Savvy DeFi Quickbites

• Savvy DeFi's Lending Protocol has a distinctive non-liquidating mechanism for its Collateral Debt Position (CDP).

• Users can earn yield and borrow against it by receiving a liquid equivalent of their deposited token (svToken).

• The yield is used to repay the user's debt. Savvy's CDPs are designed to prevent liquidation.

• Unlike traditional CDP architectures, they do not depend on cross-collateralization that triggers liquidation when the value of collateral decreases.

What’s The Latest from Savvy?

Savvy has been actively and consistently developing their platform in the recent weeks since the launch.

Their current focus is to enhance the distribution and usage of svTokens, as well as optimize the utilization of Savvy's platform.

This article will discuss the following important updates and provide a strategy for maximizing your yield.

• Savvy Booster

• Savvy New Incentivized Uniswap v3 Liquidity Pools

Read This First!

Before we continue, we suggest that you read our thread below first. It will give you the details and explain how Savvy works.

Savvy Booster & Incentivized New LP in Uniswap

Savvy Booster

Savvy Booster is the latest update from Savvy designed to encourage borrowing by users who have deposited their assets in Savvy. Users can deposit their ETH, BTC, and USDC in Savvy and choose a protocol to earn yield.

Currently, the supported protocols are Aave, JonesDAO, and GMD Protocol, with plans to add more protocols in the future.

Savvy Booster is a reserved pool of 700,000 $SVY tokens, which will be vested over 6 years. This pool is specifically for users who borrow svTokens from the Savvy platform and also hold a balance of $veSVY.

The strategy discussed in this article focuses on maximizing the flywheel. So, let's get started! 🚀

Savvy Booster Strategy

• The strategy requires users to first deposit into the Savvy platform. So, the first step is to deposit and select your preferred strategy.

• Once you have deposited your assets, you need to borrow svTokens that correspond to your deposited assets (svETH, svBTC, svUSD).

• At this point, you can purchase $SVY from the liquidity pool (LP) and stake it to start receiving $veSVY.

• Alternatively, you can create an LP based on your borrowed svToken (svETH/WETH, svBTC/wBTC, svUSD/USDC).

• Remember, to be eligible for SVY Booster, you need to have a balance of $veSVY and an open borrowing position.

• The next step would be to use the earned SVY from the booster to add more LP position in order to gain more rewards and incentives (you can check the new LP in Uniswap below).

• You can also choose to stake earned $SVY it to accrue more $veSVY.

• This will create a flywheel effect that results in the accumulation of SVY and higher yields for the borrowers.

  Savvy New Pools

Pick Your Pool: New Uniswap LP for Savvy!

Liquidity pools introduce a new risk to LPs in the form of impermanent loss. To address this, Savvy offers incentives to liquidity providers. To optimize the distribution of these incentives and enable co-incentivization, Savvy proposes adding a new liquidity pair to Uniswap.

This plan will benefit Savvy and the community in the following ways:

• Increased visibility and attraction of more users.

• Exposure to DEX Aggregators.

• Efficient management of protocol-owned liquidity.

• Expanded trading pairs and co-incentives.

In collaboration with FRAX Finance, the new LP in Uniswap will be paired with FRAX ecosystem tokens:

• svUSD/FRAX (Co-incentivized with FXS and SVY) ➡ ~17%

• svETH/frxETH (Co-incentivized with FXS and SVY) ➡ ~17%

• SVY/WETH (Incentivized and vote gauged) ➡ ~19.23%

All of these LP pools are available on Uniswap v3. Their liquidity is managed using Bunni, a protocol from Timeless Finance. Although Bunni is new, it is chosen because it provides extra rewards in addition to SVY and FRAX, which come in the option to buy LIT (oLIT).

Bunni is expected to grow and provide more valuable incentives in the future. Additionally, Gamma is being considered and might be used together with Bunni in the same pool later on.

Conclusions

• Savvy Booster encourages borrowing for users who have deposited their assets in Savvy.

• Liquidity pools pose impermanent loss risks to LPs, which Savvy aims to address. Savvy proposes a new liquidity pair on Uniswap to provide incentives to liquidity providers, increase visibility, attract more users, and efficiently manage protocol-owned liquidity.

• Collaboration with FRAX Finance enables co-incentivization for the new LP on Uniswap.

• The LP pools are managed using the Bunni protocol, which offers additional rewards through oLIT, providing more incentives for the new LPs.

That’s a Wrap and Thank You!

I hope you enjoyed the articles!

I'm working on improving this newsletter and would love to hear your thoughts on what you'd like to see more of.

Thank you for reading!

Eli5DeFi