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  1. Product Guides

Yield Optimiser

PreviousSmart NotificationNextBuilder Mode: Product Overview

Last updated 7 days ago

Yield Optimiser Documentation

1. Why Lending Needs Fixing

Lending protocols are one of the cornerstones of DeFi. As of March 2025, they account for 42 % of total DeFi TVL (DefiLlama: total DeFi TVL $101 B). Yet most users never fully capture their potential because they:

  • Don’t know that rates can spike dramatically between protocols

  • Lack tools to chase those spikes in real time

  • Aren’t watching protocol health closely enough to avoid losses

2. Introducing Otomato’s Lending Aggregator

An optimized yield engine—built on top of Otomato OS—that does the heavy lifting for you. With a single deposit, you get:

  • Yield Optimization Your assets move automatically across AAVE, Compound and Morpho to lock in the highest rates.

  • Bad Debt Protection (coming soon) Our Off-Chain Guardians watch for protocol risks—suspicious txs, governance upgrades, oracle quirks or bad debt—and pull your funds out before trouble hits.

What is Bad Debt? When a lending pool suffers a depeg, oracle exploit, hack or market crash, its collateral can become insufficient to cover all deposits. If the protocol’s reserve can’t fill the gap, withdrawals leave later users underwater.

Otomato’s Off-Chain Guardians detect early warning signs—like oracle price divergence or unusual tx patterns—and trigger an emergency withdrawal before a bank-run scenario unfolds.

3. How It Works

  1. Deposit User sends asset (for example USDC) to the Lending Aggregator smart account.

  2. Monitor Rates Trigger Layer polls on-chain rate oracles and off-chain APIs for Aave, Compound, Morpho, etc.

  3. Decision Engine Logic Engine evaluates where APY is highest, factoring in gas costs and slippage limits.

  4. Rebalance Action Executor bundles and sends ERC-4337 UserOperations to move funds to the optimal protocol.

  5. Protect (coming soon) Off-Chain Guardians continuously scan for risk signals; on detection, they override the normal flow and issue emergency exits.

  6. Notify Smart Notification app pushes real-time alerts when rebalances or emergency exits occur.

4. Key Features

  • Multi-Protocol Yield Automate deposits/withdrawals across AAVE V3, Compound V3 and Morpho without manual intervention.

  • Custom Risk Controls Set slippage limits, gas-price caps and minimum-APY thresholds.

  • Fee & Cost Efficiency Batch transactions and leverage paymasters to reduce on-chain fees.

  • Transparency & Analytics

  • Extensible Architecture Add new protocols or custom strategies via JavaScript modules—no contract redeploys needed.