Simple, clean unified front-end with intuitive risk-parameter features that allow users one-click deployment for yield-optimizing strategies
Crypto is very good at launching narrowly focused protocols that attempt to do one very specific thing for users. This is great when these projects can build on top of one another and composability is unlocked. It’s not so great when it leads to liquidity fragmentation as projects fight for the same user’s liquidity while offering undifferentiated products.
Yield aggregators as a category are not new, but they’re not “smart” enough today. Existing options are passive vaults, limited strategies and don’t offer much user-determined choice. Some of that is because dynamically updating vaults & actively transacting on-chain can be expensive (gas fees) and computational intensive. Some of these problems though are beginning to be solved (or at worst mitigated) through EIP-4337 and the shifting landscape of paymasters, alt mempools, bundlers and account abstraction more broadly.
One of the critical assumptions to this yield-optimizing idea is assuming passive participation by users. Why? Plenty of existing options exist for native DeFi users to find yield-bearing strategies, but these users are higher-risk tolerance by nature, are more experimental & willing to jump through hoops/deal with poor UX. For something like this to become a venture-scale business, it’s more likely we need to see swaths of passive participants — I’m specifically thinking of a similar shift as the one we’ve seen in traditional markets. The proliferation of ETFs is a clear shift in investor behavior, showing a preference for “tldr products”.
Our view is additional aggregation layers will continue to surface and users are likely to choose the “most passive” layer since few want to think about the deeper levels (token unlock schedules, emissions, ve tokenomics & bribing, etc)
Monetization strategies here include:
Cross-chain functionality is the inevitable evolution of this — no reason it should be constrained to the genesis chain and obviously opens up wider access to projects and TVL
How custody would work is an open question. If we’re thinking about the next wave of users (vs just existing ones), then a semi-centralized custody solution might be the answer. Or at least the option for users to opt-in to this type of custody choice. Maybe MPC wallets or self-custody with social recovery are the answer here…
Most of the projects noted here are operating in an adjacent or related space