While we discussed Crypto ETFs in our Index Coop article, PieDAO’s take on DeFi ETFs is quite distinctive and worth looking at in greater detail. An ETF is basket of assets (be it stocks, bonds, commodities, or crypto) that can be traded in a group. This allows investors to hedge risk PieDAO has already launched 4 ETF products and has many more in the works.
FOUR ETF PRODUCTS
- DEFI+L gets you exposure to seven of the largest DeFi products (L for Large Market Capitalization).
- DeFi+S is similar although, as you likely guessed, it gets you exposure to smaller, up and coming projects.These projects are typically less proven, but could have a greater upside potential.
- BTC++ Gets you exposure to the four leading wrapped DeFi-friendly Bitcoin tokens.
- USD++ Reminiscent of yUSD on yEARN, this gets you exposure to a basket of stablecoins, splitting your risk among them to limit your exposure.
One advantage of these ETFs vs DPI (DeFi Pulse Index) is the zero Streaming fee (like a management fee). Some of the ETFs have a Swap Fee of 0.1–0.2%, this mean that you as the ETF holder earn a little bit every time the portfolio is rebalanced. The fees are given to LPs (the holder of the ETF) and the swap fee is payed by the trader to rebalance the pie by trading inside it.
MINTING AND REDEEMING ASSETS
Another functionality that PieDAO features is the ability to Mint (add liquidity, from an assortment of the fund’s assets, or straight from Ether) or Redeem (remove liquidity from the ‘pie’ and claim the token allocations). We like this additional user empowerment straight from the UI
Unlike the typical 50/50 Uniswap farming pools, Piedao is using Balancer 80/20 and 70/30 to mitigate impermanent loss.
You might have noticed the ‘n/a’ APR on the DeFi+L Pool. Piedao use a time-based incentive program that rewards users who stay in longer (the longer duration that you remain staked, the more profitable it becomes in token terms). If you like the project for a longer time horizon, this can be quite interesting. If you’re one to regularly re-allocate your DeFi cache into new opportunities, this would probably be less appealing.
Like many other DeFi tokens on the market today, DOUGH will give you access to both their Governance and a portion of the Fees accrued on the platform. You can read more about the DOUGH token in greater detail in their Medium article.
Just this morning PieDAO launched ExperiPie (TPIE++) a new pool design with unlimited possibilities. The ExperiPie will be used to participate in governance protocols to benefit PieDao participants. Through the innovative and flexible nature of the pool it is possible to utilize active governance to take part in any yield farm opportunity.
There’s a lot to like about PieDAO. When you look into the proposals in their docs section you can see some innovative concepts for the crypto space, such as emulating Ray Dalio’s ‘All Weather Portfolio’ with crypto assets mixed in. I am excited to see how this protocol develops.
The photo at the top of the page is from their forums, featuring Ray wearing PieDAO sunglasses.
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