SYI - Stable Yield Index is obsolete and replaced with PAY - Pulse Aggregate Yield

Hi Matt,

Great idea, I can see a need for stable coin based products for many users.

A few questions for discussion:

  1. Is it going to be classed as a security?
  2. would it run as a standard issue and redem[option for all the underlying, or something more like a more active fund where people deposit / issue DAI or USDC, and we maintain a liquid portion as non income generating tokens, and the rest is placed in the income generating strategies.
1 Like

Another Q for discussions:

How do we charge fees on it:
Streaming fee is one option however, would the customer be happier with us taking a % of the yield. So zero yield generates zero income for the coop.

1 Like

A streaming fee may be easier to implement, perhaps, and be more transparent up front as to what a user can expect to pay in fees. With what token would a streaming fee be paid? Does it have to be paid in a single token? (I’m less familiar with this mechanism, technically)

Keeping a percentage of the yield of each token would allow the Coop to keep some of those yield generating assets like aDai in a similarly diversified proportion as SYI that would further compound in the treasury.

I believe applying streaming fee on SYI would be the simplest way to generate an income from this product, much like how DPI, CGI & FLI do it.

The fee structure is confirmed at DG2, but I think it would be fair to assume any fee structure would be outlined at DG1 and the community will have ample time to comment.

I’d be interested to see what people think is a suitable streaming fee for this type of product.

1 Like

would kind of depend on the yield we expect the product to generate? if it’s 10%, I’d want to take insurance against this product given the complexity, which takes away 3% of that yield. I’m left with 7%, so maybe 50bps fee? Not sure, these are just off the cuff thoughts. Keen to see what everyone else thinks.


Hi All,

I added a poll to gauge community feedback. I am hoping to determine if it worth progressing SYI beyond a forum post. Looking forward to see what the community thinks. Thank you for all the feedback.

Piggy backing on this comment, this product reminds me of a Prime Money Market Fund. I looked at JP Morgan’s Prime Money Market Fund (VMVXX) and it’s expense ratio was 0.51% for reference, so I think @verto0912 is in the right ballpark here. Would be interesting to see what we anticipate the yield to be on the final product though.

1 Like

Hey @Matthew_Graham, re the poll, I’m not sure of the wording here. I think this needs more research, to consider if the idea is appealing enough for DG1. Maybe that’s what the “Yes” vote is meant to indicate?

My questions would be:

  • Methodology & composition

  • Yield

  • Competitive analysis

  • Risk matrix and framework (Lazy Ape, for example, is exposed to 10 different protocols)

Leave it up to you to decide if these are best addressed here or in the more in-depth post. If it’s your intention to undertake this work after a “Yes” in the poll, then I’ll happily vote “Yes”.

Yeah, I voted for more research.

I seems to me that the low cost entry (versus Yearn etc.) might be mitigated by lower costs on L2’s in the not too distant future.

Also, there are other similar products - seems a similar idea.

Neither of those points make me against the idea but they do highlight that the pressure on performance will likely be high - tempting risks.

Hi @verto0912.

Correct, Yes means more research.

Given the interest, we will look to further our discussions with other DAOs in effort to get the right balance. That just means time and effort is needed in refining this product to maximise its appeal.

I’ll be sure to check this out and highlight any differences. Most products on the market have static allocation whereas SYI is dynamic in the sense that as the ecosystem grows/changes with time, SYI’s composition changes.

1 Like

It’s becoming an even hotter topic - Gro by former Revolut and Spotify exec is planning to offer a simple and safe high return stable coin product - Exclusive: Gro Plants New Decentralized Finance Products With $7.1M Seed – Crunchbase News We should get them to use us!


Really glad to see more original work around product being done by community members. It’s clear this came from a place of love.

I do want to use this index as an example of how we should explore the exploration and implementation of new products.

The first principle we should build upon is that we build products to solve our customers needs. That should be the first step in the exploration of any new products because if we don’t all agree on what the customer problem is, we won’t get anywhere.

