IIP-78: Launch The Yield Hunter Index ($YHI)

Sounds to be a good and needed extension of INDEX products. I am certainly helping to spread the word. I am also available for other tasks if needed.

Realised I missed something in my original response that I believe is worth sharing pertaining to the money market aspects within this proposal. From my tradfi days of collateralised securities lending and money markets a typical market dynamic existed thus:

Borrowing costs (/lending fees) would typically rise when the market sentiment was bearish on a particular stock and therefore borrowing to short it. (And/or liquidity was generally tight.)

Conversely, bullish market sentiment means less shorting → meaning less borrow demand → meaning lower borrowing costs → lower lending fees…

These of course will not be the only reasons that affect borrowing demand but they will be one.

Typically in an investment strategy with a long term investment horizon, short term market movements are not a concern and lending out the assets for short term traders to short offers a way of making assets productive and the yield from doing so often contributes to the portfolio’s long term performance.

However, YHI is not a fixed objective, long term investment strategy… The frequent rebalancing into higher returns could theoretically mean continually rotating into assets that are undergoing price suppression. Of course, at this point, this is hypothetical, but I believe there is a potential scenario here where capital is at risk in the hunt for yield leading to an overall negative return.


Hi @MrMadila

Yeh, I’ve certainly seen some tokens with incomes mainly based on short demand. Those are the ones I’m trying to avoid with my selection criteria.

I’m using two main criteria to try and remove such unwanted behaviours:

  • using a 28 day average yield to try and exclude short term borrowing to short. On the lending platforms there is 28 day historical data int he UI, and I’ll sort dune dashboards to get better data,
  • Understanding where the yield is coming from. I’m seeing three routes:
  1. Protocol liquidity mining, aBAL is earning ~10% in AAVE rewards. These will be sustained for as long as AAVE want to farm them. Similarly cLINK is really just a COMP farm.
  2. Liquid staking rewards from the protocol (e.g. xSUSHI or bBadger).
  3. Long term use cases for tokens. This is typically a protocol token that has staking, but isn’t liquid. So, by lending it, we have liquidity in return for reduced yields.


  • BNT staking earns ~ 50%, but pays 4% on Cream.
  • SNX staking has 12 months vesting, but lending captures 3%
  • Lending CRV can earn 10%, which is less than the 4 year lock up benefits.