RAY aims to generate alpha, or incremental yield earned in excess of a benchmark rate. In the six months since launch, the DAI RAY has generated 200 - 300 basis points, or 2 - 3% of annualized alpha relative to Compound.
RAY connects yield-generating smart contracts with pooled liquidity. It currently supports on-chain lending for the ETH, DAI and USDC tokens on the Compound, dYdX and Dai Savings Rate markets.
There are a variety of fixed income strategies available to earn a yield on crypto assets including lending, DEX liquidity pooling and arbitrage. On-chain lending protocols such as Compound and dydx provide smart contracts that facilitate the decentralized lending and borrowing of crypto assets, with yields changing dynamically based on market supply and demand. RAY currently supports on-chain lending for ETH, DAI and USDC tokens via the Compound, dYdX and Dai Savings Rate markets.
RAY makes it easy for users to choose a specific set of opportunities that best suits their risk profile, and then automatically allocates capital to maximize the yield. To mint a RAY, investors send ETH, DAI or USDC from a web3 wallet to the RAY smart contract on the Ethereum blockchain. A unique ERC-721 token representing an ownership interest in the RAY liquidity pool is issued in return, and can be stored securely in any web3 wallet. Assets can only be withdrawn or transferred by the owner of the corresponding RAY ERC-721 token.
An off-chain oracle monitors yields across protocols, and constantly calculates the optimal asset allocation. Predictive modeling based on supply and demand liquidity is used to determine the potential impact of capital flows on the available rates. Allocation decisions are sent from the off-chain oracle to the smart contacts for execution on-chain. Since rates change constantly, funds can often be reallocated up to 5 - 10 times per day. A future version of RAY will use a decentralized set of oracles operated by 3rd parties.
On-chain lending interest is earned every block and compounds continuously. Detailed RAY reporting is available on-demand and via CSV download to track the principal value, interest earned, token balance, absolute return, annualized return, benchmark rate and alpha for all RAY positions on a daily basis. 20% of any realized alpha is contributed programmatically to a separate capital pool that is currently controlled by Staked. The alpha performance fee is only deducted from the user’s token balance at the time of withdrawal.
RAY is the easiest way to ensure that you are always earning the optimal yield using a variety of fixed income strategies in the decentralized finance, or defi market.
On-chain lending protocols (e.g. Compound and dYdX) provide trust-minimized smart contracts that facilitate decentralized lending and borrowing of crypto assets. Yields change regularly based on market demand.
To lend crypto assets on-chain, investors deposit tokens into smart contracts operating on the Ethereum blockchain. Collateral requirements and interest payments are managed on-chain via smart contracts.
ETH, DAI or USDC is deposited from either a MetaMask wallet or a Ledger wallet connected to MetaMask into the RAY smart contract on-chain.
A unique ERC-721 token representing an ownership interest in the RAY liquidity pool is issued in return and can be stored securely in any web3 wallet.
An off-chain oracle monitors yields across protocols and constantly calculates the optimal asset allocation using nonlinear programming.
Yields are fetched directly from smart contracts to avoid potential API weaknesses and attack vectors.
A future version of RAY will use a decentralized set of oracles operated by 3rd parties for yield optimization.