Overnight

Yield Aggregator

Overnight is a DeFi protocol behind USD+, a yield generating stablecoin with a daily profit payout

Risk Rating
Average
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Overnight offers a fully collateralized, yield-generating stablecoin that acts as a DeFi equivalent of a money market fund with a daily profit distribution.
What we like less
The underlying collateral is exposed to third-party technical risks as it is deposited into third-party DeFi platforms.
What it means for you
Offers you a simple way to passively earn yield on your USD, while maintaining exposure to a non-volatile instrument to hedge your portfolio against market conditions.
Podcast
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Degen Responsibly
Overnight: Passive stablecoin yield through USD+
Our guest today is Max, co-founder of Overnight protocol. Overnight's flagship product is USD+, a fully collateralized stablecoin that pays its holders daily yield by deploying its collateral into different strategies on-chain.  In this conversation we explore, how Overnight works, what makes them unique, and how the idea of a yield-bearing stablecoin came about. We also dive into how Overnight thinks about risk management, their risk framework for assessing a new protocol and some of their plans for the future.  ----- Degen Responsibly is a series of live talks by Exponential DeFi and a guest protocol. In these conversations we explore some of the latest and greatest projects in DeFi, what makes them unique, their builders but also talk about the risks and what to watch out for. Our goal is to help investors make better informed decisions and help them save time as they do their own research. ----- Learn more about us at exponential.fi and follow us @exponentialdefi ----- Information provided here is presented for educational purposes only and does not consider financial advise or any offer or solicitation to buy any of the tokens or invest in any of the pools mentioned throughout the podcast.
Information
Exploit/Hacks
One
Info
  • Website
  • Token: OVN
  • Tags: Yield Aggregator
Key Metrics
  • TVL: $71.2M (Rank #81)
  • TVL Ranking by Yield Aggregator: #0
  • Blockchain: Base, Arbitrum, Optimism, Blast, Linea, zkSync Era, Polygon, Binance
  • Chain TVL
    • Base: $62.47M
    • Arbitrum: $5.84M
    • Optimism: $957.97K
    • Blast: $881.2K
    • Linea: $474.09K
    • Others: $617.37K
Risk Assessment
Average
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; Hacken audited in February 2022
  • Public team promotes accountability
  • One mitigated protocol hack since launch
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Bottom 80% by total value locked increases risk
  • Requires members of a DAO to vote on-chain for approving contract upgrades
  • Timelock is less than 48hrs, which provides users with less time to exit if any malicious upgrades are approved
  • No governance token and/or contracts are fully immutable
Protocol Design
  • No death spiral concerns
  • This protocol is susceptible to risks related to yield optimizers which deploy custom strategies to automatically manage user funds
Things to know about Overnight

How Overnight works

Overnight is a DeFi protocol that issues USD+, a yield generating stablecoin with a daily profit payout. USD+ is a fully collateralized stablecoin that is backed by yield-generating assets and pegged 1:1 to USDC. Users can mint USD+ from the official Overnight front-end app by converting USDC. Once minted, the USD+ begins to immediately accrue compounded yield. Overnight uses a liquidity index reflecting the current ratio of the number of issued USD+ tokens to the volume of assets on strategies, expressed in USDC. USD+ is able to generate yield as the protocol deploys the underlying stablecoins to third-party DeFi platforms. The yield generated from interest, trading fees, and protocol rewards is pooled and converted to stablecoins to produce USD+-denominated yield. This yield is passed on to USD+ holders through a constant rebasing of the token supply. This allows the USD+ price to stay pegged at 1 USD while the user's token balance adjusts in real-time to reflect the accrued yield.

How Overnight makes money

The protocol applies a 0.04% fee on all minting and redeeming of USD+. The fee goes to the Overnight collateral pool and is used to compensate existing USD+ holders for the accumulated but not yet paid out daily profit. There is currently no revenue accrual mechanism for Overnight itself.

How you make money on Overnight

You can deposit your USDC or buy USD+ on the open market to start earning passive yield directly to your wallet.