ezVaults
Good Entry Yield Generation
A Comprehensive Overview
ezVaults offer a user-friendly “set-and-forget” strategy for yield farmers to earn passive income generated from real yield sources in the decentralized finance (DeFi) ecosystem. The primary sources of yield generation are from selling volatility to traders. Up to 60% of vault TVL can be used for trading. The remaining 40% is deployed into partner Automated Market Makers such as Camelot and Trader Joe.
Yield Generation Explained
Good Entry ezVaults generate yield through three main mechanisms:
Trading Fees: Premiums earned from selling volatility to traders.
AMM Swap Fees: Liquidity deployed into partner AMMs are in full range. It sells volatility across the curve.
Token Incentives: Token incentives are added in each liquidity mining season. This will add further yield for the ezVaults.
The ezVaults automatically reinvest generated yield back into the strategy. This can lead to increased returns over time and maximize earning potential for users.
Deposit and Withdrawal
To start earning passive income with ezVaults, users can follow these steps:
Choose an ezVault: Select an ezVault to participate in by clicking on the product card within the platform. It is recommended to choose an ezVault for an asset you have a long-term bullish outlook on, as this may affect the overall yield potential.
Deposit: Users can deposit their liquidity at any point in time. This is not subject to any conditions. Good Entry charges a deposit fee between 0.1% to 0.3% of the total liquidity to be deposited based on certain market conditions to incentivise certain types of liquidity when the vault is underweight a certain asset. These fees can be dynamically adjusted to incentivise certain types of liquidity to be deployed instead of others to enable the vault to be rebalanced in a proportional manner. Therefore, before depositing assets into the chosen ezVault, review the associated deposit fees. These fees may vary depending on the asset type and the current balance of the ezVault.
Withdrawal: Users can withdraw their liquidity at any point subject to the available liquidity in the ticks. The amount of liquidity users can withdraw is their principal liquidity and any additional swap fees, borrow fees and token yields generated. There is a dynamic withdrawal fee between 0.1%-0.3% depending on the composition of the ezVault. This is to incentivise liquidity in the ezVault is distributed in proportional manner.
Managing Risk
Liquidity Providers may refer to the link ws://wsapi.goodentry.io/delta to retrieve pool delta and conduct their hedging activities accordingly.
Understanding the Risks
Option Risk: Liquidity providers earn yield by selling optionality. This means giving up upside. The vault can never be wiped. However, the value of it when traders make successful trades can result in it being less than market value since upside is given away.
Good Entry is currently working with Signal Plus to allow pool data to be pulled and fed into the Signal Plus platform so that sophisticated LPs can hedge their positions based on their preferred strategies.
Temporary Insufficient Amounts For Withdrawal: When traders execute a trade against ezVaults, they trade directly against the vault. so if the liquidity is being traded and it exceeds the amount that the user wants to withdraw, the user can only withdraw a limited amount of their liquidity.
Technical Risk: As with any DeFi protocol, there are inherent smart contract risks, such as vulnerabilities or exploits. To mitigate these risks, the platform undergoes regular third party audits by accredited auditors, ensuring the security and integrity of the smart contracts
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