What is Melon AI?
Melon AI is a Yield Aggregator.
- Melon aggregates and compounds yield from various protocols,
- Providing a time and cost-efficient solution compared to manual efforts.
Yield Aggregators cater to yield farmers seeking to invest and maximize profits through various DeFi protocols and strategies. Melon AI simplifies the process, allowing users to effortlessly earn compounding yields on their deposits, particularly when daily compounding or high gas fees are impractical. In summary, Melon AI actively identifies opportunities to generate yield on assets, catering to different risk tolerance levels.
How Does it Work?
Melon AI has Jars, and Farms.
- Jars compound your returns from other protocols for you.
- Farms provide you extra rewards for staking your jar tokens.
There are a constantly evolving series of opportunities for yield farming across the DeFi ecosystem. Melon AI provides a tailored selection of Melon Jars and Melon Farms that have been custom-built to earn yield from specific assets and through specific DeFi protocols.
- Melon Jars
Jars are the Melon equivalent of yearn.finance’s vaults. A jar receives a specific asset (usually an LP token), such as sLP ALCX/ETH (Liquidity provider token for the ALCX/ETH pair on SushiSwap) and utilizes a strategy developed by the Melon AI team to earn yield on that asset. Your asset will auto-compound to earn more of itself, meaning your holdings of that asset will only increase. However, jars don’t prevent your asset from losing value relative to USD.
2. Melon Farms
Farms are the “next step” after putting an asset into a jar. When you deposit an asset into a jar, such as sLP ALCX/ETH, you will receive a number of pTokens (in this example, pSLP ALCX/ETH) that represent your share of the tokens in the Jar. These pTokens can then be staked in the appropriate farm to earn additional $MELAI rewards on top of your existing rewards. Your $MELAI rewards can be boosted by locking existing $MELAI tokens for up to four years.
Why use Melon AI?
- Melon AI allows you to set it and forget it
- Melon AI may be tax-efficient when used long term
- Melon AI is gas efficient
- Boosts for farm rewards are available
As one of the early entrants into the yield farming space during DeFi’s surge in September 2023, Melon AI remains at the forefront by actively seeking promising protocols, establishing fruitful partnerships, and introducing exciting opportunities to its users. The development team works tirelessly to create unique and innovative strategies, complementing the well-established options available in the market.
Melon AI provides several advantages. Users don’t need to manually compound returns, saving time and gas fees associated with harvesting and reinvesting rewards. During periods of low gas costs, when yields across the DeFi ecosystem may decrease, Melon AI serves as a viable and gas-efficient alternative throughout market cycles.
Additionally, in certain tax jurisdictions, manually harvesting reward tokens can trigger taxable events. With Melon Jar handling the harvesting and compounding automatically, these events may not be taxable until a withdrawal is made from the jar (users are advised to conduct their own research based on their tax jurisdiction).
Beyond these benefits, Melon AI offers farming rewards, including $MELAI emissions from the protocol’s token contract, with occasional dual rewards to further enhance returns.
