Beyond DeFi Farming: Lorenzo’s Approach to Diversified, NAV-Based Yield
@Lorenzo Protocol #LorenzoProtocol
Most crypto yield strategies still seem like variations on a theme: isolated pools, fluctuating rewards, and token incentives that vanish when the market declines. Lorenzo takes a different approach, structuring on-chain yield like traditional finance – through diversified, NAV-based products instead of simple farming.
Lorenzo's design centers on fund-like structures that combine strategies. Instead of pursuing a single source of return, capital can be allocated to quantitative trading, managed futures, volatility strategies, and structured yield – all within on-chain funds that track a transparent net asset value (NAV). This NAV acts as the reference point: a real-time view of the portfolio's value, not just the number of tokens being distributed.
This subtly but significantly changes the user experience. Yield becomes a product instead of a promotion. Depositors can consider portfolio exposure and risk allocation, rather than just APY figures. Because performance is measured at the fund level, it's easier to compare strategies, track drawdowns, and understand how returns are generated.
By introducing NAV-based design to crypto, Lorenzo aims to bridge the gap between on-chain experimentation and traditional portfolio management. It preserves DeFi's composability and openness, but within a framework that resonates with investors focused on diversification, risk management, and sustainable yield – not just the latest farming opportunity.
