Stake
Introduction
BIM Protocol is a Decentralized, Multichain Yield Optimizer that allows its users to earn compound interest on their crypto holdings. BIM earns you the highest APYs with safety and efficiency in mind.
Through a set of investment strategies secured and enforced by smart contracts, BIM automatically maximizes the user rewards from various liquidity pools (LPs), automated market making (AMM) projects, and other yield farming opportunities in the DeFi ecosystem.
The main product offered by BIM are our Vaults. The investment Strategies tied to the Vaults will automatically increase your deposited token by compounding arbitrary farm reward tokens from decentralized exchanges back into your initially deposited asset. Despite the inference of the name Vault, your funds are never locked in any contract on BIM: you can always withdraw at any moment in time.
DeFi applications are unique in the sense that they are permissionless and trustless, meaning that anyone with a supported wallet can interact with them without the need for a trusted middleman. While you have funds staked in a vault, you remain 100% in control of your crypto.
What is a Vault?
Vaults are investment instruments that employ a specific set of strategies for yield farming. They make use of automation to invest and manage deposited funds, which help to achieve high levels of compounding interest. By using a BIM vault to compound your gains, you save countless small transactions and their associated gas costs, and precious personal time. Instead of manually managing your position our vaults do that all automatically and at a higher frequency.
Vaults are the core of the BIM ecosystem. In a BIM vault, you earn more of the asset you stake in it, regardless if this is an liquidity pool (LP) token or a single asset. For example, vaults where one can stake BTC-BNB LP will result in more BTC-BNB LP over time, effectively growing your share in the liquidity pool and thus allowing for more and more fees and rewards over time.
Despite the name 'Vault' suggests, user funds are never locked in any vault on BIM. One could always withdraw from a vault at any moment in time. BIM also does not own user funds staked in vaults. However, it is generally best to view vaults as investment tools to store funds for the medium to long term in order to have the effects of compounding really kick in.
When browsing the vaults on the platform, you will see the annual percentage yield (APY), which takes the frequent compounding into consideration compared to annual percentage rate (APR) which does not. You will also see daily interest percentages and the total amount invested in a vault by all users (TVL). Furthermore, one can see what underlying platform the vault is using as a source of revenue.
Each vault can either refer to a pair of tokens invested in liquidity pools, such as CAKE-BNB LP tokens within the Binance Smart Chain ecosystem, or a single token invested in lending platforms or single stake reward pools.
How often do the vaults harvest their profits and reinvest?
Vaults are normally harvested multiple times daily and profits are automatically reinvested (compounded).
Why can't someone just do this themselves?
They could, but vaults help you save on personal time and transaction fees, maintain healthy collateral to debt ratios, self-optimize for the best possible yields, and automatically reinvest earnings. Attempting to do this manually would result in large inefficiencies.
What is the vault fee structure?
Most vaults have a performance fee structure, taking a percentage cut of all harvest rewards. This fee on profits is split up and distributed back to BIM tokenholders, allocated to BIM's treasury. These fees are already built into the APY of each vault and daily rate. You do not need to calculate it yourself. The performance fee and the fee structure breakdown are presented inside the Deposit and Withdraw module in a vault.
The performance fee on additional yield, i.e. vault profits, is in part distributed back to BIM tokenholders and is a source of BIM's platform revenue. A part of it also funds BIM's treasury which is used to further fund platform development, security and other initiatives. The performance fee was also implemented to promote community engagement and governance participation. A successful and engaged community is critical for our future growth, which in turn rewards platform users even more.
Furthermore, some vaults have a withdrawal fee. The main purpose of this fee is to prevent possible exploits from bad-faith actors. Without the fee, somebody could deposit just before the harvest() function execution and withdraw straight after that event, taking a % of the gains generated by legitimate stakers. Withdrawal fees stay in the vault and are shared amongst vault funds.
What is harvesting on deposit?
Many of BIM's vaults "Harvest on Deposit". This means that when you deposit into the vault, you are also calling the harvest function of the vault's strategy. By calling the harvest function, you trigger the collection of pending farm rewards and compounding of those rewards back into the vault tokens for everyone.
BIM does this so that it is impossible for malicious actors to steal yield, so a withdrawal fee is not required. This greatly benefits long-term investors.
Almost all of the vaults on more inexpensive chains like Polygon harvest on deposit. You can tell if a vault harvests on deposit if there is no withdrawal fee.
For depositing, and thus calling the harvest function, you will receive a reward in the form of the native chain token (e.g. WMATIC) due to the harvest call fee.
Harvesting on Ethereum
As transaction fees on Ethereum are expensive, BIM has introduced a few rules that determine the vault's harvesting frequency.
Vault TVL is above $100k: vault will be harvested every 3 days.
Vault TVL is below $100k but above $10k: vault will be harvested every 15 days.
Vault TVL is below $10k: community harvest.
Community harvest implies that the harvest function on the strategy contract has to be manually called, and the transaction fees for doing so will not be subsidized by BIM.
