Yearn Strategy Brownie Mix

Morpho Strategy

This repo contains a strategy for Morpho protocol on Ethereum mainnet. The strategy supplies strategy want token to Morpho protocol. If the protocol can find a match from the borrowing side it connects two sides for a peer-to-peer deal providing better APY for both sides. Otherwise, the liquidity is supplied to the underlying protocol, Aave or Compound, which provides lower APY. When a new borrower comes in, he is matched with the highest liquidity supplier. This flow goes until the full p2p liquidity is matched or all provided gas is used. See base strategy contract MorphoStrategy.

Compound

Compound protocol also rewards with additional token COMP which is swapped for strategy want token using ySwap. There is also a fallback option to use Sushi v2 (default) or Uniswap v2 if ySwap is not set. Except from claiming and swapping reward token, the strategy is the same as base Morpho strategy. See MorphoCompoundStrategy.

Aave

Aave protocol doesn't provide any additional rewards token so Aave strategy just extends the base Morpho strategy. See MorphoAaveStrategy.

Want token

The strategy and tests are written for multiple tokens on Morpho protocol: USDT, USDC, DAI, WETH and WBTC. The strategy can be easily set to use any token by providing a token address to the strategy constructor. For more tokens see Morpho protocol dashboard.

Tests

There are two strategies and some tests are not the same so they are separated into two folders:

• aave
• compound

By default, tests will run for both strategies using USDT as want token. To add additional tokens for testing, expand token params list or remove all to disable tests for a specific strategy.

• aave strategy want token list
• compound strategy want token list

Liquidity data

The liquidity data can be collecting to CSV file using Github Actions Workflow data.yaml. Currently, it's disable, to enable change workflow job and set strategy addresses that you want to track. It is scheduled to run ones per day. Workflow supports tracking single and multiple strategies by defining strategy addresses separated by commas. The liquidity data is appended to a file after each Github Action is completed.

See example of the collected data: example_file.csv. Files for each strategy are created in the folder data with name: strategy_ADDRESS.csv. The data is collected using Python script.

Script for collecting data can be run manually, first define environment variable STRATEGY_ADDRESSES in file .env. Run command:

brownie run scripts/write_liquidity.py

External calls to Morpho

Link to docs for using IMorpho interface:

• supply
• withdraw
• claimRewards

ILens interface is used to fetch the data from Morpho protocol using just view functions. Because Morpho uses two different protocols some functions are not the same. Differing functions are separated per protocol in interface package lens. ILens has functions that are the same for both protocols:

• getUserUnclaimedRewards
• getCurrentSupplyBalanceInOf
• getMainMarketData

MORPHO rewards

Morpho protocol also provides its own rewards tokens: $MORPHO. Rewards can be claimed by providing Merkle proof. For more info see Morpho docs. On how to claim rewards check out function claimMorphoRewards. Morpho token still doesn't have a pair for trading but it's added to ySwap for future swapping to want token.

Installation and Setup

1. Install Brownie & Ganache, if you haven't already. Make sure that the version of Ganache that you install is compatible with Brownie. You can check Brownie's Ganache dependency here.

2. Sign up for Infura and generate an API key. Store it in the WEB3_INFURA_PROJECT_ID environment variable.

export WEB3_INFURA_PROJECT_ID=YourProjectID

3. Sign up for Etherscan and generate an API key. This is required for fetching source codes of the mainnet contracts we will be interacting with. Store the API key in the ETHERSCAN_TOKEN environment variable.

export ETHERSCAN_TOKEN=YourApiToken

• Optional Use .env file
  1. Make a copy of .env.example
  2. Add the values for ETHERSCAN_TOKEN and WEB3_INFURA_PROJECT_ID NOTE: If you set up a global environment variable, that will take precedence

4. Download the mix.

brownie bake yearn-strategy

Basic Use

To deploy the demo Yearn Strategy in a development environment:

1. Open the Brownie console. This automatically launches Ganache on a forked mainnet.

brownie console

2. Create variables for the Yearn Vault and Want Token addresses. These were obtained from the Yearn Registry. We load them from a different repository found in the brownie-config.yml under dependencies (yearn/[email protected]):

from brownie import project
yearnvaults = project.load(config["dependencies"][0]) #load the base vaults project to access the original Vault contract
Vault = yearnvaults.Vault
Token = yearnvaults.Token
vault = Vault.at("0xdA816459F1AB5631232FE5e97a05BBBb94970c95")
token = Token.at("0x6b175474e89094c44da98b954eedeac495271d0f")
gov = "ychad.eth"  # ENS for Yearn Governance Multisig

or you can get the contracts ABI from etherscan API, make sure you have exported your etherscan token.

