Beaver Finance
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Beaver Finance is the first- protocol in DeFi to combine single asset yield farming with options-based impermanent loss hedging.
Impermanent loss has become a major concern for liquidity providers, as it continues to induce volatility in LP returns, specifically for assets with diverging price trends. As decentralized market making continues to move towards concentrated liquidity, the effects of impermanent loss are even more amplified.
Beaver answers to that concern, the protocol comprises several modular components which allow non-custodial, active, and effective management of impermanent loss.
Beaver’s Asset Allocation Engine dynamically pairs equal-valued tokens from LP pools by algorithms for supplying liquidity on major DEXs, which enables users to automatically gain the high yields of dual-token LP farming in single-token staking mode.
Beaver’s Impermanent Loss Hedging Engine supported by, protects LP assets of farming positions by constructing European Option Portfolios for hedging against IL.
Beaver provides 2 types of yield strategies: Liquidity Provider Mining and IL Hedger Mining, both of which only require single-sided staking on the Beaver platform. The functions and differences between LP and ILH are as follows:
Beaver Finance will support currency pairs with high yields and optimal risk mitigation. Users can choose any token pairs and deposit a single asset of their choice, supported by the platform into Beaver LP pools and leave the rest of the operations up to Beaver’s algorithm, including token pairing, LP supplying, staking, compounding, and reward accrual. Enjoy the convenience of fully automatic yields!
The capital within ILH pools is used to hedge possible Impermanent Loss of LP mining positions to almost zero. Option portfolios are constructed by rigorous mathematical models and automatic Delta Neutral hedging are also carried out simultaneously, which not only shields LP assets from IL but also ensures the stability of ILH pools.
Beaver’s two strategies complement each other, offering much higher single-token yields while minimizing the infamous Impermanent Loss of liquidity mining. Multiple advanced algorithms applied in two sections of asset pools dramatically elevate capital efficiency, return rate, and system solidity.
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