Locus Finance

Shout out to Degen Camp for putting this one on my radar! Upon discovery, Locus Finance had 170 followers. I was surprised considering their website, docs, and dApp are already live and well thought out. The website is very clean and at first glance it looks like they’ve been live for quite some time, which isn’t the case. According to one of their most recent tweets, they should be going live on July 29th.

You can find more of an in depth look into Locus Finance and their vaults below, but let me share some of my thoughts first. This isn’t the first product of its kind. Some offer vaults similar to Locus with different strategies, some offer tokenized baskets that go up/down with prices of tokens inside. Some users will use whichever protocol they feel comfortable and safe using, some users will use whichever offers the best yields.

How you make money off of this (besides depositing into vaults) is if Locus gets a lot of usage and fees start coming in. Hopefully they will have a token (no info on it yet) and incorporate revenue share with token holders. I’ll be keeping an eye on Locus to see if they gain any traction and attract a nice amount in TVL. As always, dyor and if you plan on depositing, be aware of the risks involved.

Locus is a platform for decentralized asset management with automated, tokenized yield-bearing vaults of curated strategies.

Customer assets are managed through smart contracts, providing a simple interface for navigating complex DeFi strategies.

Locus allows you to deposit ETH or USDC into a vault that is comprised of yield-bearing tokens, or a vault that utilizes deposited funds and applies them to a yield-bearing strategy. Each vault has its own risk score.

This vault utilizes liquid staking tokens. This is low risk, low reward (compared to degen APY’s), but utilizes safe strategies with a safety score of 4.6/5.

The first strategy is depositing wstETH-ETH LP into Aura Finance, earning wstETH staking rewards, as well as $AURA and $BAL emissions. Earned rewards are regularly harvested and compounded back into the strategy.

This strategy comprises of 46% of the vault.

The second strategy is similar to the first one, just depositing rETH-WETH LP’s (Rocket Pool ETH) into Aura Finance, earning $BAL and $AURA rewards, rETH staking yield and swap fees. Accrued rewards are automatically compounded into the strategy.

This strategy comprises of 32% of the vault.

The third strategy of this vault involves converting ETH to frxETH and staking on Frax for sfrxETH. The strategy earns $ETH staking yields and additional ETH incentives from Frax.

This strategy comprises of 21% of the vault.

All yield + rewards are auto compounded and when the user withdraws from the vault, they will receive their ETH + rewards. For example, if user deposits 1 ETH and withdraws after a year, the expected withdrawal amount would be 1.049 ETH.

More info in their docs.

This vault is a little different as users deposit USDC. Since USDC is deposited and the strategies used involve non-stable assets, users do gain exposure to those assets. If you are bullish on these tokens, or think the APY offsets negative exposure, or don’t mind having exposure to these tokens, then this vault is for you. Safety score of 4.5/5.

The Locus team monitors the underlying protocols and assets and remains competitive by adjusting or changing vault strategies if necessary. The end goal is to have a product with consistently high returns and relevant market exposure.

The first strategy utilizes Convex. User funds are deposited into cvxFXS-FXS liquidity pool on Convex Finance, earning $CRV and $CVX emissions. Earned rewards are regularly harvested and compounded back into the strategy. Exposure to cvxFXS + FXS. Weekly APY of ~8.19%.

The second strategy utilizes Yearn. Strategy funds are converted into st-yCRV token on Yearn, earning $CRV emissions and bribes. Accrued tokens are automatically compounded into the strategy for optimized returns. Exposure to st-yCRV. Weekly APY of ~27.40%.

The third strategy utilizes Convex again. Funds are deposited into CVX-ETH pool on Convex, earning $CRV and $CVX rewards. Earnings are regularly reinvested into the strategy to increase returns. Exposure to CVX + ETH. Weekly APY of ~13.05%.

The fourth strategy utilizes Aura. Assets are deployed into auraBAL autocompounder on Aura Finance. Part of the rewards is compounded automatically by the protocol with the rest of the rewards being regularly harvested and compounded by Locus. Exposure to BAL. Weekly APY of ~13.46%.

The fifth strategy utilizes Aura again. Strategy assets are converted into AURA-WETH LP on Aura Finance, earning $AURA and $BAL rewards. Rewards are regularly compounded back into the strategy. Exposure to AURA + WETH. Estimated APY of ~6.86%.

More info in their docs.

This vault utilizes yield-bearing tokens on Arbitrum! If you’re familiar with Arbitrum then you’ll be familiar with the tokens and strategies used. Similar to the DeFi Core Index vault, users deposit USDC and deposits are used to buy and stake the tokens indicated in the vault. This means depositors will have exposure to these tokens. If you are bullish on these tokens, or think the APY offsets negative exposure, or don’t mind having exposure to these tokens, then this vault is for you. Safety score of 3.6/5.

The strategies in this vault are more simple than the others, so we’ll keep it simple as well. USDC deposited into the vault will be swapped for the following tokens:

Those tokens are then staked and start earning yield immediately. Here is a quick rundown on each token and how they earn yield:

More info in their docs.