Introducing Enzyme

You spoke, we listened! Enzyme (formerly known as Melon) is directly inspired by our users and the DeFi community at large. We couldn’t be more excited to unveil it with you.

Enzyme Highlights:

• Entirely new smart contract architecture: allowing for much higher flexibility with integrations and substantial gas savings.
• Upgradability: users can seamlessly upgrade to future Enzyme versions and access the latest protocol updates & features.
• 100+ Asset Universe: Enzyme supports nearly 150 assets to choose from when managing your portfolios!
• Lending enabled for Portfolio Managers: Users can enhance performance by earning yields on positions via lending protocols (eg. Compound & MakerDAO’s Chai).
• AMM pools enabled for portfolios: Users can earn trading fees by providing liquidity to AMM pools (e.g. Uniswap), thus enhancing their performance.
• Synthetic assets are live: Users can include synthetic assets in their funds including commodities and stock indices such as sFTSE, sNIKKEI and sOIL to name just a few!
• Enhanced trading liquidity is live: aside from our DEX integrations, we’ve also included Paraswap as an aggregator in giving fund managers access to much deeper liquidity and higher gas optimisations for trading.
• Bearish? Go short now!: Users can take synthetic short positions through the large range of inverse tokens provided by Synthetix.
• Engage with other users today: you can now add information about your strategy and team on your own personalised Portfolio Manager page, so that you can build relationships with your community of investors.
• Start farming!: Enzyme products can now more easily access farming rewards from external DeFi platforms via plugins.
• Delegating trading to a 3rd party: Portfolio Managers are able to delegate trading to additional addresses and revoke or change that access at any time, increasing their flexibility to manage their trading operation.
• Choose a benchmark you feel comfortable with: Pick which token to benchmark your performance against. Benchmark your performance against different fiat-pegged stable coins and more.
• Customise things your way: You can opt to whitelist certain addresses that can invest in your portfolio and set minimum investment thresholds.

What’s New?

1. New smart contract architecture

It’s no exaggeration to say that the v2 contracts have been entirely re-architected. As a result, the protocol boasts three important new qualities:

• Modularity: Portfolios can access upgrades from new releases, while preserving their assets and investors. This is made possible by the modularity of the new architecture.
• Extensibility: The core infrastructure no longer hard-codes knowledge about specific plugins, making it more extensible and composable e.g., it is agnostic to particular price feed implementations, DeFi adapters, fees, policies, etc.
• Efficiency: The protocol shares logic rather than deploying independent instances of the same code making it much cheaper and more efficient to use.

2. Upgradability

Upgradability on Enzyme was designed so that users can easily access new infrastructure or improvements governing how funds work. It also allows managers to change a fund/product configurations (e.g. management fees or risk management policies) at certain time periods.

In keeping with the DeFi spirit, it goes without saying that investors in Enzyme strategies are able to opt-out (by redeeming) if they don’t agree to the changes. Therefore, at every upgrade cycle there is a time-lock imposed of 48 hours before the changes come into effect. This parameter can be changed at a governance level. We’ve published something much more extensive on how upgradability works here if you’re interested.

Importantly, getting access to new DeFi integrations (adapters) does not require an upgrade by the user.

3. 100+ Asset Universe

Thanks to the new architecture, we’re able to support a greater number of assets: currently nearly 150 assets and we expect this number to grow rapidly from here! The asset universe is made up of primitives (plain vanilla tokens) and derivatives (tokens that derive their price from underlying primitives, e.g. cTokens or inverse Tokens). As long as a primitive price feed is available to the protocol, it can be included in the protocol. Similarly, derivatives which derive their prices from primitives that the protocol already has prices for, can be included fairly trivially too. So in summary, you can expect many more assets to be added in the coming months!

4. DeFi Plugins & Farming

Enzyme enables direct composability with lending protocols, AMM pools, aggregators and synthetic products. This means managers can use a combination of smart strategies to enhance their performance.

As an example, let’s imagine that a portfolio on Enzyme v1 previously held 25% DAI and 25% USDC and 50% ETH.

