GlossaryAdvanced
Yield Aggregator
A protocol that automatically moves deposited funds across strategies to pursue the best available yield.
A yield aggregator is a DeFi protocol that pools user deposits and automatically allocates them across various underlying strategies (such as lending or liquidity provision), moving funds as opportunities change, to pursue the best available return.
It adds a layer of automation on top of manual yield farming, but also adds an additional layer of smart contract risk beyond whatever the underlying strategies already carry.
Examples
- A yield aggregator vault might automatically move deposited funds between two lending protocols as rates change.
- Using a yield aggregator adds its own smart contract risk on top of the underlying strategies' risk.