Yield Strategies Explained
Understanding yield strategies is key to maximizing your returns on OrbitYield. This guide explains the different strategy types, risk levels, and optimization techniques.
What Are Yield Strategies?
Yield strategies are carefully designed investment approaches that determine how your assets are deployed across DeFi protocols to generate returns.
Each strategy in OrbitYield is a unique combination of:
- Underlying DeFi protocols (lending platforms, DEXs, etc.)
- Asset allocations across those protocols
- Cross-chain deployments when applicable
- Compounding methods and frequencies
- Risk management parameters
OrbitYield's AI constantly analyzes market conditions to create, monitor, and adjust these strategies for optimal returns while managing risk.
Strategy architecture diagram
(Interactive diagram coming soon)
Core Strategy Types
Lending Strategies
Generate yield by providing your assets to lending protocols where borrowers pay interest.
How Lending Strategies Work
When you invest in a lending strategy, your assets are deployed to DeFi lending protocols like Compound, Aave, or Euler. These protocols lend your assets to borrowers who pay interest, which becomes your yield.
Advantages
- Lower risk profile
- Stable, predictable yields
- High liquidity (withdraw anytime)
- No impermanent loss
Considerations
- Generally lower APYs than other strategies
- Interest rates fluctuate with market demand
- Smart contract risk exposure
OrbitYield's lending strategies utilize multiple lending platforms simultaneously, automatically moving your assets to whichever protocol offers the highest rates at any given time.
Liquidity Provision Strategies
Earn trading fees and rewards by providing liquidity to decentralized exchanges.
How Liquidity Provision Works
Liquidity provision strategies involve supplying asset pairs to decentralized exchanges like Uniswap, SushiSwap, or Curve. You earn a share of the trading fees generated when users swap between those assets.
Advantages
- Higher yields than lending
- Additional token incentives
- Double revenue streams (fees + rewards)
- Support DeFi infrastructure
Considerations
- Impermanent loss risk
- Higher volatility in returns
- Medium risk profile
- Complex mechanics
OrbitYield's AI carefully selects asset pairs with correlated price movements to minimize impermanent loss while maximizing fee generation.
Staking Strategies
Lock your assets to support blockchain networks and protocols in exchange for rewards.
How Staking Strategies Work
Staking involves locking your tokens to participate in network consensus (for PoS blockchains) or governance (for DeFi protocols). In return, you receive staking rewards from inflation or protocol fees.
Advantages
- Predictable reward schedules
- No impermanent loss
- Governance rights (often included)
- Support network security
Considerations
- Lockup periods (reduced liquidity)
- Token price risk
- Slashing penalties (for validators)
- Unbonding waiting periods
OrbitYield's staking strategies include both native blockchain staking (like ETH staking) and protocol staking (like staking governance tokens in DeFi projects).
Yield Farming Strategies
Complex multi-step strategies that maximize protocol incentives and rewards.
How Yield Farming Works
Yield farming strategies combine multiple DeFi actions to maximize returns, often involving providing liquidity, staking LP tokens, harvesting rewards, and reinvesting them in a continuous cycle.
Advantages
- Highest potential APYs
- Multiple reward tokens
- Leveraged yield opportunities
- Early access to new protocols
Considerations
- Highest risk profile
- Complex interactions
- APY volatility
- Higher gas costs
OrbitYield automates the entire yield farming process, handling complex interactions, optimal harvest timing, and reinvestment strategies to maximize your returns while minimizing gas costs.
Strategy Risk Categories
OrbitYield classifies strategies into risk categories to help you make informed decisions based on your risk tolerance.
Conservative
Low-risk strategies focused on capital preservation with modest yields.
- Major lending protocols only
- Stablecoin-focused
- Established blue-chip protocols
- Multiple audits and long track records
- Approximate APY: 2-8%
Balanced
Moderate-risk strategies that balance yield potential with reasonable security.
- Mix of lending and liquidity strategies
- Stable asset pairs for LP positions
- Established mid-tier protocols
- Some exposure to market volatility
- Approximate APY: 8-20%
Aggressive
Higher-risk strategies designed to maximize potential returns.
- Complex yield farming strategies
- More volatile asset pairs
- Newer protocols with higher rewards
- Leveraged positions (carefully managed)
- Approximate APY: 20%+
Risk Factors Considered
OrbitYield evaluates multiple risk factors when categorizing and creating strategies:
Smart Contract Risk
Protocol audits, code quality, history of exploits
Market Risk
Asset volatility, correlation, liquidity depth
Protocol Risk
Team reputation, TVL, time in operation
Complexity Risk
Number of interactions, dependencies, failure points
Cross-Chain Strategy Intelligence
OrbitYield's most powerful feature is its ability to deploy assets across multiple blockchains to capture the highest yields, regardless of which network they're on.
This cross-chain functionality allows us to:
- Access exclusive opportunities on emerging L1 and L2 networks
- Capitalize on yield differentials between chains
- Reduce concentration risk by diversifying across networks
- Optimize for lower gas fees on certain networks
- Participate in incentivized liquidity mining programs across chains
Supported Networks
How Cross-Chain Strategies Work
Opportunity Detection
OrbitYield's AI scans all supported chains simultaneously, identifying yield opportunities and their relative attractiveness after accounting for bridging costs.
Bridging Optimization
When a high-yield opportunity is identified on another chain, the platform calculates whether the yield differential justifies the bridging costs and latency.
Secure Asset Transfer
Using industry-leading bridges and cross-chain messaging protocols, assets are securely transferred to the target chain for deployment.
Strategy Execution
Once on the target chain, assets are deployed according to the specific strategy parameters, with all interactions happening automatically.
Continuous Monitoring
The platform continuously monitors the performance and will bridge assets back to the original chain or to another chain if opportunities shift.
AI-Powered Strategy Optimization
OrbitYield's AI engine is the heart of our strategy optimization, leveraging machine learning and data analysis to maximize your returns while managing risk.
Our proprietary algorithms analyze millions of data points across the DeFi landscape, making decisions no human manager could match in terms of speed, accuracy, and efficiency.
AI optimization visualization
(Interactive visualization coming soon)
Data-Driven Decisions
Our AI analyzes historical yield data, protocol metrics, token economics, market trends, and risk indicators to identify optimal investment pathways.
Predictive Modeling
Using advanced machine learning models, we predict yield trends, protocol performance, and market shifts before they happen, positioning your assets accordingly.
Gas Optimization
Our AI precisely times transactions to minimize gas costs, batches operations when possible, and uses gas-efficient contract interactions to preserve your returns.
Choosing the Right Strategy
When selecting strategies for your portfolio, consider the following factors:
Your Investment Timeline
Short-term investors (less than 30 days) should prioritize liquid strategies without lockups. Long-term investors can benefit from higher-yield strategies with staking or lock periods.
Risk Tolerance
Be honest about your comfort with volatility and potential losses. Higher yields always come with higher risks. Consider diversifying across risk categories rather than going all-in on high-risk strategies.
Gas Efficiency
If investing smaller amounts, prioritize strategies with less frequent rebalancing or those on L2s with lower gas costs. Larger investments can absorb more frequent operations and still remain profitable.
Portfolio Composition
Aim for strategies that complement your existing crypto holdings. If you're already heavily exposed to certain assets, seek strategies that hedge or diversify that exposure.