Defi yield and assets are heavily market correlated, meaning that if ETH goes down the market and yields also go down.
Uncorrelated return streams ignore market conditions and when configured properly can generate less risky yields with much lower volatility.
The key to diversification is using more assets. The less correlated those assets, the better. Ray Dalio, of Bridgewater Hedge Fund, referred to diversification as the “Holy Grail of Investing” in his book, Principles.
Uncorrelated returns enable the creation of portfolios that perform well in all market conditions including bear markets, this is because users can become properly diversified. This reduces overall risk to all users.
Currently in DeFi you are in crypto or stables, when rysk arrives you will be in crypto, stables or rysk.
Sustainable yield is a critical component to have a mature DeFi space, where high yield is generated by solid and sustainable financial instruments. Most of the current DeFi high yield is generated relying on incentives generated by the protocol native tokens (i.e. yield farming), creating a short term high yield that is not sustainable in the long run.
Rysk creates a new mechanism, based on a sustainable model where high yield is generated by financial engineering with a clear transparency on risk adjusted returns. Rysk's high yield does not rely on short term incentives but on long term financial fundamentals.
Risk-adjusted return is a calculation of the yield generated by an investment that takes into account the degree of risk incurred to achieve profits. If two or more investments have the same yield the one with the lowest risk will have a better risk adjusted return.
The risk adjusted return calculation and the expected sustainable yield analysis are core drivers to inform investors decisions and a healthy and transparent mechanism is a key component for a mature DeFi space.
Depositors will have a transparent and clear view on the risk of each tranche and they can make informed decisions based on various important strategy parameters such as Sharpe ratio, Sortino ratio, Maximum Drawdown (MDD) and a general risk rating. Instead of providing only the projected APY, Rysk includes risk-adjusted returns information in order to provide users with informed decisions while seeking sustainable yield.
There is currently no official token for the Rysk Protocol. The rysk team believes in producing a product that people love first!