🧠Protocol

On SIMPLI FINANCE 1.0 we focus on Portfolio Optimization, to optimize and manage your assets for the highest returns (from all farms and platforms options) at your level of risk tolerance.

We assume users want to maximize equity value and minimize capital volatility. Equities on DeFi are appreciative because they could be farmed and earn yields. We calculate the total portfolio value based on on-chain data such as price, yields, impermanent loss, and optimize this metric.

The Markowitz Portfolio Optimization model is adapted to fit the yield farming context. The model aims to maximize portfolio returns (i.e. equity price + yield - impermanent loss), while minimizing the portfolio dollar value volatility. Since the APR/APY reported by each farm is not reflective of the real returns due to price changes, we have built a database to keep track of the actual yield from each farm, adjusted by historical price trends. The actual yield is then used for the DeFi portfolio optimization.