFi protocols for yield opportunities
Yield Comparison: Compares APY across Aave, Morpho, and other protocols
Position Optimization: Moves funds to highest-yielding protocols
Performance Tracking: Monitors yield performance and rebalances as needed
Dual-Mode Execution
The strategy operates in two distinct modes based on available USDC balance:
New Position Mode (Sufficient Balance)
Trigger: USDC balance above trigger amount
Actions: Creates new positions and rebalances existing ones
Focus: Maximizing total yield through new deployments and optimizations
Rebalancing Mode (Limited Balance)
Trigger: USDC balance below trigger amount
Actions: Rebalances existing positions to better protocols
Focus: Optimizing current positions without requiring new capital
This dual-mode approach ensures continuous portfolio optimization regardless of available balance.
Yield Optimization Logic
Protocol Selection
Aave: Traditional lending protocol with stable yields
Morpho: Optimized lending with higher APY through peer-to-peer matching
Other Protocols: Additional yield opportunities as available
Position Management
Supply Positions: Earn yield by supplying stablecoins
Borrow Positions: Leverage opportunities when beneficial
Rebalancing: Automatic position adjustment for optimal yield
Existing Position Optimization: Move current positions to better protocols even with limited new capital
Configuration Parameters
Required Settings
Trigger Amount: Minimum stablecoin balance to trigger new position creation (e.g., 100 USDC)
Note: Rebalancing of existing positions works even below this threshold
Trigger Chain: Blockchain network for stablecoin operations
Max Amount: Maximum allocation per protocol (optional)
Optional Settings
Allowed Chains: Specific chains for execution
Protocol Preferences: Preferred DeFi protocols
Custom Prompt: Additional strategy instructions
Supported Chains
The strategy supports the following blockchain networks:
CoreDAO
1116
core, coredao, glyph
https://rpc.coredao.org
Ethereum
1
eth, mainnet
https://ethereum-rpc.publicnode.com
Arbitrum
42161
arb
https://arb1.arbitrum.io/rpc
Base
8453
coinbase
https://mainnet.base.org
Polygon
137
matic
https://polygon-rpc.com
BSC
56
binance, bnb
https://bsc-dataseed.binance.org
Avalanche
43114
avax
https://api.avax.network/ext/bc/C/rpc
Optimism
10
op
https://mainnet.optimism.io
Note: CoreDAO is the default chain if no trigger chain is specified.
Execution Flow
1. Check Stablecoin Balance
↓
2. Determine Execution Mode
├─ Sufficient Balance → New Position Mode
└─ Limited Balance → Rebalancing Mode
↓
3. Scan Available Protocols
↓
4. Compare Yield Rates
↓
5. Execute Position Optimization
├─ New Position Mode: Create positions + rebalance existing
└─ Rebalancing Mode: Optimize existing positions only
↓
6. Record Transactions & Update PortfolioTechnical Implementation
Providers Used
The strategy utilizes several data providers to gather real-time information:
Balance Providers
ETH Balance Provider: Fetches current USDC balance across chains
Portfolio Analysis: Analyzes total portfolio value and asset distribution
Protocol Providers
Aave APY Provider: Real-time APY rates for supply and borrow positions
Aave Positions Provider: Current positions and balances on Aave
Morpho Curated Vaults Provider: Top USDC vaults with APY and TVL data
Morpho Positions Provider: Current positions in Morpho ERC4626 vaults
Market Data Providers
Price Provider: Real-time token prices for value calculations
Market Info Provider: Protocol-specific market information
Action Execution
The strategy can execute the following actions:
Aave Actions
AAVE_SUPPLY: Supply USDC to Aave for yield
AAVE_WITHDRAW: Withdraw USDC from Aave positions
AAVE_BORROW: Borrow against supplied collateral
AAVE_REPAY: Repay borrowed amounts
Morpho Actions
MORPHO_SUPPLY: Supply USDC to Morpho ERC4626 vaults
MORPHO_WITHDRAW: Withdraw from Morpho vault positions
Chain Configuration
The strategy automatically detects and configures the appropriate chain based on the Agent's minting chain.
