When users deposit funds into Alluo via one of our onramp partners, they are automatically converted into dollar stablecoins. From there, along with any webapp crypto deposits, they flow into the Alluo protocol where they can generate yield.
The yield generated from the protocol comes from 3 sources:
Liquidity fees, which are earned through the provision of liquidity between different assets
Rewards, which are given out by different protocols to attract liquidity to their liquidity pools
Interest from lending, which is earned by providing loans against other crypto assets such as Ethereum, Bitcoin etc.
For more information about how yield is generated, please have a read through this article on yield farming by coinmarketcap.
Yield farming is the term used for the generation of yield for a particular asset from liquidity pools within the decentralized finance space.
💡 Liquidity pools can get quite complex. Put simply, they are pools of tokens that sit in smart contracts and can be exchanged or withdrawn at rates set by the parameters of the smart contract. Adding liquidity to a liquidity pool gives you the opportunity to earn trading fees and possibly rewards
Why can’t I just do this myself?
An individual customer can of course buy tokens, deposit them into the Curve pools, earn rewards, claim rewards deposit into Convex, claim rewards and convert back to their token/Stablecoin of choice. However, this multi-step process is at best time consuming and is certainly not straightforward for average users. Moreover, it is often not cost-effective for smaller deposits, especially if you want to spread your deposits over multiple pools.
Enter the Alluo Protocol.