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The deployed Silo code has specific “strategies” pre-programmed with a set of parameters that the individual user can change.

Gravity Finance - An Unparalleled Innovation called Silos

Gravity Finance is a suite of DeFi products on the Polygon Network, consisting of a Decentralised Exchange, Yield Farms, Auto-compounding Vaults and an IDO Launchpad for new projects launching on Polygon.

The latest product from the Gravity Finance team is “Silos”. In short, Silos are a way to automate manual tasks in the DeFi space.

The long version is that Silos are an extremely powerful new DeFi tool that can be utilised by anyone on the Polygon Network to build and deploy complex investment and trading strategies that utilise third-party projects and platforms, such as AAVE, MAI Finance, Gains Network, Quickswap and more, with the added benefit of decentralised ownership and automation at its core.

In this article we explore some of the potential use cases for this new product and delve into some of the strategies that are currently undergoing Beta testing.

What is a Silo

A Silo is an on-chain smart contract that is deployed for an individual user.

The deployed Silo code has specific “strategies” pre-programmed with a set of parameters that the individual user can change.

Strategies can vary from simple tasks, such as automating Yield-Farm Harvesting and Compounding, to more complex tasks like Lending & Borrowing with active monitoring and automatic loan rebalancing to prevent liquidations or to optimise earnings.

New strategies will continually be coded by the Gravity Team and added to the official “Strategy Catalogue” which will allow users to deploy complex strategies with “1-button”.

These pre-built strategies will allow users to quickly and easily deploy funds into complicated yield earning protocols with no coding required and no prior knowledge of the underlying protocols or projects being utilised (but that is all explained in the strategy description if users want to know more).

These pre-built strategies will save time and reduce the manual and mundane steps that are required, compared to doing these same tasks manually, as well as open up the DeFi space to more users who may not know how to utilise complex investment strategies without spending a lot of time and effort learning.

One of the most powerful aspects of Silos is that users can make multiple silos utilising different strategies, which can then be joined together to make more custom, unique and personalised overarching strategies.

The Gravity Team is actively looking to collaborate with third-parties who are interested in utilising Silos for their own projects and protocols, with potential for fee-sharing and other incentives on offer.

Potential Use Cases

As said above, Silos is a tool that can be used by anyone on Polygon, as such the use case will steadily expand as new projects start to integrate Silos and build new strategies for their own users. Below are just some of the potential use cases that the Gravity Team expect to see Silos used for (some of these are already being tested in the ongoing Beta);

  • Lending & Borrowing with active loan monitoring to keep loans healthy. Preventing Liquidations and Increasing Yield output.
  • Automating Yield Farming with advanced harvest-parameters (such as compounding or forwarding harvested rewards to be used in new strategies).
  • Limit-orders filled from a variety of DEXs, not just one specific DEX, without the need for limit-order books.
  • Dollar Cost Averaging for user-selected assets, with execution parameters being time or balance based.
  • NFT Sniper.

EXAMPLE: Lending & Borrowing Strategy, used to earn yield with a deposited collateral. These strategies make use of active monitoring to protect capital/collateral from liquidation and to increase yield earnings.

For this example, let's assume a user owns ETH that they consider long term holdings.

Using a Gravity Silo, they can safely use their long term holdings with 24/7 monitoring and capital protection. This allows the user to earn yield on assets that would otherwise be sitting in a wallet earning nothing.

The user picks a pre-built lending strategy for ETH from the Gravity Catalogue, selecting the one(s) they like based on the risk level, yield rewards, and the platforms used, once they deploy and fund the Silo everything is automated for the user.

During Beta Testing, the Gravity Team have been utilising the MAI Finance lending platform that provides QiDAO token as rewards. MAI Finance provides interest-free loans and is well known and trusted.

In the image above, the transactions and task flow is as follows:

  1. 1 - User deploys an ETH-MAI-Vault Silo.
  2. 2 - User deposits $100 worth of ETH into Silo.
  3. 3 - Silo calculates how much miMatic to borrow, targeting a “Healthy CTD of 180%” and then borrows miMatic. The deposited ETH is used as collateral.
  4. 4 - Borrowed miMatic is deposited into Curve stable-coin liquidity pool.
  5. 5 - The Curve LP token is then deposited into the MAI Finance Farm.
  6. 6 - The Silo is now earning Qi rewards from MAI Finance Farm.
  7. 7 - The Silo Harvests the Qi Rewards, based on the user-set “Harvest Parameters”.
  8. 8 - The Silo Compounds 50% of the harvested rewards back into the strategy.
  9. 9 - The Silo splits the remaining 50% of the harvested rewards between a specified wallet address (25%).
  10. 10 - and another Silo that the user owns, running another strategy (25%).
  11. 11 - Chainlink Keepers Network provides active monitoring to various parts of every Silo, including the value of the Collateral to Debt, accumulated harvest rewards, the user-set harvest parameters and more.

The current MAI strategies are programmed to target a “Healthy 180% Collateral to Debt Ratio (CTD)” when borrowing miMatic against deposited collateral. Note you can manually calculate CTD by dividing the value of Collateral deposited by 180% i.e. ($100 ETH deposited / 180) * 100 = $55.555

In this example, the user deposits ETH to act as collateral for the loan, the Silo borrows miMatic debt and then uses the borrowed debt to earn Yield.

If the value of the deposited ETH collateral were to decrease, some of the borrowed miMatic would be removed from the MAI Farm/Curve Liquidity pool and would be used to pay-down the loan debt, bringing the loan back to a Healthy CTD and thereby avoid liquidation and preserve capital.

