Market buying is not for everyone. Risk averse investors may be bullish on ETH or BTC but are reluctant to risk their capital in volatile markets.
Inverse.finance is a protocol that offers passive no-loss investment in any token by following a Dollar-Cost Averaging strategy using stablecoin yield. Starting with ETH.
Users deposit Dai and receive a vault token in a 1:1 ratio. The vault then invests Dai in a yield optimizer protocol such as Yearn. Earnings are continuously swapped to ETH and distributed to depositors as long as they hold the vault token. Dai is withdrawable at any time.
Powered By Yearn V2 Vaults
In order to make this strategy worthwhile, generated yield must be high enough to build a sizable ETH position over time. Thankfully, the YFI team was kind enough to offer to whitelist our vaults to integrate with the unreleased Yearn v2 yDai vault, currently generating an estimated 25% APY. This also means that Inverse Finance depositors are among the first first to use Yearn v2 before it is publicly released on Yearn.Finance.
Inverse protocol is unaudited. Therefore, deposits in the protocol are temporarily capped at 240k Dai globally. This allows the protocol to be battle tested while reducing risk. As the protocol proves to be secure over time, the cap will be slowly raised and more vaults will be offered.
Admin keys are heavily restricted. The goal is to strike a balance between minimized trust and recoverability. Keys can be used to manage vault and strategy parameters but cannot unexpectedly upgrade the vault, move user deposits or prevent withdrawals. Please read the code on Github to verify.
A rescue function can be called by the admin key to withdraw from the vault but is subject to a 2-day timelock which we ask users to watch on Etherscan. Any unannounced transactions sent by the admin key to the timelock should be considered malicious until proven otherwise and depositors must withdraw within 2 days. The timelock is only a temporary escape hatch and will be removed once the protocol’s safety is proven.
Inverse started as a solo project but is beginning to gather a community around. Its future will be decided by contributors and early community. The immediate next step is the launch of more vaults for passively investing in other tokens. Beyond that is yet to be discovered. If you want to help shape the future of the protocol, come and hang on Telegram, or if you just want to keep up, subscribe to the Telegram announcement channel and follow us on Twitter.
Inverse.Finance: Deposit Dai, Earn ETH was originally published in InverseFinance on Medium, where people are continuing the conversation by highlighting and responding to this story.