Strategies
Why we choose "Boring" strategies for steady growth.
Our Strategy: Boring on Purpose
In a world of extreme APYs, SovaBase stands apart by being intentionally boring. We believe that steady wisdom beats impulsive chasing.
The "Boring" Philosophy
We optimize for maximum sleep at night, not maximum theoretical yield.
- While others chase the next hot protocol, we stick with battle-tested infrastructure.
- While others promise 50% APY, we target a sustainable 7-9%.
- While others optimize for leverage, we optimize for safety.
How We Generate Yield
Our primary strategy involves lending stablecoins (like USDC) on established lending markets.
1. Venue Selection
We only integrate with protocols that pass our rigorous Risk Framework. Currently, we focus on Morpho due to its efficiency and risk isolation features.
2. Asset Selection
We lend against high-quality collateral. We avoid volatile, low-liquidity "meme coins" as collateral.
- Preferred Collateral: Liquid Staking Tokens (LSTs), Blue-chip DeFi tokens.
3. Automated Rebalancing
Yields fluctuate across different lending pools.
- The Old Way: You check rates daily, calculate gas fees, and manually move funds.
- The SovaBase Way: Our "Wise Owl" agents monitor rates 24/7 and rebalance automatically when it makes mathematical sense.
Target Returns
We target a Net APY of 7-9%. This is not a guarantee, but a historical target based on blue-chip DeFi lending rates. In bull markets, this may be higher (currently ~10%); in bear markets, it may be lower. But it aims to be steady.
Why "Boring" Compounds
Compound interest requires time. If you chase a 100% APY strategy that blows up in month 3, you lose. If you stick with a 7% APY strategy for 20 years, you win.
The first rule of compounding: Never interrupt it unnecessarily.