It is a unique strategy based on MultiStrategy solution.
MultiStrategy contains "pipes" inside - parts of strategy specially deployed for specific platform.
This strategy has 4 pipes:
AAVE - deposit underlying token in AAVE to receive amToken
QiDao - deposit amToken in the yield part of QiDao to create camToken
MaiStablecoin - create a vault on QiDao for the camToken and borrow MAI token
BalVault - deposit MAI token in the Balancer pool
After the launch users experienced a problem with calculating the long-term profitability of this strategy.
Let's describe all components that will bring you a profit and try to estimate the income.
When users deposit tokens in AMB Multi Strategy they will receive a share token TETU_MULTI_xxx which represents the amount deposited at the current time.
Vault has a share price that depends only on 1 strict attribute - how much underlying token the vault can get after the full withdraw from all pipes.
This process is simulated within the strategy every time when an user deposits/withdraws or when pipes are rebalanced. This process includes "revert action" and Polygonscan detect it as a warning event. Don't worry, it's ok and it's just an implementation specific trick.
At the time of depositing in AMB Multi Strategy, there is a 0.3% fee on the total deposit to cover the repayment commission of the MAI and Swap fee on Balancer, so the user will receive the share tokens minus 0.3%. When depositing in the vault the assets will be immediately deposited in the AMB Multi Strategy and the MAI swap and repayment fees will already be counted.
However, it is not possible to calculate the exact amount of fees because the vault does not read the strategy's logic and only understands how many underlying assets are under control.
0.3% deposit fee is a maximum repaying fee at the moment of deposit. It can be lower, and the gap will go to vaults users as a "synthetic income".
It can lead to dramatically increasing share price in the momentum.
In general this can be interpreted as operating costs being reduced as less than 0.3% of fees are charged and the amount saved is provided directly to Multi Strategy users.
Next good question - What factors can influence the amount to be withdrawn and the share price? Can the share price change?
The camToken has autocompounding nature and periodically its value increases on the QiDAO platform. We don't touch this process, you will have full income from AAVE supply + AAVE rewards. 3-5% APR
Balancer trading fees for borrowed MAI deposited in the pool (we use ~50% of the underlying cost). 1-2% APR
This amount will be used a little bit to cover MAI price fluctuation until enough money is accumulated.
In the scenario in which the price of the underlying asset falls by more than 50%, the borrowed MAI will be partially repaid.
This is a very rare scenario and the strategy has a big gap that sets it up for huge market fluctuations.
When the price of the underlying asset increases, Multi strategy will borrow more, in which case more swap and repay fees will be charged. This happens only when the price of the underlying asset reaches a new level. The repayment fee will be counted and the share price will drop a little.
It should be around usdValueOfAssetChange / 2 * 0.05. If ETH pump in price to 10% the share price will be changed ~0.0025%
The Multi strategy borrow MAI and provide it to the Balancer pool. If the price of MAI increases, the strategy will withdraw a little less of MAI.
It will be covered with time by the buffer that we will have from trading fees. But until this buffer doesn't cover the possible gap the result of full withdraw will be a bit lower. It will lead to the share price decreasing in a period when the MAI price is higher than the value when the most underlying was deposited.
The longer the strategy works the less volatile this process will be.
Let's say $1000 is deposited in the AMB Multi strategy, 500 MAI is borrowed. The MAI is provided to the Balancer, after that the MAI price increases to $1.1, the strategy will only be able to withdraw 450 MAI. With this amount the strategy will be able to pay only $900
But there will still be $100 of collateral, it's like an impermanent loss.
Every week QiDAO and Balancer disperse rewards for depositors.
Tetu users always have TETU token rewards instead of them.
With the current rate (30%) Tetu users will have 30% of this distribution.
Another part of rewards is covered with TETU tokens distributed every day based on vault performance. Usually, it is much higher than you will be able to receive without Tetu platform.
You will not be able to deposit to the vault if QiDAO doesn't have enough MAI liquidity.
In some rare cases when the strategy wants to borrow more, you will be unable to deposit more than the deposited amount + strategy borrowing amount.
The strategy has a limitation - If you are going to withdraw an amount that is less than 0.1% of the acquired amount the transaction will be reverted. Usually, this means that the price of MAI is too high and it's better to wait a bit. However, we may perform a manual rebalancing if the MAI price remains high.
The liquidation price is variable and when AAVE gets close to it the strategy will rebalance the assets by withdrawing from the Balancer and repaying QiDao to increase the collateral to debt ratio. So the user will never be liquidated. Although liquidation is technically possible the chances of liquidation are close to 0%.
