Maximizer Docs

Maximizer vaults

What are Maximizer vaults?

Maximizer vaults are a novel type of yield optimizers, with the unique attribute of being built around a "no-selling" philosophy. The assets deposited in these vaults are invested in multiple strategies so as to earn more assets. Classic yield optimizers/auto-compounder usually sell the yielded asset to buy more of the principal, creating an unsustainable sell pressure on the project's token being used as a reward. This also denies the users the potential growth of the entire portfolio.

But Maximizer is built differently. Instead of simply dumping the yielded token, the vaults reinvests them in other strategies, to compound the rewards without ever selling the yield.

How does that work exactly?

Let's compare the two strategies to show how Maximizer no-sell vaults approach is vastly superior for both the users and the protocol giving out rewardsΒ :

For example: a user deposits QI-AVAX LP tokens on Trader Joe to receive JOE tokens as reward. By using the typical auto-compounding yield optimizers, the user will have their yielded JOE tokens sold every few minutes. Not only does this put a heavy pressure on the JOE token price, but doing so would have resulted in users missing out on the whole JOE run-up from just a few cents to $5+. Therefore a smarter choice would be to not sell the yielded assets at all and hold them.

Let's take the same example, but the Maximizer way this time. If a user deposited QI-WAVAX LP in Maximizer vaults, they would then collect the yielded JOE tokens, deposit them into xJOE, and then deposit these in the xJOE farm. The user would have benefited from JOE token price appreciation, as well as extra JOE farming through the xJOE farm. As a result, Maximizer is effectively alleviating sell pressure from the JOE token, while supporting the growth of Trader Joe.

Please note that since then, xJOE has been deprecated so the strategy would be slightly different now. Instead the vault would compound the JOE token into sJOE, receiving USDC, which would then go back the treasury and be used in the stablecoin vaults/strategies.

No-sell vaults were the first product released by Maximizer, and were initially open to everyone's deposit. Since the launch of the ecosystem treasury protocol, they have been deprecated, and will instead be used internally to grow the treasury furthermore. The bonding mechanism of the ecosystem treasury will be used to bootstrap vaults TVL (Total Value Locked), and will keep feeding it when new mint options are added.