With Enzyme , the same fund can lend these holdings out for a year and the new balance would be 25% cDAI, 25% cUSDC and 50% cETH. At today’s rates that would yield the fund an additional aggregate 4.4% per annum at today’s lending rates — more than what most traditional funds make in a year! The best part is, you have no long term obligations here and can exit your loans converting them back into the underlying assets at any time.

This fund could additionally claim COMP farming rewards on all three of these pairs because all three of these assets are eligible for the rewards.

Alternatively, we can now deposit the cDAI and cUSDC into a Uniswap AMM pool and become a provider of liquidity to this pair. There is almost zero impermanent loss risk since they are both stable coins with a theoretically identical dollar value. Yet, we are now earning 30 bps on all trading that occurs on this Uniswap pair!

We’ve just demonstrated how to boost this simple portfolio’s returns substantially by tapping into the range of integrations available on Enzyme.

The opportunities to play around with different strategies on Enzyme are endless and will grow dramatically as we build more DeFi plugins!

5. Built in Protections

Our major focus with v2 is the security of our users. In particular, Enzyme attempts to minimise the trust required by Portfolio Manager and investor with the use of smart-contracts. This is a challenging task and we have included additional layers of built-in protections to deter bad behaviour where possible. These policies can protect against attacks using flash loans, a lack of 24/7 redeemability and arbitrageurs just to name a few.

Wherever possible, we have tried to automate and recommend the use of such policies on the front-end. You can find out more about policies in advanced options or in our user documentation.

6. Customisability

Enzyme v2 will give you the flexibility to customise your investment vehicle with just a few clicks. Decide what fees you want to charge, whether you want to keep your vehicle open or invite-only (whitelisting) and which currency you want your performance to be benchmarked against. Do you want to take care of trading yourself or delegate it? What is the minimum investment ticket you will accept? Max? The list is growing fast and v2 will show you just how flexible and easy it is to create a new product.

7. Engage With Other Users

With v2, the Enzyme interface will provide a level of (optional) interaction between Portfolio Managers of strategies and Investors in strategies. Managers of strategies are able to go to their Settings page and drop in information about their investment strategy, who they are and how you can get in touch with them.

Getting Started

So with all that said and done, there’s really nothing much to say except — what are you waiting for? Login and get started! If you’re looking to launch a managed portfolio which you want to monetise — we’d recommend you use Portfolio Manager view. If you’re looking to browse and invest in the range of investment products, go to the “For investors” view! Our user documentation should help you through things step by step.

We can’t wait to hear what you think about v2! Feel free to join the Enzyme telegram channel, follow Enzyme on twitter or drop us feature requests here.

→The Avantgarde Team

FAQs

Q: What is the best way to move my fund from v1 to v2?
It is up to you how you do this but if you have a lot of investors, the least disruptive way (to your investors) to move from Melon (v1) to Enzyme (v2) is as follows:

• Liquidate all your assets via the v1 interface to the currency you want your next fund to be benchmarked against. A list of assets that can be used as a benchmark can be found here.
• Set up your new fund on v2.
• Ask investors to redeem from your v1 fund and give them instructions on how to invest in your v2 fund.

Q: What happens to the V1 smart contracts? Can I still use them?
The Enzyme Council will continue to maintain the v1 contracts and user interface until April 11th 2021. Crucially, this means sponsoring price updates for the protocol. After April 11th, redemptions from a fund and limited trading will still be possible but NAV updates and new investments will be disabled. If you have any risk management policies in your fund, trading may not be possible at all. Importantly, claiming performance fees will also no longer work.

Q: Can I carry my track record from v1 over to v2?
Your v1 track record will not automatically be linked with your v2 fund. However, if you launch your v2 fund using the same Ethereum address you used for v1, you can provide a link to investors with your previous track record on your fund page. You can find your link on the monitoring tool (v1) and insert it into the text section under settings. This serves as a proof to your previous performance on v1.

Q: What fees will I be charged to use Enzyme v2?
No fees will be charged in the first few weeks of v2! We want to lower the barrier to adoption as much as possible in the early days. After this initial period, fees will be introduced in accordance with MIP7, which is being finalised.

Q: How can I keep track of the fast growing asset universe?
We’re keeping track of this for you! We’ll be maintaining an up-to-date list of assets in the e fast-growing universe viewable here. If you have specific requests for an asset addition, pls add it to the feature requests here or contact us directly.