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Sturdy: The Only Positive-Sum Decentralized Yield Farming Fund

What Sturdy does

Sturdy is a decentralized yield farming fund with a unique positive-sum mechanic. Borrowers can leverage up to 10x on collateral like Convex LP tokens, while lenders earn yield from the borrowers' farming without taking on the associated risks and costs of yield farming.

Sturdy's Current Landscape

Sturdy's mechanic differs significantly from that of most lending protocols, which tend to create a competitive environment between borrowers and lenders; borrowers are required to pay a fee when taking out a loan, with the interest passed on to lenders as a yield incentive for them to deposit their assets.

That being said, there are few projects in the industry that align with Sturdy’s values and vision, including Gearbox and Morpho. Sturdy’s team likes to think of them as peers rather than competitors. Founders exchange wisdom and discuss the latest developments so they can each build stronger products that carry the DeFi lending industry forward.

Sturdy's Birth Story

Sturdy was founded by Stanford students Sam and Dominic. They noticed an issue in existing lending protocols: the zero-sum mechanics overshadowed the benefits of DeFi, leading many users back to TradFi.

Frustrated by all these missed opportunities, the duo set out to develop a new lending protocol that removes high-interest rates for borrowers and provides high, stable yields for lenders. In other words, a positive-sum model.

Sturdy's Solution

A closer look a the mechanic

Here’s how Sturdy’s mechanic works for the typical user:

Borrowers deposit collateral, and Sturdy converts that to an ibToken by staking into another protocol, like Lido. The ibToken is secured in Sturdy's smart contract- managed lending pool, where it gradually generates yield.

The depositing process is reversed when users make a withdrawal; Sturdy unstakes the ibToken and transfers the original collateral token back to the user.

Every 24 hours, staking yields are divided between borrowers and lenders. For lenders, their rewards will be in the same token that they initially deposited while for borrowers it’s paid in the yield token.

Sturdy's Milestones

Since launching in late 2021, Sturdy has achieved exponential growth. The protocol first launched on Goerli and Fanom testnets, reaching 100K transactions and a security audit from Certik.

By 2022, Sturdy had launched on ETH mainnet and tested out its mechanics with stablecoins and stablecoin-dominated assets; users can leverage some of the most popular DeFi yield farming protocols. After only a few months, the protocol achieved > $20 million TVL.

With users responding to Sturdy’s mechanics, the team worked hard to provide yield farmers with an even better experience and improve the product-market fit. In December, they launched Sturdy 1.0 which included a redesigned UI and a one-click leverage feature. It’s a friendlier experience for natives and newcomers. The team also expanded to the ETH market. Farmers can now lend and borrow ETH against LSDs levering up their yields to earn ~40% APY.

In calling this update Sturdy 1.0, the team has emphasized how early they are still in their mission to transform DeFi lending. They are ready to continue its growth trajectory into 2023 and beyond.

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