Episode 4 - Evaluate our more conservatice strategy

AI Agent Krystal DeFi Auto Vault performance update covering recovery phase, strategy changes, balanced pool configuration, risk control improvements, and real vault data analysis.

Introduction: Why the AI Agent Krystal DeFi Auto Vault Update Matters

The AI Agent Krystal DeFi Auto Vault has entered a completely different phase.

This is no longer about aggressive experimentation or chasing extreme APR screenshots.This phase is about stabilization, discipline, and structured recovery.

Since the last update, the vault experienced drawdown, high churn activity, and unnecessary micro-adjustments that reduced efficiency. Now, the system has shifted toward controlled blue-chip liquidity management using smarter AI parameters.

This report breaks down:

• What happened since the last update

• What the AI did and why

• What worked vs what didn’t

• What we changed in the configuration

• Why the new setup should improve long-term performance

No hype. Just data and behavior analysis.

Current Vault Snapshot (Live Data Overview)

As of this update, the vault metrics are:

• TVL: $340.88

• PnL: -$111.64 (-24.67%)

• 7-Day APR (headline): 253.8%

• Estimated Daily Yield: $0.6285

• Auto-Farm: ON

• Auto-run Transactions: ON

• Goal Mode: Balanced Pools

• Active Pair: WETH / USDC

Yes — the vault is still down nearly 25%. That matters.

But context matters more: the current strategy is no longer high-risk rotation heavy. It is structured, blue-chip focused, and execution-aware.

What the AI Is Doing Right Now

Current Position Details

• DEX: Uniswap V3

• Pair: WETH / USDC

• Fee Tier: 0.3%

• Range: 1,790 – 2,289 USDC per ETH

• Current Price: ~2,010 USDC (In Range)

• Fees Earned So Far: $1.47

• Position Status: Stable

Being in-range and earning fees is the foundation of concentrated liquidity success.

This isn’t a 2,000% meme APR position. It’s survivable liquidity.

That’s the difference.

What the AI Did Since Last Update

From the action logs, here’s what happened:

1️⃣ Compounded Fees

The AI compounded $5.10 back into the strategy.

That means fees were not left idle — they were reinvested efficiently.

2️⃣ Fully Exited Previous Position

The AI removed 100% liquidity from a prior strategy and converted the capital into USDC.

That shows rotation discipline.

3️⃣ Aborted an Expensive Transaction

The agent attempted to open a new WETH/USDC position on Aerodrome CL but aborted due to:

This is important.

Many automated systems blindly execute trades.This one refused to overpay for execution.

That is a positive behavioral evolution.

The Hidden Problem: Micro-Churn

Looking deeper into historical activity revealed something critical.

There were multiple small “Increase Liquidity” actions:

• $0.68 + $1.73

• $3.38 + $7.38

• Small repetitive adds under $10

• Mixed with larger capital adds

At small TVL levels, this creates:

• Excess swap costs

• Excess execution fees

• Range recalculation churn

• Lower net efficiency

This is known as micro-churn bleed — and it quietly drains performance.

High APR screenshots can hide this problem.

The Good vs The Bad

✅ What Improved

1. Blue-Chip FocusThe system is now primarily in WETH/USDC, not thin liquidity or narrative tokens. (This was changed due to bear market condition and I may change settings in the future this is an ongoing experiment)

2. In-Range StabilityThe current LP range is working.

3. Cost DisciplineAborted expensive transactions.

4. Reduced Position ChaosFewer concurrent pools.

⚠️ What Still Needs Improvement

1. Drawdown Base-24.67% means recovery requires consistency, not spikes.

2. APR vs Real Yield253% APR does not guarantee realized net gains.

3. Compounding Threshold SensitivityIf thresholds are too low, churn returns.

What We Changed in the AI Agent Configuration

This is the most important section.

🔹 Change #1 — Switched to “Balanced Pools” Mode

Instead of letting high-APR logic dominate pool selection, we shifted to:

This reduces exposure to:

• Thin-liquidity traps

• Sudden APR collapses

• Illiquid token rotations

🔹 Change #2 — Structured High-Risk Sleeve

Instead of allowing broad high-risk exposure, the new framework:

• Requires strong liquidity + volume

• Avoids pools with shallow TVL

• De-risks quickly when APR drops

• Filters out garbage narrative pools

The idea is simple:

Core capital must survive.Risk sleeve must justify itself.

🔹 Change #3 — Execution Cost Awareness

Now the agent treats gas cost as part of the strategy logic.

If fees are too high:

• It waits.

• It does not force deployment.

This prevents:

• Negative expectancy rotations

• Forced entries during volatility spikes

Automation without cost logic is just accelerated inefficiency.

Why This Should Improve Results

The previous phase was high volatility experimentation.

The new phase is structured discipline.

Improvements expected:

1. Lower churn frequency

2. Higher net realized yield

3. Fewer micro transactions

4. More time spent in profitable blue-chip ranges

5. Better recovery probability

Recovery in DeFi is not explosive .It’s incremental and structured.

How We Will Evaluate the Next Phase

In the next report, we will measure:

1. Action count reduction

2. Net PnL change (not APR headline)

3. Out-of-range frequency

4. Fee consistency

5. Idle USDC duration

If those metrics stabilize while drawdown shrinks, then the AI Agent Krystal DeFi Auto Vault is transitioning from experimental to operational.

Episode Narrative: The AI Stopped Chasing

The most important moment this week wasn’t a profit.

It was restraint.

The AI refused an expensive trade.

It consolidated positions.

It held WETH/USDC in-range.

It compounded real fees.

That shift from chasing to managing is the core evolution of this vault.

Automation isn’t autopilot.

It’s rule enforcement.

And rule enforcement only works if the rules are well-designed.

FAQs About AI Agent Krystal DeFi Auto Vault

1️⃣ Is the vault profitable right now?

No. It is currently down -24.67%. This update focuses on stabilizing for recovery.

2️⃣ Why does APR show 253% but PnL is negative?

APR is forward-looking yield based on current conditions. PnL includes past drawdowns and realized effects.

3️⃣ What is “micro-churn”?

Small repeated liquidity adds or adjustments that increase costs without meaningful net gain.

4️⃣ Why use WETH/USDC?

It is a high-liquidity, blue-chip pair with strong exit flexibility and survivability.

5️⃣ Does the AI learn?

No. It executes rule-based instructions. Strategy quality determines results.

6️⃣ Is this financial advice?

No. This is a transparent on-chain experiment.

Final Thoughts

The AI Agent Krystal DeFi Auto Vault is now in a disciplined restructuring phase.

The difference between failure and evolution in DeFi is not APR.

It’s process refinement.

We are no longer chasing yield.

We are engineering repeatability.

And that’s where sustainable on-chain automation begins.

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