Haustoria: Automated Yield Generation and Rebasing in Action
Last updated
Last updated
In DeFi, one of the most exciting innovations for managing assets passively is rebasing.
This mechanism automatically adjusts the value of a token based on the performance of underlying protocols such as AAVE. Unlike traditional tokens, whose value remains static unless traded, rebasing tokens change in value dynamically, making them ideal for optimizing returns in yield generation.
In the context of Haustoria, rebasing plays a pivotal role. By distributing hTokens to users in exchange for deposits, Haustoria allows these tokens to grow in value over time as yield is generated from DeFi protocols, creating an effortless way for users to continuously benefit from passive income without manual intervention.
But how does Haustoria achieve this level of efficiency and automation? Let’s break down the process from user deposits to the mechanics of yield generation and see how this sophisticated system works to maximize your returns.
When users deposit assets like USDT into Haustoria, they receive an equivalent amount of hTokens (e.g. hUSDT), representing their share in the system. Initially, the total USD value of the tokens and hTokens is equivalent, although the quantity may differ.
For example, depositing 1 WBTC may get you 0.5 hWBTC, but both will represent an equal USD value (e.g. $60,000). Over time, as yield is generated through staking, the hToken/Token rate changes, reflecting growth in value rather than a fixed ratio.
Process: Users transfer USDT to a designated address generated by Haustoria. The system then allocates liquidity between two locations: a Vault (which holds 10%, for example, of the deposit for instant withdrawals) and external yield-generating protocols like AAVE (which in this case hold 90% for yield accumulation).
Example: Suppose a user deposits 100 USDT into Haustoria. They would receive 100 hUSDT at the current 1:1 rate. The system allocates 10 USDT to the Vault and 90 USDT to a staking protocol for generating yield. As returns from the protocol are collected, the value of the hUSDT increases, reflecting the user’s growing share.
As more USDT enters the system, the hTokenTotalSupply increases, influencing the overall exchange rate for future deposits and withdrawals.
Restaking is the process that ensures the balance between liquidity in the Vault (for instant withdrawals) and the funds deployed in yield-generating protocols. The system’s administrator sets a target proportion typically keeping 10% of liquidity in the Vault and 90% in yield-generating strategies.
Restaking periodically adjusts these proportions to ensure users can withdraw their funds while maximizing yield opportunities.
Example Before Restaking: A user deposits 100 USDT which is entirely in the Vault.
Example After Restaking: The system moves 90 USDT to AAVE for example, for yield generation, leaving 10 USDT in the Vault for instant withdrawal requests.
When liquidity is rebalanced, the system calculates the amount of tokens to move between Vault and AAVE using this formula:
X = (hToken/Token)*hTokenWithdraw — TokenVault + (TotalToken — ((hToken/Token)*hTokenWithdraw))*0.1
(hToken/Token) * hTokenWithdraw: Representation of the amount of tokens the user wants to withdraw calculated based on the current hToken/Token rate.
TokenVault: The current amount of liquidity in the Vault, which is set aside for instant withdrawals.
TotalToken: The sum of liquidity in both the Vault and AAVE (or other yield-generating protocols).
(TotalToken−((hToken/Token)×hTokenWithdraw))×0.1: Ensures that 10% of the total remaining liquidity stays in the Vault after the withdrawal to maintain the system’s ability to process more withdrawals.
The hToken/Token exchange rate increases as yield is generated in the staking protocols. The system recalculates this rate after each restaking period to ensure the rate is correct and users benefit from the yield generation. As liquidity in the protocol increases through the generated yield, the rate adjusts automatically, increasing the value of hTokens without any manual intervention from users.
The formula is as follows:
For example, starting with 100 USDT, after some time, a protocol like AAVE generates 5 USDT in yield. The hToken/Token rate now increases from 1:1 to 1:1.05. This means that Alice’s 100 hUSDT is now worth 105 USDT. Without any action from Alice her holdings have increased in value due to the rebasing process.
Haustoria offers instant withdrawals when there is sufficient liquidity in the Vault and queued withdrawals when a user requests more than the available liquidity. Queued withdrawals are processed during the next restaking cycle when liquidity is rebalanced between the Vault and, let’s say AAVE.
Imagine Alice wants to withdraw 5 hUSDT (equivalent to 5.25 USDT at the current 1.05 exchange rate). Since the Vault has 10 USDT, this withdrawal is processed instantly, leaving 4.75 USDT in the Vault.
Now suppose Alice wants to withdraw 50,000 hUSDT, equivalent to 62,500 USDT at the exchange rate of 1.25. If the Vault only contains 10,000 USDT, Alice’s request is queued. During the next restaking cycle, the system will withdraw the necessary funds from AAVE, rebalance the Vault and process her request.
Haustoria’s strength lies in its ability to operate seamlessly across multiple donor networks, such as Ethereum, Polygon and BSC. These networks act as liquidity sources and Haustoria efficiently manages the funds across them. Each network has its own Vault, where liquidity is stored for instant withdrawals and a portion of that liquidity is also allocated to yield-generating protocols. The hTokenTotalSupply variable reflects the total liquidity across all these donor networks, and this total supply is a crucial factor in determining the hToken/Token exchange rate.
The key challenge with using multiple networks is maintaining a unified system that can ensure that tokens issued on one network (e.g., Polygon) have the same value as those issued on another network (e.g., Ethereum or BSC). To tackle this, Haustoria aggregates the liquidity from different networks into a single pool. As liquidity grows in one donor network, it impacts the overall supply and the hToken/Token exchange rate adjusts accordingly across all networks, ensuring uniformity.
For example, if liquidity increases in BSC due to yield generated from AAVE, this growth affects the hToken/Token exchange rate for tokens issued on Ethereum and Polygon as well, ensuring that no matter where a user holds their hTokens, the value grows proportionally with the yield generated in other networks.
Imagine three users have deposited funds into Haustoria using different networks:
Polygon: Liquidity in Vault = 10,000 USDT, Liquidity in AAVE (Polygon) = 90,000 USDT.
BSC: Liquidity in Vault = 40,000 USDT, Liquidity in AAVE (BSC) = 360,000 USDT.
Ethereum: Liquidity in Vault = 100 USDT, Liquidity in AAVE (Ethereum) = 900 USDT.
The system pools all this liquidity across the networks and calculates a unified exchange rate. In this case, the total liquidity from all donor networks would be:
Total Liquidity = 10,000 + 90,000(Polygon) + 40,000 + 360,000(BSC) + 100 + 900(Ethereum) = 501,000 USDT
The hTokenTotalSupply reflects the total amount of hTokens issued across all networks and the exchange rate is updated accordingly. For instance, if the hToken/Token rate increases to 1.431, this new rate will apply to hTokens on every network — Polygon, BSC and Ethereum — ensuring that the user’s hTokens appreciate in value regardless of which network they initially used for deposit.
Haustoria is a groundbreaking tool that automates yield generation and liquidity management for users, making DeFi participation both simple and profitable. By balancing liquidity between instant withdrawals and yield-generating protocols, Haustoria ensures continuous growth of user holdings through its rebasing mechanic.
Whether it’s managing large withdrawals, dynamically adjusting token values or ensuring liquidity through restaking, Haustoria provides a seamless, hands-off experience for users.
With its cross-chain functionality across Ethereum, Polygon, BSC and more to come, Haustoria is paving the way for automated DeFi solutions that work efficiently in the background, allowing users to earn passive income without needing to manage the complexities of multiple protocols.
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