Crypto Newbie / Simulators / Yield Vault
Yield Aggregator Vault Simulator (Yearn-style)
Yearn Finance pioneered the 'vault' model in 2020 — deposit one token, the vault auto-routes to whichever strategy (Aave, Compound, Curve, Convex) currently yields the most. Users get auto-rebalancing without doing it themselves. Cost: a performance fee (20% of gross yield) plus management fee (2% of AUM annually). The simulator runs the math so you can see how much of the advertised APY actually reaches you.
Vault setup
Available strategies
| Strategy | APY % | Capacity (USD) |
|---|---|---|
| Aave USDC supply | ||
| Compound USDC | ||
| Curve 3pool LP | ||
| Convex boosted Curve ★ |
Current state
Best-APY strategy
Convex boosted Curve
Current strategy APY
8.50%
Effective net APY (after fees)
4.80%
Annual gross yield
$4.3k
Performance fee
$850.00
Management fee
$1.0k
Your share (annual)
$2.4k
Simulation results
Strategy switches
0
Cumulative net yield
$2.5k
Monthly breakdown
| Month | Strategy used | Gross yield | Perf fee | Mgmt fee | Net yield |
|---|---|---|---|---|---|
| 1 | Convex boosted Curve | $354.17 | $70.83 | $83.33 | $200.00 |
| 2 | Convex boosted Curve | $355.58 | $71.12 | $83.67 | $200.80 |
| 3 | Convex boosted Curve | $357.01 | $71.40 | $84.00 | $201.60 |
| 4 | Convex boosted Curve | $358.43 | $71.69 | $84.34 | $202.41 |
| 5 | Convex boosted Curve | $359.87 | $71.97 | $84.67 | $203.22 |
| 6 | Convex boosted Curve | $361.31 | $72.26 | $85.01 | $204.03 |
| 7 | Convex boosted Curve | $362.75 | $72.55 | $85.35 | $204.85 |
| 8 | Convex boosted Curve | $364.20 | $72.84 | $85.69 | $205.67 |
| 9 | Convex boosted Curve | $365.66 | $73.13 | $86.04 | $206.49 |
| 10 | Convex boosted Curve | $367.12 | $73.42 | $86.38 | $207.32 |
| 11 | Convex boosted Curve | $368.59 | $73.72 | $86.73 | $208.15 |
| 12 | Convex boosted Curve | $370.07 | $74.01 | $87.07 | $208.98 |
How vaults make money — the fee waterfall
Every dollar of yield generated by the vault gets split: 20% to the vault operator (performance fee), some fraction to gas + execution costs, and the rest to depositors. On top of that, the vault charges 2% of AUM annually regardless of yield (management fee). For a vault advertising 10% APY: depositors actually receive 10% × 0.80 − 2% = 6%. The vault keeps ~40% of the headline number. This is standard across Yearn V2, Beefy, Idle Finance, Reaper.
Why depositors still use them
Three reasons: (1) AUTOMATION — manually rotating between Aave (4.5%), Compound (3.8%), Curve (6.2%), Convex (8.5%) every week chasing the best APY is exhausting and gas-expensive for retail. The vault does it via flash-swaps with negligible cost. (2) STRATEGY SOPHISTICATION — vault strategies often include leveraged loops (deposit ETH, borrow USDC, deposit USDC into stable LP, recursive) that single users can't easily build. (3) GAS POOLING — withdrawals + deposits + rebalancing share gas costs across all vault depositors.
The 'TVL ceiling' problem
Strategies have capacity. Aave can absorb $500M without yield degrading; Curve concentrated LP might only absorb $30M before yields collapse to base CRV emissions. As a vault grows, it must split across more strategies (lower yields) or accept yield degradation. Many vaults that launched at 15% APY now offer 4% because TVL outgrew capacity. Always check the vault's CURRENT TVL vs strategy capacity before depositing — vaults near capacity are about to disappoint.
When to use vaults vs DIY
Vault wins: passive deposits ("set and forget"), small amounts (< $10k where manual rebalancing gas is prohibitive), unfamiliar asset (you don't want to learn protocol mechanics). DIY wins: large amounts ($50k+ where the 22-30% fee waterfall is significant), familiar protocols (you already understand Aave/Curve, can manage rebalancing yourself), specific allocation preferences (you want different risk than the vault's strategy mix). Hybrid: deposit half in the vault for diversification + auto-rotation, manage the other half yourself for the fee savings.
Frequently asked questions
+Why is the 'advertised APY' different from what I actually earn?
Three reasons: (1) Advertised APY shows the GROSS yield before fees. After 20% perf fee + 2% mgmt fee = ~30% reduction. (2) Yields are computed over the most recent week and annualised — if conditions degrade, your actual annual yield is lower. (3) Vault TVL keeps growing (people deposit), often pushing yields down over the deposit period. Always read the 'net APY' line item if shown, or compute yourself: gross × (1 − perfFee) − mgmtFee.
+Is Yearn safer than depositing directly into Aave?
More complex risk, not necessarily safer. Direct Aave deposit: only risk is Aave's smart contract + collateral assets failing. Yearn deposit: risk is Aave + Yearn's smart contract + Yearn's strategy logic + any other protocols (Convex, Curve) in the active strategy. More attack surface. Counter-argument: Yearn has insurance via Nexus Mutual + the YFI treasury can cover losses up to ~$X million. For very large deposits, the additional risk surface matters more than the convenience benefit.
+Why don't vaults charge less and capture more users?
They tried. Pickle Finance and Harvest Finance launched with 0% fees, briefly captured massive TVL, then either folded (no revenue) or got hacked (less budget for security). The 20/2 fee model evolved as the sustainable equilibrium where operators can fund ongoing security audits + strategy development + protocol governance + insurance. Lower-fee vaults exist but typically struggle with sustainability.
+Can a vault strategy go to zero?
Yes. If the underlying protocol gets hacked or the strategy has a bug, depositors can lose 100%. Yearn's V1 had several incidents (Yearn V1 lost ~$11M to a flash loan exploit Feb 2021). V2 architecture is more robust but not bulletproof. The smaller / newer / less-audited a vault, the higher the risk. Stick to vaults with > $100M TVL and > 1 year operating history for retail-grade safety.
+What's the difference between Yearn, Beefy, and Idle Finance?
Yearn: Ethereum-native, most sophisticated strategies, highest TVL. Beefy: multi-chain (BSC, Polygon, Avalanche, etc.), strategies optimized for cheaper-gas chains. Idle Finance: focus on stablecoin yield aggregation, simpler strategies. Similar fee structures, different target markets. For Ethereum mainnet: Yearn. For BSC/Polygon: Beefy. For pure USDC/USDT yield: Idle.