Rari Capital V2: A Yield Maximizing Robo-Advisor for Any Risk Appetite

Chaz Schmidt
Jul 14, 2021
|5 minutes read

As any yield farmer can tell you, chasing higher yields can be a risky endeavour and in most cases is not a sustainable strategy for the average user. It’s all too easy to get caught up in hype and be blinded by outrageous yields. If you aren’t careful or are simply unaware of risks such as hidden backdoors in unaudited smart contracts, it becomes increasingly possible that you could get burned. Getting exploited, “rug pulled”, and otherwise losing your investment is devastating. This sort of risk is intolerable for most investors. Although, that doesn’t mean those same investors aren’t out to maximize their yields; They simply want to strike the right balance of risk versus reward. This is exactly what Rari Capital aims to offer users: a way to maximize DeFi returns while minimizing risks. Rari Capital V2, launching October 20th, 2020, has even more to offer than its predecessor.

Rari Capital is a robo-advisor for DeFi which optimizes for the highest possible yield. Rari Capital’s ‘DeRisking as a Service’ approach is largely what sets them apart from the pack. Armed with the experience of having co-founded Ambo (later acquired by MyCrypto), the Rari team has experienced first-hand the value of earning the community’s trust. So when they set out to build a protocol that anyone can use to maximize returns in DeFi, risk management and transparency were top priorities. If you haven’t already, we recommend checking out our coverage of Rari Capital V1’s guarded launch.

The Rari team has been busy since we last checked in with them developing features and integrations, perfecting new strategies, and preparing for the launch of Rari Capital V2.

Goodbye deposit limits

As part of its guarded launch, Rari V1 launched with deposit limits designed to manage risks and grow the platform in a controlled manner. Thorough risk assessment for integrations and transparency have also been core components of Rari’s guarded launch allowing the team to gradually increase the deposit limits over time. Rari is working with Quantstamp on several security reviews. Rari Capital has since removed deposit limits.

New integrations enable higher yields

Since the launch of Rari Capital V1, Aave and mStable have been integrated into the protocol. It doesn’t stop there though; Rari Capital V2 goes beyond lending protocols and stablecoin swaps to achieve higher returns for its users. In the past few weeks, Rari’s theoretical APY has spiked as high as 109%, thanks in part to the recent mStable integration.

The Rari team continues to explore new integrations to optimize pool strategies including yEarn and Synthetix

3 Pools with Unique Strategies

Rari is introducing 3 pools with strategies that cater to different risk appetites. The Rari team is also working on even more new strategies that will be able to weather any crypto market conditions generating sustainable yields.

Rari Stable Pool (RSPT)

This pool caters to the risk-averse investor seeking to maximize their USD-based returns with caution, making use of exclusively audited smart contracts in its strategy.

Rari Yield Pool (RYPT)

Are you willing to risk it for the biscuit as they say? This pool will always have the highest yield utilizing anything from unaudited smart contracts to even leverage in order to maximize your returns at all costs. You can think of this pool as: higher risk, higher reward.

Rari ETH Pool (REPT)

If you’re the type of person that measures their net worth in ETH, this pool is for you. The Rari ETH Pool aims to provide consistent returns based in ETH.

Rari Governance 

The upgrade to version 2.0 also introduces decentralized governance to Rari Capital via Rari Governance Tokens (RGT). RGT holders will decide how to govern the protocol and the Rari Treasury, determining new protocols integrations, pool parameters, and risk parameters. RGT can be staked to receive fee discounts from the Rari Protocol, a feature powered by Chainlink. Rari Capital V2 is designed so that 70% of all protocol revenue will be used to buy and burn RGT, reducing the total supply.

Passthrough Governance

Rari’s governance has a cool feature called ‘Passthrough Governance’ where if a pool begins to accumulate tokens such as COMP or BAL, RGT holders can use these tokens to engage in their respective governance systems. It’s a practical solution that mitigates the current shortcoming found in other protocols where users must sacrifice the ability to engage with token governance in order to utilize an automated strategy. As Rari continues to integrate more and more protocols, this feature may become more important over time. Some protocols issue rewards for participating in governance which means this feature could potentially be used as part of a yield generating strategy at some point in the future.

Liquidity Mining

87.50% of RGT will be distributed over a 60 day period via a liquidity mining program set to start on October 20th, 2020 with the launch of Rari Capital V2. The remaining RGT is reserved for the Rari team and is subject to a vesting schedule. For full details, we recommend reading the RGT announcement post. It’s worth noting that while the distribution will last 60 days nearly half of the tokens will be distributed in the first 15 days. Additionally, “there is a ‘burn’ as a user when you attempt to transfer your $RGT before the 60-day distribution schedule is expired.”

Concluding Thoughts

Rari Capital V2 further cements its product-market fit by offering more to users of any risk appetite. Whether you’re looking to earn risk-minimized returns on idle ETH or stablecoins or you’d rather chase the highest yields, Rari Capital’s sophisticated robo-advisor can be an effective tool in your arsenal. And it’s safe to expect more pools and integrations on the horizon, especially with the introduction of community governance. It’ll also be curious to see how the community chooses to govern the protocol and in what ways they may evolve each strategy.

Rari Capital V2 is set to launch on October 20th, 2020. Be sure to check it out at Rari Capital when the time comes and follow them on Twitter in the meantime to hear the latest regarding the launch of V2.

Disclosure: This post is part a promotional series; We’ve partnered with Rari Capital to help educate and inform the community about the launch of Rari Capital V2. As always, we’re committed to providing the entire community with quality, objective information, and any opinions we express are our own.