OptyFi strategy chart. OptyFi’s AI engine is constantly taking… | on by Curtis | OptyFi | May 2023
In the previous article, we learned how OptyFi’s dynamic strategies are particularly suited to the ever-changing and ever-expanding world of DeFi.
In this article, we describe OptyFi’s strategy chart and how it is used by the AI Engine to continuously generate and manage optimal DeFi strategies.
OptyFi offers users a “set-and-forget” passive DeFi experience. Place your wealth in a vault that suits your risk profile and let our tech stack do the rest.
OptyFi continuously performs the following five processes:
At the highest level, the Optyfi tech stack serves two functions:
- Find the best strategy using advanced ML algorithms
- Execute any strategy Using smart contracts on the chain
The universe of possible strategies forms a strategy graph. The nodes of the strategy chart represent liquidity pools and incoming edges represent deposits into those liquidity pools.
The structure of OptyFi’s strategy chart is determined by liquidity pools built into the protocol. Adding a new liquidity pool to the protocol creates a new node that potentially generates many more possible strategies.
OptyFi’s AI engine constantly collects data on the liquidity pools in the strategy chart and runs optimization algorithms to predict the returns of the different strategies (paths) within the chart.
After applying risk framework screens (see below), Vault’s AI engine recommends optimal strategies. If the recommended strategy violates the Vault’s on-chain risk limits, the strategy will not execute.
OptyFi’s risk framework can be conceptualized as a filter on the strategy chart. For example, if a particular vault does not allow certain strategies, the paths corresponding to those strategies are removed from the strategy graph.
For partner vaults, OptyFi is able to enforce individual risk limits. The result is a custom strategy chart for each vault. Because constraints may include quantitative risk measures such as value-at-risk, the structure of the strategy chart may change as market conditions change.
In the next article, we will look at the risks that DeFi poses.
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