from brownie import Contract
vault = Contract("0xdA816459F1AB5631232FE5e97a05BBBb94970c95")
token = Contract("0x6b175474e89094c44da98b954eedeac495271d0f")
gov = "ychad.eth"  # ENS for Yearn Governance Multisig

3. Deploy the Strategy.sol contract.

>>> strategy = Strategy.deploy(vault, {"from": accounts[0]})
Transaction sent: 0xc8a35b3ecbbed196a344ed6b5c7ee6f50faf9b7eee836044d1c7ffe10093ef45
  Gas price: 0.0 gwei   Gas limit: 6721975
  Flashloan.constructor confirmed - Block: 9995378   Gas used: 796934 (11.86%)
  Flashloan deployed at: 0x3194cBDC3dbcd3E11a07892e7bA5c3394048Cc87

4. Approve the strategy for the Vault. We must do this because we only approved Strategies can pull funding from the Vault.

# 10% of the vault tokens will be allocated to the strategy

>>> vault.addStrategy(strategy, 1000, 0, 2 ** 256 - 1, 1_000, {"from": gov})
Transaction sent: 0xa70b90eb9a9899e8f6e709c53a436976315b4279c4b6797d0a293e169f94d5b4
  Gas price: 0.0 gwei   Gas limit: 6721975
  Transaction confirmed - Block: 9995379   Gas used: 21055 (0.31%)

If you are getting a revert error, it's most likley because the vault can't add more strategies, you can check the vault.debtRatio() the value should be under 10,000. You can try to lower one of the existing strategy debt ratio vault.updateStrategyDebtRatio("0x1676055fE954EE6fc388F9096210E5EbE0A9070c", 0, {"from": gov})

5. Now we are ready to put our strategy into action!

>>> harvest_tx = strategy.harvest({"from": accounts[0]})  # perform as many time as desired...

Implementing Strategy Logic

contracts/Strategy.sol is where you implement your own logic for your strategy. In particular:

• Create a descriptive name for your strategy via Strategy.name().
• Invest your want tokens via Strategy.adjustPosition().
• Take profits and report losses via Strategy.prepareReturn().
• Unwind enough of your position to payback withdrawals via Strategy.liquidatePosition().
• Unwind all of your positions via Strategy.exitPosition().
• Fill in a way to estimate the total want tokens managed by the strategy via Strategy.estimatedTotalAssets().
• Migrate all the positions managed by your strategy via Strategy.prepareMigration().
• Make a list of all position tokens that should be protected against movements via Strategy.protectedTokens().

Testing

To run the tests:

brownie test

The example tests provided in this mix start by deploying and approving your Strategy.sol contract. This ensures that the loan executes succesfully without any custom logic. Once you have built your own logic, you should edit tests/test_flashloan.py and remove this initial funding logic.

See the Brownie documentation for more detailed information on testing your project.

Debugging Failed Transactions

Use the --interactive flag to open a console immediatly after each failing test:

brownie test --interactive

Within the console, transaction data is available in the history container:

>>> history
[<Transaction '0x50f41e2a3c3f44e5d57ae294a8f872f7b97de0cb79b2a4f43cf9f2b6bac61fb4'>,
 <Transaction '0xb05a87885790b579982983e7079d811c1e269b2c678d99ecb0a3a5104a666138'>]

Examine the TransactionReceipt for the failed test to determine what went wrong. For example, to view a traceback:

>>> tx = history[-1]
>>> tx.traceback()

To view a tree map of how the transaction executed:

>>> tx.call_trace()

See the Brownie documentation for more detailed information on debugging failed transactions.

Known issues

No access to archive state errors

If you are using Ganache to fork a network, then you may have issues with the blockchain archive state every 30 minutes. This is due to your node provider (i.e. Infura) only allowing free users access to 30 minutes of archive state. To solve this, upgrade to a paid plan, or simply restart your ganache instance and redeploy your contracts.

Resources

• Yearn Discord channel
• Brownie Gitter channel