Currently, in the proposal above, a lot of energy and space is devoted to thinking about the implementation and doing market analysis based on TradFi comparables. I don’t think this is enough to align on building a product.

This is really the only place in the post I see you getting specific about the customer. I think we need to expand on this way more and detail out what the customer problems are and the job stories associated with them. Once we understand that, then only can we really go deep into the implementation.

For example, with the MVI we had: “When I read about all the NFT and digital experiences being built on Ethereum, I want to be able to invest in this new ownership economy, so that I can make money as it develops.”

Generally follows the format of “When…I want to… so that…” - this gives us context on what the customer problem is and why they are having that problem.

Currently, you roughly hint at it throughout the post, mostly in conjunction to talking about various features of the product.

I know at this point you must be super annoyed and pissed off at me for this post! I’ve felt the same way when trying to push products at Set. I am certainly not aiming to dismiss the product or dismiss innovation, but rather pushing for a customer-centric culture that will end up yielding us better outcomes over the longer term.

Being customer obsessed is really hard, especially when everyone else has such strong feeling about product, but super important. Here is a copy of some of the notes and videos I watched to learn in case you find it useful: Product Strategy Research - Google Docs

I would be happy to work with you and whoever is to be involved with the Product Working Group in creating a analysis/research framework for how we want to structure exploration of products going forward and do that process for the product as well.

Of course, feel free to lmk if you think I’m wrong here!


Hi @puniaviision,

Thanks for the feedback.

Alright after some thought and bouncing ideas around the “When…I want to… so that…” statement would be something like what is shown below.

When I hold stable coins in my portfolio, I don’t want to actively manage them across the DeFi ecosystem. Instead, I want to passively diversify my capital across a range of protocols, so that I can get the highest return while minimising protocol-specific risk.


I really like this idea overall. But I am curious about the level of overlap/redundancy this has to other projects out there. Is there a significant advantage or difference here compared to just using a Yearn vault, for example? Even if not, I think its fine to have competing products.

For prioritization, I would think to put the Indexes that are serving unmet needs at the top of the queue and those that overlap more with other products at a lower priority.

SYI v Lazy Ape

Lazy Ape (YLA)

YLA is an interest bearing savings account, where you can get really good interest on USD-pegged capital based on a basket of investment strategies from Yearn v1 Vaults. The weights within YLA are dynamically adjusted weights according to the TVL. At the time of writing YLA consists of the following:

Allocation - V1 Yearn Vault - APR

  • 8.61% - yvCurve-Compound - 21.32%
  • 36.04% - yvCurve-3pool - 10.36%
  • 17.3% - yvCurve-GUSD - 14.85%
  • 26.96% - yUSD - 16.25%
  • 11.11% - yvCurve-BUSD - 20.59%

Collectively this make up of Yearn V1 vault is generating a yield 14.8% without incentives.

Without the boosting rewards and based solely on the Yearn vault income - YLA yields around 14.8%. YLA currently offers around 57%. Incentives make up 42% of the 57% in yield as detailed in the FAQ Medium article.


SYI can allocate capital to any of the underlying products featured within YLA but is unlikely to receive INDEX incentives equivalent to CVP boosting incentives. Looking past the boosting incentives, SYI offers a higher yield, that is more diversified across the ecosystem and has a lower risk profile. Yearn V1 vaults rely on COMP & CRV incentives to remain viable products.

When comparing limitations around the methodology, YLA is restricted to V1 Yearn vaults unlike SYI which will reallocated capital to capture the best risk adjusted returns across the entire Ethereum ecosystem. An obvious example, SYI intends to include two V2 Yearn vaults which are ineligible for inclusion in YLA.

YLA is an income stream generating product whereas SYI is an auto-compounding NAV increasing product. This is a fundamental difference that serves very different use cases. Due to the NAV compounding, SYI improves any loan’s collateralization ratio over time.




