Wisdom Oparaocha on The Future of on-chain Asset Management; Enzyme Finance
Our money, assets, and data all operate and exist in the online realm as more components of our existence do. This is known as the internet of value movement, and cryptocurrencies, DeFi, NFTs, Securitised tokens, and other forms of digital assets are all part of this societal transformation.
Owning and managing these digital assets is a critical aspect of that societal transformation. With DeFi, anyone can now act as their bank, managing their assets with greater transparency and control over their investing decisions.
Decentralised asset management has given rise to new possibilities for developing complex financial solutions. But, on the other hand, Decentralised asset management facilitates the freedom of investing in both real and virtual assets.
DeFi is still a relatively new field, with estimates indicating that just 4 million users have ever utilised DeFi protocols. However, according to most estimates, there are between 200 million and 300 million potential users worldwide, putting DeFi penetration below 2% at the time.
This shows there is massive room for implementation in the DeFi sector. Enzyme Finance is one such Decentralised Assets Management platform at the forefront of the DeFi world. Founded in early 2021, Enzyme is an Ethereum-based protocol that allows users to design, maintain, and invest in custom crypto asset management vaults to decentralise traditional asset management and lower entry barriers, allowing more global customers to participate.
With over 1000 vaults built, more than 2,500 deposits made, and growth of Assets Under Management (AUM) from $0 to $188 Million and peaked to $230 Million as of April 2022, Enzyme has proven to be one of the most ambitious protocols in the DeFi space, allowing anyone to create and scale a customised investment strategy.
Features of Enzyme Finance
Here are some key features of Enzyme include:
Risk: Enzyme contract enables you to trust someone else managing your money with very defined parameters on what they can / can’t do to make sure that your funds are safe and keeping within the mandate you wanted (eg. if thy lose more than x% in trading slippage over 7 days, trading permissions can get revoked, or if they promise to run a yield farming strategy the contracts can prevent them from running a completely different strategy.
Control: You can keep custody of your assets with Enzyme. Your money goes exactly where you want it to go when you want it to go.
Transparency: Enzyme enables complete transparency into how strategies execute, as well as details on how they’re set up, run, and built.
Value: Enzyme makes it simple, secure, and inexpensive to set up and operate your vault. It also allows you to report back to depositors due to its built-in accounting features.
Scale: Enzyme connects you with a stream of potential savers, making attracting and growing a supporter base easier. As a result, you’ll be able to concentrate on what you do best which is designing investment plans.
Activities of Enzyme Finance
- Accruing Yield through Yearn Finance, Idle Finance, and Convex Finance.
- Aave and Compound lending and borrowing
- Earning additional benefits through yield farming programs on any protocol.
- Trading with platforms such as Paraswap, 0x, Uniswap, Curve, and others
- Curve Finance and Uniswap v2 & v3 protocols provide liquidity to AMMs and actively manage it.
Benefits of Enzyme Finance
1. Enzyme Finance allows users to quickly access dozens of DeFi protocols and more than 250 digital assets from a single platform. Enzyme Finance is a DeFi operating system that combines hundreds of protocols and digital assets into a single dashboard.
2. Users can profit from batching actions such as trade executions by pooling funds into common vaults. Because these transactions are done as a group rather than individually, users can save money on gas fees.
3. Enzyme Finance provides a seamless and fast integration with several other DeFi tokens and protocols, which makes it easier to earn interest through lending or the provision of liquidity. Such tokens and protocols include; Aave Lending, Compound, Uniswap, ParaSwap, KyberSwap, Yearn Vaults, and others.
4. Enzyme Finance allows Depositors to interface with Vaults in a non-custodial manner that requires minimum confidence on both sides. Certain acts can be required by Vault Managers, while others are prohibited. Furthermore, real-time accounting for performance and fees is accessible, which can be verified using on-chain data via the Enzyme subgraph.
Regarding Enzyme security, there are no admin keys or backdoors in terms of upgradeability. Vaults are version-specific, and only Vault Managers can opt-in and indicate an upgrade from one protocol version to the next. The tokens and integrations Enzyme enables through Vaults are smart contracts that are not under Enzyme’s control and may carry their risks.
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