Example Execution
Example 1: New Position Mode (Sufficient Balance)
Input
USDC Balance: 500 USDC
Trigger Amount: 100 USDC
Current Position: 300 USDC in Aave (3.2% APY)
Available Opportunities: Morpho (4.8% APY)
Execution
Mode Detection: Balance (500) > Trigger (100) → New Position Mode
Yield Analysis: Morpho offers 1.6% higher APY
Position Optimization: Transfer 300 USDC from Aave to Morpho
New Position: Deploy remaining 200 USDC to Morpho
Result: Annual yield increased from $9.60 to $33.60
Example 2: Rebalancing Mode (Limited Balance)
Input
USDC Balance: 50 USDC
Trigger Amount: 100 USDC
Current Position: 300 USDC in Aave (3.2% APY)
Available Opportunities: Morpho (4.8% APY)
Execution
Mode Detection: Balance (50) < Trigger (100) → Rebalancing Mode
Yield Analysis: Morpho offers 1.6% higher APY
Position Rebalancing: Transfer 300 USDC from Aave to Morpho
Result: Annual yield increased from $9.60 to $14.40 (no new capital required)
Benefits
Yield Maximization
Automatically finds highest-yielding protocols
Cross-protocol yield optimization
Continuous yield monitoring and rebalancing
Dual-mode optimization: Works with both new capital and existing positions
Risk Diversification
Spreads funds across multiple protocols
Reduces single-protocol risk
Maintains stablecoin stability
Automated Management
No manual protocol hunting required
Automatic position rebalancing
Continuous yield optimization
Always-on optimization: Works regardless of available balance
Gas Optimization
Batches operations to minimize costs
Optimizes transaction timing
Efficient position management
Risk Considerations
Smart Contract Risk
DeFi protocol security vulnerabilities
Flash loan attacks and exploits
Protocol upgrade risks
Market Risk
Stablecoin depegging events
Interest rate fluctuations
Protocol parameter changes
Technical Risk
Network congestion affecting gas costs
Transaction failures during rebalancing
Smart contract interaction errors
Liquidity Risk
Protocol liquidity constraints
Withdrawal delays
Emergency exit limitations
Performance Metrics
Tracking Metrics
Total yield earned across protocols
Yield improvement achieved
Gas costs per rebalancing
Portfolio value impact
Protocol performance comparison
Optimization Opportunities
Adjust rebalancing frequency based on yield differentials
Optimize for gas costs vs. yield improvement
Monitor protocol health and performance
Best Practices
Setting Trigger Amounts
Consider gas costs vs. yield improvement
Account for minimum deposit requirements
Balance frequency with efficiency
Rebalancing threshold: Set lower for more aggressive existing position optimization
Protocol Selection
Diversify across multiple protocols
Monitor protocol health and security
Consider historical performance
Risk Management
Maintain emergency withdrawal capability
Monitor protocol updates and changes
Set appropriate position limits
Troubleshooting
Common Issues
Strategy Not Executing
Check stablecoin balance on specified chain
Verify trigger amount configuration
Ensure strategy is active
Note: Strategy will still rebalance existing positions even with low balance
High Gas Costs
Increase minimum rebalancing amounts
Optimize execution timing
Consider Layer 2 solutions
Position Failures
Check protocol permissions
Verify sufficient gas limits
Monitor network conditions
Yield Issues
Verify protocol APY rates
Check position status
Monitor protocol updates
Advanced Features
Dual-Mode Optimization
New Position Mode: Creates new positions when sufficient balance available
Rebalancing Mode: Optimizes existing positions even with limited balance
Seamless Transition: Automatically switches between modes based on balance
Multi-Chain Support
Execute across multiple networks
Optimize for best yield rates
Diversify protocol risk
Portfolio Integration
Automatic position tracking
Performance analytics
Integration with other strategies
Continuous optimization: Works with existing positions regardless of new capital availability
Customization Options
Adjustable rebalancing thresholds
Custom protocol preferences
Flexible execution timing
Protocol Integration
Supported Protocols
Aave
Type: Traditional lending protocol
Features: Stable yields, high liquidity
Risk Level: Low to medium
APY Range: Variable
Supported Chains: All supported chains (Ethereum, Arbitrum, Base, etc.)
Morpho
Type: Optimized peer-to-peer lending
Features: Higher yields through P2P matching
Risk Level: Medium
APY Range: Variable
Supported Chains: All supported chains via ERC4626 vaults
Additional Protocols
Compound: Traditional lending
Yearn Finance: Yield aggregation
Convex Finance: Curve yield optimization
Security Features
Multi-signature requirements
Time-lock mechanisms
Emergency pause functionality
Performance Optimization
Yield Maximization
Protocol Selection: Choose highest-yielding protocols
Timing Optimization: Rebalance during optimal conditions
Compounding Strategy: Reinvest yields for compound growth
Gas Optimization
Batch Operations: Combine multiple transactions
Optimal Timing: Execute during low gas periods
Efficient Routing: Use optimal transaction paths
Risk Mitigation
Diversification: Spread across multiple protocols
Monitoring: Continuous protocol health monitoring
Emergency Procedures: Quick response to protocol issues
Strategy Comparison
vs. Manual Management
Automation: No manual intervention required
Efficiency: Continuous optimization
Consistency: Eliminates human error
Always-on: Works even when no new capital is available
vs. Single Protocol
Yield: Higher yields through optimization
Risk: Reduced single-protocol risk
Flexibility: Adapts to changing conditions
vs. Traditional Banking
Yield: Significantly higher returns
Accessibility: No minimum balance requirements
Transparency: On-chain verification
Continuous Optimization: Always working to improve yields, even with existing positions
Market Conditions
Bull Market
Strategy: Maximize yield through aggressive optimization
Focus: Higher-yielding protocols
Frequency: More frequent rebalancing
Bear Market
Strategy: Conservative yield optimization
Focus: Stable, proven protocols
Frequency: Less frequent rebalancing
Sideways Market
Strategy: Balanced yield optimization
Focus: Consistent yield generation
Frequency: Regular rebalancing
Future Enhancements
Planned Features
Cross-chain Optimization: Optimize across multiple chains
Advanced Analytics: Detailed performance tracking
Custom Strategies: User-defined optimization rules
Enhanced Rebalancing: More sophisticated position optimization algorithms
Protocol Expansion
New Protocols: Additional DeFi protocol integration
Yield Farming: Liquidity mining opportunities
Derivatives: Options and futures strategies
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