Architecture
OmniYield's architecture is designed to be modular, chain-agnostic, and highly scalable, allowing for the seamless introduction of new features and vault types without disrupting the core architecture.
Our primary objective is to create a seamless, chain-agnostic yield layer that maximizes risk-adjusted returns for users across the entire DeFi landscape. To achieve this, the system employs extensive data analysis, advanced off-chain algorithms, strict safety protocols, diversification rules, and an architecture that abstracts away the complexity of cross-chain interaction.
Key Architectural Components
Vaults
The user's gateway to OmniYield.
These ERC-4626 compliant smart contracts securely manage deposits, receive reports from strategies, and process withdrawals.
They serve as the primary interface coordinating user funds with the underlying Strategies.
Execution Layer (Solver)
The intelligence layer of OmniYield.
These automated systems constantly analyze DeFi protocols across numerous chains, identify optimal yield opportunities, assess risks, and dictate asset allocation for the Vaults.
This processing is computed off-chain for greater scalability and efficiency - only the results are implemented onchain, preventing OmniYield’s strategies from being imitated.
Strategies
Linked to each Vault is at least one Strategy contract.
This component translates solver decisions into actions. It handles the technical complexities of asset movement, including token swaps, liquidity provision, lending, staking, etc.
Destinations
The specific DeFi protocols, liquidity pools, or yield farms where vault assets are ultimately deployed to generate returns.
Cross-Chain Messaging Infrastructure
The foundational technology enabling OmniYield's cross-chain capabilities, facilitating communication and asset transfers between different blockchains.
The Asset Lifecycle
Understanding the flow of assets helps clarify the system's operation:
Deposit
A user deposits a single asset type (e.g., USDC) into the corresponding OmniYield Vault on any supported chain. The deposited assets are moved to the Vault contract on the Arbitrum hub and initially sit idle there.
Cross-Chain Rebalancing
The off-chain component (autonomous Solver) monitors vault balances and market conditions. Once a certain threshold of idle assets is reached, or during periodic optimization cycles, it determines the optimal allocation for the current Strategies across integrated chains and proposes a rebalance plan. If the proposal meets the safety and performance constraints, it initiates a rebalance (e.g., moving X amount of USDC to Strategy A on Chain Y) through the Vault contract on the Arbitrum hub.
Using LayerZero and Axelar, a secure message containing rebalancing instructions is sent from the hub to the relevant Vault contract on the target chains.
The system executes the necessary steps (such as bridging, swapping, depositing, etc.) to rebalance.
The updated allocation is recorded, and confirmation/status updates are sent back to the Arbitrum hub via the messaging layer. This process can involve moving idle funds from the hub into a Strategy or shifting funds between different Strategies to chase better yields.
Auto-Compounding & Consolidated Reporting
Strategy contracts periodically claim earned rewards from the destination protocols, converted into the vault's base asset (e.g., USDC) and reinvested automatically. This process is orchestrated by permissioned Keepers.
Performance data, including rewards generated by these Strategies on all supported chains, is continuously reported back to the Arbitrum hub. Rewards are added to the vault's total value, automatically compounding returns for depositors.
This consolidated reporting enables a fair and transparent fee structure. The 9% performance fee is calculated based on the profit generated by a user's deposit across all underlying Strategies and chains, which ensures consistency.
Withdrawal
Withdrawals are not limited to the deposit chain; users may initiate a withdrawal request at any time from any supported chain (it does not have to be the same chain used for the deposit).
The request is routed to the Arbitrum hub. If the Vault has sufficient idle funds (assets not actively deployed in Strategies), the withdrawal is processed immediately.
If the Vault has insufficient idle funds, the hub signals the Strategies to withdraw the required amount. It prioritizes withdrawing from Strategies where the impact on overall yield (APR) is minimized. This process may take slightly longer depending on the underlying protocols.
Claim
Once sufficient liquidity is available at the Vault, the user can claim their withdrawal. Upon claiming, the corresponding assets are transferred to the user's wallet via the cross-chain infrastructure.
