Our mission is to bring simple crypto exposure to all investors, from small to large.
To achieve that, we need to find ways to minimise the inherent volatility and risk of the crypto market, which can put off some investors. Our crypto index funds are already less volatile and less risky than investing in individual assets, but we wanted to go one step further.
What if our crypto index funds could leverage the best of DeFi to generate additional passive yield?
That’s where Yearn, one of DeFi’s pioneers, comes into play.
What is Yearn?
Yearn Finance is a DeFi protocol that allows users to optimise earnings on their crypto assets through their yVault product. yVault uses strategies that seek out the highest risk-adjusted yield in DeFi, without the need for traditional banks or intermediaries.
Yearn is a DAO, meaning that the ecosystem is decentralised and governed by YFI token holders who submit and vote on proposals that make decisions about the platform.
YFI is also an asset within the Phuture DeFi Index, which aims to bring exposure to the top assets in DeFi.
Security at Yearn
At the heart of Yearn’s protocol, is the security of users’ funds. We’ve asked them to explain how their process of tech auditing and due diligence work.
@Corn - core contributor at Yearn.finance:
“Yearn puts security first to ensure funds are safe and not at risk, 24/7. Yearn's risk framework evaluates seven key metrics:
- TVL impact
- Third-party audits
- Internal code review
- Longevity protocol safety
- Team knowledge
- and testing.
This framework is applied to strategy allocations in every single vault. Yearn's Safe Farming Committee meets regularly to evaluate moves in positions, market trends, and ensures operational knowledge is spread across the team of strategists."
To learn more about Yearn’s risk status, see their live dashboard here.
Phuture and Yearn finance
Yearn has been essential to the DeFi ecosystem since its inception, and we wanted to embed Yearn’s yield-generating protocol into our crypto index funds.
We’ve been able to integrate Yearn into our first index, PDI, to maximise the returns our users can have when investing in the Phuture DeFi Index. We’re proud to work with such a pivotal force in the DeFi ecosystem.
“The Yearn community is proud to support Phuture’s mission to bring safe and simple crypto exposure to all investors. We were founded based on the belief that DeFi can reinvent how financial products work, and we’re pleased to be part of this reinvention within the crypto index sector." — @Corn, core contributor at Yearn.finance
What is PDI?
PDI, the Phuture DeFi Index, is a cryptocurrency index composed of the top DeFi assets on Ethereum, weighted by market capitalisation. It is the first and only DeFi index to generate additional yield from an underlying protocol, utilising Yearn’s platform.
How PDI generates returns
The Phuture DeFi Index generates returns in two ways:
- Appreciation of the assets within the index,
- Additional returns by placing a portion of the underlying assets in Yearn.
PDI utilises rigorous criteria to select and manage the assets, based on:
- Token utility
- Asset safety
You can learn more about the methodology here.
How does PDI utilise Yearn?
We rebalance our index every month, guaranteeing that the assets and their weights reflect the top DeFi assets, no matter the market.
Once rebalanced, we deposit a portion of the index’s underlying assets to Yearn’s yVaults for the best risk-adjusted return in DeFi.
Example: On May 2022, these were the assets that composed the Phuture DeFi Index:
During this month, we deployed part of the AAVE and SUSHI reserves into Yearn Vaults to capture additional yield.
This benefits investors in two ways:
- Bear market: This additional yield softens the volatility of the index, provides a cushion for the returns and reduces potential losses.
- Bull market: In combination with the assets appreciating, the yield from Yearn’s protocols boosts the returns of the index.
Phuture’s smart index strategies help investors navigate all markets. Ready to invest?
Phuture (PHTR) is a decentralised crypto index platform that simplifies investments through automated, themed index funds on Ethereum. Accessible by anyone with an internet connection, Phuture is perfect for investors looking to upgrade their crypto investment strategy. Founded in 2019, Phuture has raised USD 3.75 million from VCs, crypto funds and investors such as the CEO of Bitcoin.com.