Deposit One or more of six stable coins into a liquidity pool and receive mUSD. mUSD is an LP token backed by fully collateralized stable coins. Deposit mUSD into a savings contract and receive a imUSD token which is an interest bearing version of the mUSD token.

Alternatively, a user can mint imUSD - but this is incredibly gas heavy. When the gas price is 48 gwei, a 1 ETH transaction into imUSD cost $71.77. Comparatively, purchasing 1 ETH of DPI costs $17.71, which is less than 25% the cost of minting imUSD.

imUSD generates yield by depositing the underlying stable coin tokens into a lending protocol earning interest (Tier 1 in SYI). In addition to the yield, trading fees from users swapping from one stable coin to another via mStable’s mAsset pool and from fees from minting/redeeming mUSD are also included. imUSD can be deposited into a vault to earn MTA, incurring a lock up period and even then 80% of the MTA rewards are in escrow for 26 weeks before being released to the user. This will only be viable whilst MTA incentives are maintained.


SYI deposits selected stable coins into lending protocol similar to imUSD - but that is where the similarities stop. SYI periodically redeploys capital to maximise returns across the ecosystem whereas mStable has limitations by only using lending protocols to generate yield and is heavily reliant on swap/mint/redeem fees to boost returns.

Purchasing SYI on a secondary market offers a better user experience with lower transaction costs compared with mStable. Therefore SYI offers a better user experience - especially for small account balance when gas prices are high.

imUSD has very limited secondary market use cases and the current fee APY component is likely to be abnormally high due to the MTA incentives driving demand for imUSD. With the support of incentives, SYI will have a liquid secondary market unlike imUSD. Unlike imUSD, the compounding returns will not be influenced by any Index Coop incentives. imUSD returns are likely to fall when MTA incentives via the staking contract are reduced as this will reduce the mint/redeem/swap fees being generated by mStable.


This product is a massive improvement on existing strategies. An exchange traded token that enables the holder to quickly enter and exit positions fills a massive consumer need. They do this in the following way.

  • Money market funds need to be highly liquid. Token holders maintain liquidity to ensure against liquidity crunches or market crashes. Current solutions force the token holder to take multiple steps to unlock their liquidity. SYI is extremely flexible and gives token holders instant liquidity without having to enter and exit vaults.

  • Venue for taking profits. Right now if I want to take profits and have those profits remain liquid enough for me to quickly re-enter the market (ie not deposited in a vault) I am constrained to holding pure stable coins. This product gives traders a clear option for taking profits, continuing to earn yield, and maintaining liquidity.

IMHO the customer is any crypto user / organization that wants to maintain liquidity while holding a yield bearing asset. Guarding against liquidity shocks is fundamental for any sustainable portfolio.

If this product was on the market today I would immediately place 20% of my net worth in it. Optimized stable coin yields is an absolute must have in the market right now. Products like SYI and SDI fit an immediate needs within DeFi. @verto0912 has been talking alot about expanding our indices offerings to more products that offer downside protection - in my eyes this is the perfect starting point.

On a final note, this is the perfect product for us to work through many of the intrinsic productivity problems our community has been grappling with for the past 9 months - we don’t have to worry about governance or constant rebalances. This will be one of our flagship product and a perfect fit to introduce our customers to the power of intrinsic productivity.


I agree with @BigSky7. In traditional investing, bond funds looking yield have a giant demand. Creating a product that will provide 10%-12% with very little market risk can open doors that traditional defi products can’t.

When on chain asset management really gets going, products like SYI will become backbones of optimized portfolios.


I agree with @BigSky7 latest post here. The potential for this index product is huge across so many user types; it’s a product for diversification and down cycles (h/t @verto0912) - which the industry desperately needs; and it’s a big motivator to make us solve the intrinsic productivity stuff we often talk about but don’t do much about (yet).

To me, this index product makes most sense for us to launch right now while we build out the FLI family.

What about building a forward looking tracker / voting tool using Google Sheet/other to see where the Coop thinks we should focus not just at a point in time but over a 3-6 month period?


I’d also look to allocate a similar % of net worth into this!