Cross-Chain Architecture
OmniYield's infrastructure is built upon a robust hub-and-spoke architecture:
Hub: We utilize Arbitrum as our central operational hub (the "main chain"). This is where the core logic, complex computations, and overall state management of the OmniYield protocol primarily resides.
Spokes: All other supported blockchains function as ‘spoke chains’ or ‘side chains. These are the networks where user deposits may originate and where many of the underlying yield Strategies are deployed. They primarily act as execution endpoints, receiving instructions from the Hub.
Communication Flow:
Aggregation
When a rebalancing decision is made or user actions (like deposits/withdrawals requiring cross-chain movement) occur, cross-chain messages are generated and securely passed from the spoke chains to the Arbitrum hub.
Computation
The Hub processes these incoming messages, performs necessary calculations (like optimizing asset allocation across all spokes, calculating overall vault performance, consolidating fees), and makes strategic decisions based on its global view of the system.
Distribution
Once decisions are made, the necessary instructions and transaction data are distributed back from Arbitrum to the relevant smart contracts on the spoke chains for execution (e.g., depositing funds into a specific Strategy on a different network).
This modular design enables:
Centralized logic, decentralized execution This model ensures data consistency as the Arbitrum hub acts as the single source of truth. Actual capital deployment occurs across the spoke chains, leveraging the unique opportunities each chain provides.
Modularity and extensibility New chains, assets, strategies, and destinations can be integrated in a plug-and-play fashion with minimal changes to the existing codebase. This ensures a low attack surface while facilitating the development of additional products. To further enhance its robustness and functionality, OmniYield Protocol integrates with various DeFi primitives and infrastructures, providing the best user experience and enabling seamless interaction with other financial tools in the ecosystem.
Cross-Chain Communication
The seamless operation of our hub-and-spoke model across numerous blockchains is made possible by leveraging leading cross-chain messaging providers: LayerZero and Axelar (and potentially others tailored for specific tokens/chains/functions in the future).
LayerZero enables lightweight and efficient messaging, ensuring minimal latency and trustless interoperability across supported networks. Axelar complements this with high-level routing and secure delivery of generalized cross-chain messages.
The Communication Backbone: These protocols act as the secure and reliable communication infrastructure connecting our Hub (Arbitrum) with all the Spoke chains. They provide the essential pathways for transmitting data and instructions across blockchain boundaries. All message relaying, validation, and settlement is performed through the secure messaging rails of these providers.
Facilitating Key Operations: LayerZero and Axelar pass critical messages required for core functions. This includes:
Notifying the Hub of new deposits made on spoke chains.
Relaying withdrawal requests from users on spoke chains to the Hub for processing.
Sending commands from the Hub to strategy contracts on spoke chains to execute deposits, withdrawals, or rebalances.
Reporting yield generated, performance metrics, and fee data from strategies on spoke chains back to the Hub.
Consolidated Fee Reporting
In typical multi-chain setups, each chain often acts as a silo with isolated logic and performance reporting. OmniYield takes a radically different approach, we believe that our ecosystem should operate as a single unified protocol, not a fragmented collection of chain-specific deployments.
While OmniYield generates fees from yield strategies operating across numerous chains. The protocol implements consolidated fee reporting, a process where fee generation data from all supported chains is aggregated, normalized, and computed on Arbitrum (the hub).
This enables:
Flexible user experience: Users don’t need to worry about inconsistent incentives. They can deposit from any chain they prefer knowing that fees, yield opportunities, and rewards remain consistent across the entire OmniYield ecosystem.
Shared tokenomics: All protocol fees, regardless of origin chain, contribute to the same global revenue model. This approach provides a clear picture of the protocol's health and ensures fee calculations are consistent across the entire protocol.
Transparent metrics: Unified reporting eliminates discrepancies and improves auditability.
This design allows OmniYield to function as a seamless, scalable, and efficient yield infrastructure for the entire DeFi world.
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