Yield farming or liquidity mining have been at the core of the recent boom of DeFi protocols. From a trading perspective, yield-generating strategies are producing incredibly attractive returns compared to similar strategies traditional capital markets. How to build yield-generating DeFi strategies that correctly balance risk-rewards? This session discusses the new world of DeFi quant yield-generating strategies. We discuss key building blocks required to implement intelligent DeFi quant strategies in an institutional-grade manner. The session will discuss how to think about elements such as risk quantification, back testing , simulations , protocol interactions and many others in the context of DeFi yield-generating strategies.

1. Yield Generating Quant
Strategies in DeFi: Ideas,
Strategies, Building Blocks and
Things You Should Know About

2. Agenda
● A DeFi perspective of yield-generating strategies
● Building institutional-grade yield generating strategies in DeFi
● How to think about risk
● Examples

3. A quick update about ITB…

4. Lots of new customers launches…

5. Luno

6. Indodax

7. GOPAX

8. Plasma Finance

9. FXStreet

10. XT.COM

11. Upcoming Exciting Features
● Real time market-pulse dashboard
● NFT analytics
● More…

12. Quant Yield-generating strategies…

13. The history of financial markets is the history of the
debt and yield…

14. Yield generating strategies are typically associated
with passive models in fixed-income or equities
markets…

15. In recent years quant models made inroads into yield
generating strategies…

16. Main Trends
Smart-Beta Methods
• Generate higher yields applying factor-investment
models to fixed income portfolios
Yield-Based Options
• Model calls and puts based on the yield of specific
securities
High Yield ETFs
• Develop baskets of high-dividend paying equities

17. DeFi introduces new dimensions to quant yield-generating strategies…

18. The DeFi Yield-Generating Perspective
Near-Complete Transparency
Protocol Diversity
Programmability
Governance Changes
Medium Frequency

19. DeFi blurries the line between beta and alpha
strategies…

20. A Risk-Return View of Traditional Yield-Generating
Strategies

21. In DeFi

22. There are many building blocks to develop quant yield
generating strategies in DeFi…

23. A View Into The Building Blocks of DeFi Yield
Generating Strategies

24. You can earn yield in many
ways in DeFi protocols….

25. But can we do it at scale…

26. Scaling DeFi quant yield-generating strategies
at an institutional level…

27. Key Characteristics of Institutional-Grade Quant-DeFi
Yield-Generating Strategies

28. A Perspective of Institutional-Grade Quant DeFi Yield-
Generating Strategies

29. Let’s look at some practical examples…

30. Liquidity Provision

31. Lending

32. Staking

33. Some Key Points About Building Quant DeFi Yield-
Generating Strategies
Rapid experimentation is key
Yield-Generation is happening outside Ethereum
Enable exposure to multiple protocols and crypto-assets
Infrastructure is key
Risk as a first-class component

34. Anyone can run 1-2 yield-generating strategies with
small capacity but running at scale requires
infrastructure….

35. Risk management & DeFi yield-generating
strategies…

36. Traditional portfolio risk management practices don’t
apply in DeFi….

37. We need to think differently…

38. Some Key Points About Building Quant DeFi Yield-
Generating Strategies
Intrinsic
Protocol Risk
Exogenous
Protocol Risks
Other Risk
Factors
• Liquidations
• Imbalances
• …
• Hacks
• Forks
• …
• Asset manipulations
• Centralized control
• ….

39. Summary
● DeFi offers a new playground for quant yield generating strategies
● Building institutional-grade DeFi yield generating strategies require infrastructure
● Risk management should be a key building block of institutional-grade DeFi yield
generating strategies

41. Thank You!
Jesus Rodriguez
jr@intotheblock.io
medium.com/@jrodthoughts
intotheblock.com