Yield-Aggregating Tokens: The Power Of Automating Yield Aggregation

May 28, 2022, 2:09PM
6 min, 5 sec READ
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A new type of asset-backed token has begun to emerge in recent years: the yield-aggregating token. Harness the power of yield aggregation.

When it comes to earning a consistent return on investment, many people turn to the stock market. However, for those looking for a more reliable, efficient, and stable source of income, there is another option: asset-backed tokens.

Asset-backed tokens are digital assets backed by physical assets, such as commodities or real estate. They offer a way for people to diversify their investment portfolios and generate a steady stream of income by leveraging the power of high-tech financial instruments.

Although asset-backed tokens have been around since 2013, they were initially used exclusively for trading and investment purposes. The majority of these tokens were created using Counterparty or other similar platforms. However, a new type of asset-backed token has begun to emerge in recent years: the yield-aggregating token.

What Are Yield-Aggregating Tokens?

Yield-aggregating tokens are designed to provide investors with a way to pool their assets and earn a consistent return on investment (ROI). Unlike traditional markets, where investors have to purchase individual assets and manage them on their own, yield-aggregating tokens automatically aggregate the value of all underlying assets to increase the return for investors. 

This means that instead of acquiring and managing individual stocks, bonds, commodities, or currencies, investors can purchase a single token backed by those same assets. The result is an increased rate of return with no extra work required.

Currently, several promising projects are attempting to create yield-aggregating tokens, including Mozaic. However, the majority have yet to release any products or services to the public because creating a successful yield-aggregating token is highly complex. It requires highly technical programming skills or an extensive team of computer scientists, engineers, and data scientists. 

Currently, the MOZ token is not yield-aggregating but the vault is hence, to move coins to other vault protocols, predictive modelling is used. 

How Can Investors Use Their Assets To Yield Farming In DeFi?

Unlike traditional markets, DeFi allows investors to yield their assets in farming easily without much know-how. For example, if an investor wants to be a part of the mining community, they have to buy mining equipment, arrange power costs at their home, and spend time maintaining it all. However, with DeFi's easy access to yieldable resources pooled together, the investor can gain a portion of the mining rewards without the hassles.

For example, staking the $MOZ token in the Mozaic Protocol will allow users to govern the protocol and direct ecosystem rewards while discussing, proposing and voting on changes to the protocol. Users can also flexibly time lock their tokens and receive veMOZ, gaining more voting power and rights in the ecosystem, truly facilitating the decentralization and governance of the Mozaic protocol. 

What is Mozaic?

Mozaic is an omnichain protocol that intends to leverage machine learning to predict and search for the highest yielding and most capital efficient multi-chain yield farming opportunities, while completely automating this process for the end user. Mozaic also states that they will harness LayerZero technology and Stargate Finance to launch ‘Omnichain Index Vaults,’ to allow users to seamlessly farm on any blockchain.

To understand how the Omnichain index vaults work, Mozaic have simplified the process:

  1. A user zaps (deposits) a supported cryptocurrency into one or more of the omnichain index vaults:
    1. Vault 1 (Stablecoins): USDC, USDT, BUSD
    2. Vault 2 (Altcoin Majors): ETH, BNB, SOL, ARB (tbc), OPT, AVAX.
  2. The Mozaic algorithm will rebalance the zapped deposit among the cryptocurrencies in the vault;
  3. The algorithm then aggregates deposits and begins yield farming on the most optimal blockchain, automatically compounding and rebalancing the vaults at the most efficient intervals. 

Mozaic: Empowering Yield Farmers with Institutional Technology

Although the DeFi phenomenon has certainly cooled, the now saturated DeFi market has added unnecessary levels of complexity to a simple question of; "Where can I stake my tokens to achieve the highest return?" The Mozaic team intends to eliminate this problem by streamlining the DeFi experience and providing the most competitive yield-bearing strategies in the industry. So how does it all work? 

Well, the Mozaic omnichain vaults are powered by a machine learning algorithm they have called Archimedes. Eureka! 

Archimedes' interaction lies under the hood of the Mozaic omnichain index vaults where the algorithm:

  • Uses predictive metrics to periodically rebalance deposits in the omnichain index vaults;
  • Continually searches pre-approved protocols to farm with aggregated funds.
  • Automatically compounds and switches yield farms at the most efficient intervals

It all sounds incredible if the team can deliver and they’ve said that initial tests are proving to be optimistic so we’ll see if they can withstand the troughs of the current market. 

Save Time by Harnessing LayerZero

Mozaic aims to provide the most optimal yield available to its users by harnessing the power of multiple blockchains through LayerZero technology. With this technology integrated into Stargate Finance's 'unified liquidity pools that offer instant guaranteed finality,' Mozaic will be able to offer users the best yield from any chain, ensuring cross-chain slippage and fees are the most optimal in the industry.

Layerzero currently supports:

  • Ethereum
  • Binance Smart Chain
  • Avalanche
  • Polygon
  • Arbitrum
  • Optimism
  • Fantom

Through LayerZero and omnichain interoperability, it becomes possible to access entire blockchains with just one click. 

Where can I go to learn more about Mozaic? 

The founders of Mozaic and active community members are always discussing the protocol development and the DeFi landscape in the Discord. You can access the Mozaic Discord here. The Mozaic team also seems to regularly update their progress through Medium, which you can also access here. As the protocol transitions into a DAO, members can use their $MOZ governance tokens to vote on and direct ecosystem rewards to proposals put forth by the DAO.

The Mozaic team has the potential to create a powerful tool that will give users a simple, one-click approach to yield farming. With omnichain interoperability users will be able to access multiple blockchains by harnessing the Mozaic index vaults. Built using LayerZero technology and integrating with Stargate Finance, Mozaic is surely a protocol worth keeping an eye on, even during these turbulent times in crypto. 

Author - Calum Roberts

Prop firm trader at Star Beta and founder of Mozaic.

From my humble beginnings driving trucks in the Australian Outback mining for gold, to working in company with Australia's most successful cryptocurrency traders, my passion has piloted me to launch my own defi protocol. My professional and now senior role at Star Beta has given me the opportunity to network with industry greats of all expertise, some of whom I’m proud to call my friends. Applying my ethos in life of less is more, combined with my business and finance acumen, I am filled with energy to create lasting solutions for a community I care about. It is from these foundations that my drive to help defi users through Mozaic is fuelled.

Outside of work I enjoy travelling, whether that be to professional events on the far side of the world or not-so-professional yet memorable moments of life.

I never let an opportunity go to waste which is why I am here. I enjoy connecting with like-minded people so feel free to drop a message.

Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.