If the value of the deposited ETH collateral were to increase, the Silo would borrow more miMatic debt and deposit the new debt into the Curve Liquidity Pool/MAI Farm in order to increase the earning potential for the user, thereby optimising the loan to earn more yield.

This constant CTD loan-value monitoring and loan rebalancing is handled by the Chainlink Keepers Network.

Speaking about different investment and trading strategies, such as the loan example above,

Gravity has said,

“If you can think of it, we can automate it using Gravity Silos strategies and the Chainlink Keepers Network”.

Decentralisation and Ownership

Decentralisation and non-custodial ownership are top priorities for the Gravity team. The Silos product has been built in collaboration with the Chainlink Labs team, specifically the Chainlink Keepers team. Chainlink Keepers is a decentralised network of automation bots and it is the Keepers Network that lends such awesome power to the Silos product.

By utilising the Chainlink Keepers Network, Silo parameters, balances and positions can be monitored constantly with no downtime. This means that loans can be rebalanced automatically to prevent liquidations, limit-order prices can be monitored and executed, NFTs can be bought if listed for user-specified prices (or less) etc.

Each deployed Silo is a stand-alone smart contract that is owned by the specific user wallet address. Silo funds are not pooled together and the only wallet that can interact with the contract parameters is the specific Silo owner wallet address. Each user-owned Silo is represented by an NFT that the user owns. These NFTs can be transferred between Silo users, allowing users to make strategies and then share them.

Private Beta and Public Release

As mentioned above, Silos are currently in Beta testing (Round 5) with a dedicated set of testers from the Gravity community. The team has plans to open the Beta to the public in the near future with limited strategies at first and with more strategies once private testing has been carried out.

To celebrate the Private Beta testing coming to an end, the Gravity team is announcing a competition to create a unique piece of artwork to be used as the official Silo NFT art for all Gravity Finance Silos.

NFT Artwork Competition

Cash prizes to be won and your chance to try Silos before public release!

As mentioned above, each Silo strategy that is deployed is represented by a numbered NFT. These NFTs are held in the user's wallet and appear alongside other NFTs on platforms such as Opensea. Therefore, the Gravity team wants the Silo NFT to stand out when seen on these platforms.

Prizes:
The Gravity Team will pick the pieces they like the most from the submissions.

After submissions are closed there will be a public community vote via the Gravity Discord server. The pieces with the top 3 votes will win a GAINS-DAI Silo, Pre-loaded with DAI, plus LINK to create a personal Silo Manager;

1st Place: $400 DAI Pre-loaded + 10 LINK
2nd Place: $200 DAI Pre-loaded + 5 LINK
3rd Place: $100 DAI Pre-loaded + 5 LINK

The Gravity Team will contact entrants with special access to the ongoing Beta before Silos are made public, however low/no-effort submissions will likely be ignored!

T&C apply, see Guidelines and T&C below.

How to Enter:
Entering is easy! Upload your artwork and share via Twitter, making sure to Follow and Tag Gravity Finance and use the hashtags provided below (or simply copy/paste the below content and add your artwork or a link to your uploaded piece);

—--------------------------------- COPY AND PASTE CONTENT —---------------------------------

My Entry for @Gravity_Finance NFT Art competition for #SILOS
Read about Silos and how Gravity are Automating and Changing DeFi in collaboration with @Chainlink

https://www.maticnews.com/posts/gravity-finance-an-unparalleled-innovation-called-silos

$GFI is #DeFi backed by #BTC @0xPolygon

#SiloArtComp

—----------------------------------------------------------------------------------------------------------------

Guidelines set forth by the Gravity Team:
Artwork submissions should aim to use the Gravity Branding Guidelines, but artists can (and should) be creative;

For reference;

The “Gravity Orange” is #FFA600 (or R: 255 / G:166 / B: 0)

The Official Text is Montserrat

Logos and images can be found in our Media Kit

Artwork should show the Gravity Logo, Gravity Website ( GravityFinance.io )

Artwork should state somewhere “Silo”, “Gravity Silo”, or “Gravity Finance Silo” etc

Submissions can be still or animated, can contain sound/music (as long as royalty-free or with permission)

Terms and Conditions:
Submissions end Monday 3rd of October 2022 at 9AM GMT+1.

Anyone can submit artwork to the competition.

Submissions must be the user's own creation or have permission from the original creator to be used.

By submitting artwork to the competition, you grant Gravity Finance the right to use the artwork, without licence or restriction, regardless of your placement in the votes or the outcome of the competition.

The Gravity team will pick the pieces they like the most for the pieces submitted and will then hold a public vote with the Discord community to pick a winner for the competition and the two runners up. The public vote will be carried out the week of the 10th of October and a winner will be declared and announced at the end of that week, on Sunday the 16th of October.

The Gravity Team reserves the right to not use any of the submitted artwork for the final version of the NFT Art, but will honour the competition outcome for prizes based on the community vote.

Final “vote fixing” may result in disqualification!

We will contact the winners and runners up directly via Social Media for prize distribution.

Project Links:
Website - https://gravityfinance.io/
Medium - https://gravityfinance.medium.com/
Telegram - https://t.me/gravityfinance
Twitter - https://twitter.com/Gravity_Finance
Documentation - https://inthenextversion.gitbook.io/gravity-finance/
Audits - https://github.com/ObeliskAuditing/obelisk-audits/blob/main/Gravity.pdf
Whitepaper - https://api.gravityfinance.io/documents/GravityFinanceWhitePaper.pdf

Written By

Petrache Ionut

Sep 8, 2022