Idle is a decentralized protocol dedicated to bringing automatic asset allocation and aggregation to the interest-bearing tokens economy. This protocol bundles crypto-assets (ETH, WBTC, and stablecoins) into tokenized baskets that are programmed to automatically rebalance funds according to different management strategies.
The Idle Protocol employs a strategy-token system. Every allocation strategy has its own set of tokens that represent a pool of yield-generating assets spread across different DeFi protocols. These tokens represent the investor’s proportional ownership of the whole pool and the interest accrued over time. This issuing method is similar to the traditional mutual funds' shares structure, and it allows Idle to be non-custodial.
Currently, Idle uses two different allocation strategies:
Best-Yield: this strategy combines multiple money markets to automatically provide the highest interest rates, beating the best traditional offerings across interest-bearing tokens and DeFi protocols.
Risk-Adjusted: this strategy automatically changes the asset allocation in order to find the optimal mix between risk scores and yield.
Consequently, users can hold IdleTokens related to a specific strategy and a specific stablecoin.
Idle aims to unlock the power of decentralized finance for everyone as a one-stop source of yield that allows users to algorithmically optimize their digital asset allocation across leading DeFi protocols, either they want to maximize it or keep tabs on their risk/return profile.