Recently, when I communicated with some friends who are still serious about their projects, I found that everyone lacks a sense of direction. In fact, in addition to liquidity mining, there have been some new DeFi directions that have been applied in the last month. Just as institutional operations take up a higher proportion in the mature process of traditional finance, in addition to YFI, DeFi has also emerged a variety of asset management schemes based on decentralized contracts.

So what are the opportunities and recent new projects? This short article just makes a comprehensive summary:

  • ETF Index: The DeFi Pulse Index & Set released by the Set Protocol team in October is worth paying attention to. The fund invested in DeFi through Index has reached 14.5 million USD. Although it is also affected by the fluctuation of DeFi coin price, it has proved that ETF is a real demand scenario.
  • Revenue aggregator optimization: Rari and APy. Finance iterated on YFI to include a risk-rating score mechanism, and APy. Finance raised $3.6 million last month.
  • Clearing solutions: Defi-Saver provides a mechanism for mortgators to avoid being liquidated, KeeperDAO includes five asset management strategies, and B.Protocol has recently gained a lot of attention overseas.

Among them, Index, B.Protocol and Gavin are also paying close attention. Regarding the new opportunities in October, we believe that UBI is also a good decentralization plan. UBI itself has excellent performance in acquiring new users, while DeFi can realize capital injection more efficiently. In DeFi, ETF is also a friendly asset management tool for new coin holders. UBI+ETF may have the possibility to become the starting point of UBI+DeFi. Therefore, we are considering adding the decentralized ETF mechanism into Ubi. city in the hope of bringing interesting chemical reactions.

DeFi, for the most part, has solved the problem of trading and borrowing.

Even though countless design improvements are being proposed to improve the capital efficiency of decentralized exchanges and loan agreements, it is safe to say that this is no longer a “proof of concept” phase.

Trading and borrowing are the cornerstones of the financial system, but only a small part of traditional finance is driven by individual investors. Instead, investors participate through intermediaries such as mutual funds, hedge funds or other asset managers. DeFi has now emerged as an on-chain fund manager due to investor demand for yield optimization and capital efficiency.

The starting point

Once tokens can be traded on the chain, funds will spring up to manage assets, but the vast majority of crypto fund management is offline.

Melon and Set Protocol were arguably the first DeFi asset management products. Melon, founded by Mona El Isa, is designed for professional fund managers but has yet to appear on the market.

Set Protocol was an integral part of the early DeFi movement. A “Set” is a basket of assets that are automatically rebalanced to a predefined threshold. BTCETH50 set maintains the 50/50 ratio of BTC and ETH even if the price changes.

Set initially gained some traction, but the real breakthrough came in September with the DeFi Pulse Index Set. Its market capitalisation is $14.5m; With the collapse of DeFi tokens, its performance has been suffering. Still, it’s arguably the best place for investors to get broad exposure to DeFi — FTX DeFi Perp has a $2 million holding.

Revenue optimizer

Several yield optimizers, such as Staked’s RAY and Criticized.Finance, emerged in early 2020, taking advantage of interest rate differences between DeFi loan agreements. They had some success, but It wasn’t until the COMP and liquidity mining broke out that Yearn broke out.

Then It launched a vault in which investors could deposit their assets into an automated investment strategy. It is similar to the original design of Set, but the policies are more complex and asset-specific. This is a real innovation and very similar to a professional wealth manager, except that it is transparent and on-chain.

Yearn is the prototype for DeFi asset manager, and several other projects are already offering similar asset management services.

Harvest, Rari Capital and APy. Finance all have similar strategies for aggregating assets and optimizing returns. Harvest has a few other assets and strategies, but not much different from Yearyearn. It had $350 million in deposits, but came under attack last month.

Rari and APy. finance are the next evolution of the income optimizer, which simplifies the choice of strategies and introduces a risk scoring mechanism to provide investors with more information. Rari has three pool options: an ETH pool similar to The Yearn vault, a “stable pool” with low risk and a “return pool” with perceived high risk. The three pools hold a total of $59 million in assets.

Apy. Finance, which raised $3.6 million last month and launched tokens on Thursday through Balancer LBP, assigns a score to each strategy and uses that score to provide a risk-adjusted, yield-optimized set.

Community liquidator

There is no doubt that DeFi is run by bots that clear margin positions. DeFi Saver, a product built on Maker, Compound, and Aave, keeps users from being liquidated by automatically selling some collateral and repaying the loan to raise the mortgage rate.

Clearing costs are high, 8-13% for a single transaction. Of course, it’s hard to know when a reckoning will occur. Two recently launched projects are trying to bring clearing – related opportunities to ordinary investors.

KeeperDAO raised seven figures from Polychain and Three Arrows, and named former CEO (Taiyang Zhang) and Amber Group’s Tiantian Kullander as team members. Five assets were pooled for “liquidating positions in Compound or dYdX, taking over Maker CDP, repositioning SET baskets, or arbitrage between Kyber and Uniswap”.

B.Protocol is the latest entrant, released last week. It also has a liquidity pool to liquidate unsecured positions, but its real enemy is MEV (miner’s extraction value). Liquidation is increasingly becoming a gas war. B.Protocol is based on Maker like Defi-Saver, but B.Protocol does not use a mortgage scheme, but “shares the proceeds with platform users in return for getting priority in clearing”.

B.Protocol caused a bit of a stir last week when it executed a flash loan in a deal that gave it direct access to Maker’s Oracle.

about

Chinadefi-chinadefi.com is a research-driven DeFi innovation organization. Every day, from nearly 900 pieces of content from over 500 high-quality information sources around the world, chinadefi-Chinadefi.com seeks for more in-depth thinking and systematic sorting of content, and synchronously provides decision-making aid materials to the Chinese market at the fastest speed

This article is published by OpenWrite!