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Yield DCA

Yield DCA enables users to diversify their rewards from DOT staking by setting up a DCA schedule which periodically swaps their DOT staking yield into any asset traded on Hydration.

Yield DCA works with vDOT - the DOT liquid staking token by Bifrost Finance. vDOT is a shadow token of staked DOT, with an underlying DOT reserve and incorporating the yield-bearing feature of DOT staking rewards (more info in the Bifrost docs). Holding vDOT acts as an equivalent to having a DOT staking position which is liquid, with staking rewards being accumulated as an appreciation in the price of vDOT.

How does it work?

Users can mint vDOT by depositing their DOT into the Bifrost SLP (and vice versa: DOT can be redeemed using vDOT). Once minted, the vDOT can be sent to Hydration using our Cross-chain UI. Alternatively, vDOT can be obtained directly from the Hydration Omnipool.

On Hydration, users can easily set up a Yield DCA order which swaps the yield from the value appreciation of their vDOT (average APY of 15%) into any asset traded on Hydration. The swaps will take place at least once every 24h (depending on the order size).

This mechanism allows users to diversify their yield from DOT staking into other assets from the Polkadot ecosystem, and the DCA strategy helps users smoothen out the volatility of the markets.