There’s Too Many Tokens to Keep Track Of
How to solve the issue of not having a single UI to view all of your holdings
Has this ever happened to you?
You’re playing with a brand new dapp that promises you 1000%+ APY (hopfully not $IRON though), and you ape into it like the degen you are.
You deposit your hard earned ETH into the smart contract and receive something weird back as a “receipt” of your deposit into the dapp. The token is called yacrenwETH or something equally unintelligible.
You excitedly go into your MetaMask wallet (or another non-custodial wallet) to see your overall portfolio and the funds you deposited doesn’t show up.
Your stomach drops.
“Wait… where is my money?” you asked.
“It’s still there right? It’s not gone?”
You frantically reopen the dapp website and check their UI.
The money is still there.
You breathe a sigh of relief, but quickly resume your anxiety attack when you realize that there’s a discrepancy on who’s telling the truth.
Either this rinky-dink website — made by a team of 4 — is lying to you, or MetaMask — an established wallet that has thousands of users and holds billions of dollars — is lying…
Surprisingly, it IS Metamask that’s “lying” to you.
Rather than lying though, the app just hasn’t integrated into this new dapp / protocol, so your funds that are denominated in yacrenwETH aren’t recognized by the wallet UI.
Thus, it looks like you’ve thrown your money down the drain— never to be recovered again 🙃 When in actuality, it still very much exists!
Sadly, we’re still reliant on humans to put in the grunt work — painstakingly integrating to each and every protocol.
Because DeFi as a technology is very new, there are salient pain points in the developer experience: integrations are complex and time intensive, and there is limited scalability with integrations.
Said another way, there is currently no productized abstraction layer for integrating into all the disparate DeFi protocols.
“Zerion has been working hard to stay up to date with innovations in the DeFi space. This means integrating as many protocols as possible, allowing users to track and manage their entire DeFi portfolio from one place. However, adding new protocols is nowhere near efficient.” — Evgeny Yurtaev, Zerion CEO
For developers, DeFi gives developers the ability to rapidly scale their product offerings. In the case of lending, a developer can offer loans in less than 1 week by connecting to a lending protocol (e.g., Aave, Compound), instead of in 3 months through building a lending balance sheet and an internal underwriting capability.
Double clicking into this existing DeFi pain point, I see it manifesting in two developer personas: Elaine the Extender and Howard the Hunter.
Elaine the Extender
Elaine is a PM at an established crypto company and seeks to extend the value of her company by shipping new products. She knows that her users want to do more than just HODL their coins and also knows that an increasing number of traders are turning to DeFi for yield.
However, Elaine’s eng team doesn’t have the Solidity expertise to integrate directly into low-level DeFi protocols. Given that, she’s concerned with a potential breach of security if her team were to ship this product.
Existing examples of Elaines:
- Coinbase Wallet allows its users to earn interest on its holdings
- OKCoin has an Earn product that allows its users to stake coins into DeFi protocols
- BRD can offer yield-bearing products directly in their wallet
- OpenSea can offer a NFT-collateralized loan, using DeFi apps like NFTfi or Rocket
Howard the Hunter
Howard is a software engineer and a passionate DeFi enthusiast. He sees a gap in the DeFi market that no one is solving, so he quits his jobs and starts a new DeFi company.
Unfortunately, Howard soon realizes that there are a lot of foundational products that he needs for his idea to work: wallets, on-ramps, and transaction signing.
Moreover, it’s hard to manually integrate into each DeFi protocol one by one. He wants to be quick to market, but he’s only one person and can’t easily connect to all the DeFi protocols that his product needs to be successful.
A holistic DeFi API can help Howard in two ways: (1) a one-to-many API that connects to multiple DeFi protocols with one integration, (2) an end-to-end API solution that allows Howard to easily spin up a powerful crypto app by himself (e.g., wallet, fiat on-ramp).
Examples of Howards:
- DeFi Saver is an automated DeFi rebalancer across protocols
- Zapper.Fi and Zerion are one-stop-shop dashboards for DeFi holdings
- Yearn is a money market fund that integrates with other DeFi liquidity pools
- Dharma is a DeFi on-ramp
At a high level, a DeFi API product offers developers simplified access to DeFi protocols: a one-to-many abstraction layer that interacts with the smart contracts, signs transactions, and sends/receives tokens to/from the contracts.
A collection of “DeFi APIs” can be built based on developer use case. For example, a DeFi Lending API with a CompareYield endpoint that developers hit, which returns the interest rates of all specified tokens across all popular lending protocols.
Example result format for a call for GET CompareYield(“USDC”):
“COMPOUND” : 0.03998,
“AAVE” : 0.04112,
“ALPHA” : 0.04026,
//And many more…
Tactical next steps:
- User Research: validate the hypothesis that DeFi integrations are complex and cumbersome and that developers would pay for a streamlined API solution
- Product Requirements & Prioritization: identify minimum set of features required to deliver an complete DeFi API prototype (e.g., prioritized list of DeFi protocols to support to maximize developer experience)
- Technical Design: design and develop APIs, servers, DeFi protocol integrations, devops required for prototype
- Proof of Concept: ship prototype to and solicit feedback from target users
Zerion has its own DeFI SDK that standardizes DeFi accounting — both from protocols connecting to apps’ users and from apps being able to view obscure token derivatives from the protocols.
This idea would be an enhancement on just read capabilities of protocols, enabling apps to actually interact and move value with a wide swath of defi protocols.
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