How does APYSwap fit into the DeFi Lego ecosystem?
Current issues within DeFi
DeFi ecosystem faces a variety of different problems. One of the most significant issues within the DeFi field, is the fact the existing instruments are far too complex for an average user. Users are required to study an extensive amount of information about pools and liquidity deposits, as well as to understand the concept of impermanent loss to avoid the actual losses.
As the things within the DeFi change at a rapid pace, portfolios are in need of constant supervision to maximize profits, which may prove difficult to keep track of. For example, Sushiswap and Uniswap reward pools change regularly and to make profit, one has to pay close attention to these changes.
In addition, users may find it difficult to distinguish between different DeFi projects and evaluate their potential risks and rewards. Provision of infrastructure for DeFi applications by multiple blockchains makes it difficult to navigate across different blockchains. Finally, the price of Ethereum has recently surged, making the GAS fees incredibly costly, which, unfortunately, prevents the regular users from interacting with yield farming opportunities and other dApps.
Liquditiy protocols, money market protocols and their limitations
Liquidity protocols and money market protocols offer a wide range of services. One could not talk about the liquidity protocols without mentioning Uniswap. Uniswap is an Ethereum-based decentralized exchange, which allows its users to swap ERC20 tokens. It provides a solution to the problems centralized exchanges face by eliminating the need for intermediaries, while also allowing you to retain the self-custody of your wallets.
However, the protocol itself is not without its issues. GAS fees and block congestion negatively affect the user experience. The fees reduction plans are in place in the 3rd version of the protocol but it will take some time until these changes are implemented. In addition, the existence of impermanent loss makes it costly and potentially risky to deposit the funds into automatic market makers, which may turn an ordinary user away from DeFi services.
Money market protocols such as Compound offer their users an option to borrow and issue loans by locking their assets in the protocol. Compound’s native token, cToken, allows users to earn interest on asset provision, while also enabling them to transfer those assets within other applications. The issue though, is that Compound runs the risk of illiquidity. If a certain withdrawal transaction is large enough, others will be unable to withdraw the funds, thus preventing users from interacting with the protocol.
While the protocols themselves offer significant advantages compared to the existing banking system and centralized exchanges, there is a room for improvement from the perspective of a non-professional trader. This is exactly where the APYSwap comes into play.
APYSwap’s solution to the existing DeFi problems
APYSwap takes the best that the current liquidity and money market protocols have to offer, while providing a better user experience at the same time. It builds upon the foundation of projects such as Uniswap and Compound by using them as a base layer and reaches out to the audience who is not as experienced in financial products.
Typical crypto investor may find it time consuming to study every single service available within the market, as well as the intricacies of every available protocol. APYSwap allows users on multiple blockchain to create and control vaults on their native blockchain as well as to transfer the ownership of these vaults to a third party. By supporting multiple DeFi protocols APYSwap offers a simple, yet effective user experience for selecting asset management options. Therefore, APYSwap recreates the experience of traditional FinTech, without sacrificing the decentralization in assets’ ownership.
APY Swap implements a delegation function for user assets and creates a marketplace for trading these financial assets. Portfolio managers are able to use these tools to design financial products on the protocols they are familiar with, since APYSwap provides support to the variety of popular DeFi protocols. With APYSwap’s versatility, there is no need to for portfolio managers to worry about technical development or end-user experience.
Therefore, APYSwap distinguishes itself from the existing DeFi protocols by being a much more user-friendly, while also retaining their advantages. It attracts a larger audience by making the financial products more accessible and more intuitive to an average consumer, thus solidifying its position as a leading protocol in the current market.