Another rule watches the gas prices on Ethereum. If maxGasPrice is 20 GWei or more, harvests will not be executed as they will become too expensive. This is regardless of a vault's TVL.
Harvesting on BNB Chain
BNB Chain also has a harvesting constraint in place:
Vault TVL is below $10k and older than 2 weeks: community harvest.
Does the performance fee get taken out when I withdraw my funds?
No, the performance fees are on profits and are taken every time someone calls the harvest() function.
Does the vault page show the APY?
Yes. Our displayed APY values reflect the predicted rate earned on a vault in a year. This rate is determined by the underlying platform it uses, the strategy that it is interacting with at the time, the total amount of funds in the vault and also takes into account the effect of compounding. As a unique feature, we have also included all vault fees in the APY calculation. What you see is what you get!
What risks do the vaults have?
BIM vaults are audited, but this does not mean that a vault is entirely risk free. Below are some of the general vault risks:
Assets deposited into the vault have no risk of decreasing in quantity but can decrease in monetary value.
As with any smart contract, the ultimate risk is that an investor's funds can end up stolen or unable to be withdrawn. The team does take steps to quantify the security risks of smart contracts and will only interact with ones that meet a specific set of requirements after excessive testing to make sure the underlying platform does not contain so called 'rug-pull' functions.
Who is in control of the vault?
Each vault and strategy is hardcoded, and the code has been built to be immutable, so once they are released, they become unalterable. No one can modify the vaults and strategies.
Modern BIM vaults do however rely on the standard set out in EIP-1167, known as "minimal proxy" contracts. Minimal proxies reduce deployment costs for repetitive contracts (e.g. vaults) by maintaining the vast majority of core functionality in a single implementation contract. They then configure the individual characteristics of the specific strategy (e.g. the relevant tokens and pools) through the minimal proxy contract - which is a much smaller contract to deploy - which directs instructions through to the implementation contract.
Users should be aware of the distinction between minimal proxy contracts and the proxy pattern used to upgrade contracts. BIM's minimal proxy contracts are not upgradeable, so BIM cannot take your funds by a sly upgrade. The proxy is only used to reduce deployment costs.
What will I get out when I make a vault withdrawal?
The default is that you withdraw the token type that you deposited, because atBIM you earn what you stake. You will get the amount you deposited plus the yield generated (minus a potential vault withdrawal fee).
How do LP vaults work?
Liquidity pool (LP) vaults work by reinvesting the fees awarded to LP participants. In return for providing liquidity to the pool, many platforms reward investors with tokens. Our vaults regularly harvest these rewards, sell it, buy more of the LP’s underlying assets, and then reinvest to complete the cycle.
This compounds the rewards gained from a liquidity pool. BIM creates strategies that automate this process, saving you time and gas fees in comparison to farming manually.
How often are balances updated in the vaults?
Pending rewards are not reflected in the balance until they are swapped for the initial deposited token. This can vary depending on the strategy running.
What’s your vault naming process?
Each vault on the platform is named after the token that users can deposit in it. For example, the CAKE-BNB LP vault uses CAKE-BNB LP tokens for its investment strategy. A BTC vault uses the BTC token, etc.
Underneath the vault name, you can find the platform used for investing the token and farming its yields. For example, Uses: Venus means that that particular vault invests the token in Venus, a DeFi algorithmic money market and synthetic stablecoin protocol.
How do lending vaults work?
The following applies to: Aave, Banker Joe, Blizz, Geist, Scream, Venus, and similar lending platforms.
Most BIM single asset vaults utilize decentralized marketplaces for lenders and borrowers. By depositing your initial asset in the vault, BIM deposits it into the lending marketplace and borrows against your token at safe levels of collateral.
The borrowed tokens are redeposited into the platform, and once again used as collateral to borrow more tokens. This cycle is repeated multiple times to generate as much interest as possible from the lending interest and the reward token, which is used to buy more of your originally deposited assets. This strategy is also known as a folding strategy. It is noteworthy that this "leveraged" multi lending and multi borrowing is only with the deposited vault token, so there is no liquidation risk due to token price swings.
Transaction fees: because of the multi supply and borrow cycle, the transaction fee for a deposit into or withdrawal from these vaults is generally higher as compared to other vaults.
Marketability risk: when the underlying token on the lending platform becomes overborrowed, it can prevent the vault's strategy from deleveraging (unfolding) to accommodate a withdrawal. This usually happens when the market is most volatile, or when there is an ongoing event for which people want to borrow funds from the lending platform. The overborrowed condition will naturally resolve once liquidity returns to the lending platform, a process which can take hours or, sometimes, a few days. Meanwhile, funds always remain safe.
Due to accruing debt/supply interest, one may notice that the deposited token amount may decline ever so slightly in between harvests. After the harvest event, you will see your deposited token amount increase as the yields are compounded back into it. The change in deposited token amount over time of a typical lending style vault looks as follows:
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