PRD: DeFi Yield Optimizer

PRD: DeFi Yield Optimizer

Summary

One-liner: Find and compare DeFi yield opportunities across protocols with APY calculations, risk assessment, and optimization recommendations.

Domain: Cryptocurrency / DeFi / Yield Farming Users: Yield Farmers, DeFi Investors, Treasury Managers

Problem Statement

DeFi yield farming is complex due to:

• Hundreds of protocols across multiple chains offering varying APYs
• Constantly changing rates that require monitoring
• Hidden risks (impermanent loss, smart contract risk, rug pulls)
• Gas costs eating into yields on high-frequency strategies
• Difficulty comparing true yields across different reward structures

Users need a tool that aggregates yield opportunities, calculates real APY/APR, assesses risks, and recommends optimal strategies based on their risk tolerance.

User Personas

Persona 1: Yield Farmer (Maya)

• Profile: Active DeFi user with $50K-$500K seeking maximum yields
• Pain Points: Manually checking dozens of protocols, missing rate changes, unexpected impermanent loss
• Goals: Find highest yields adjusted for risk, automate monitoring, optimize gas costs

Persona 2: Conservative DeFi Investor (Chen)

• Profile: Traditional investor exploring DeFi with $10K-$100K, risk-averse
• Pain Points: Uncertain about protocol safety, confused by APY vs APR, worried about rug pulls
• Goals: Find stable yields from audited protocols, understand risks clearly

Persona 3: DAO Treasury Manager (Alex)

• Profile: Manages $1M+ treasury, accountable to governance
• Pain Points: Must balance yield with security, needs audit trail, limited to blue-chip protocols
• Goals: Generate yield on idle treasury, maintain liquidity, minimize governance risk

User Stories

US-1: Discover Yield Opportunities (Critical)

As a yield farmer I want to see top yield opportunities across DeFi protocols So that I can find the best places to deploy my capital

Acceptance Criteria:

• Shows top yields from major protocols (Aave, Compound, Curve, Convex, etc.)
• Displays APY/APR with breakdown (base + rewards)
• Filters by chain (Ethereum, Arbitrum, Polygon, etc.)
• Sorts by APY, TVL, or risk score

US-2: Assess Protocol Risk (Critical)

As a conservative investor I want to understand the risks of each yield opportunity So that I can make informed decisions matching my risk tolerance

Acceptance Criteria:

• Shows audit status and auditor names
• Displays TVL and protocol age
• Calculates impermanent loss for LP positions
• Flags high-risk indicators (new protocols, unaudited, declining TVL)

US-3: Calculate True Yield (High)

As a yield farmer I want to see gas-adjusted net APY So that I know my actual expected returns

Acceptance Criteria:

• Factors in gas costs for entry/exit
• Accounts for compounding frequency
• Shows net APY after all costs
• Compares across position sizes

US-4: Track Yield Changes (High)

As a treasury manager I want to monitor yield rate changes over time So that I can rebalance when opportunities shift

Acceptance Criteria:

• Shows historical APY trends (7d, 30d)
• Alerts when yields drop below threshold
• Tracks protocol TVL changes
• Compares current vs historical averages

US-5: Optimize Strategy (Medium)

As a yield farmer I want to get optimization recommendations So that I can maximize risk-adjusted returns

Acceptance Criteria:

• Suggests allocation across protocols
• Balances yield vs risk based on preference
• Considers gas costs in recommendations
• Provides diversification suggestions

Functional Requirements

REQ-1: Protocol Data Aggregation

• Fetch yields from major DeFi protocols via APIs
• Support multiple chains (Ethereum, Arbitrum, Polygon, Optimism, BSC)
• Normalize APY/APR calculations across protocols
• Cache data with appropriate TTL (5-15 minutes)

REQ-2: Yield Calculation

• Calculate base APY from protocol rates
• Add reward token APY (e.g., CRV, CVX incentives)
• Estimate impermanent loss for LP positions
• Factor in compounding frequency

REQ-3: Risk Assessment

• Protocol age and audit status
• TVL trends (growing, stable, declining)
• Smart contract risk indicators
• Centralization risk factors

REQ-4: Output Formats

• Table format for terminal display
• JSON for programmatic use
• Detailed breakdown per opportunity
• Summary comparison view

API Integrations

• DeFiLlama API: Protocol TVL and yield data (free, comprehensive)
• CoinGecko API: Token prices for reward valuation
• DeBank API: Protocol information (optional)

Non-Goals

• Automated trading or position management (information only)
• Real-time price alerts (use dedicated monitoring tools)
• Cross-chain bridging recommendations
• Tax implications of strategies

Success Metrics

• Skill activates on yield-related trigger phrases
• Returns accurate APY data matching protocol UIs
• Risk assessments align with community consensus
• Response time < 10 seconds for standard queries

Technical Constraints

• Python 3.8+ with requests library
• No wallet connections or private keys
• API rate limits (DeFiLlama: generous, CoinGecko: 10-30/min free)
• Data freshness: 5-15 minute cache acceptable

Risk Assessment

Examples

Example 1: Find Top Yields

python yield_optimizer.py --chain ethereum --min-tvl 10000000 --sort apy

Example 2: Risk-Adjusted Search

python yield_optimizer.py --risk-level low --min-apy 5 --audited-only

Example 3: Compare Specific Protocols

python yield_optimizer.py --protocols aave,compound,curve --asset USDC

Version History