Plasma.Finance’s Flash Rebalancer
The DeFi ecosystem is one that keeps growing, with so many different aspects of services and products that are contained within. Among these, however, liquidity pools are today probably the most important aspect, so far proving to be a success in resolving the liquidity dilemma of decentralized finance.
Critical for this success is a well-oiled machinery of automated rebalancing going on behind the scenes, with smart contracts and oracles making tens of thousands of recalibrations each day to liquidity pools across DeFi networks. This ensures that assets are always rebalanced according to algorithms each time a trade is made so that the market remains perpetually active with trading opportunities that are beneficial for traders as well as liquidity providers.
Liquidity Balancing for users
This need for constant rebalancing of liquidity is also equally important for the many DeFi participants — the individual yield farmers and liquidity providers themselves — who together contribute their own assets across hundreds of different asset pairs.
Because Ethereum is still the chief protocol on which the majority of the DeFi ecosystems exist on, it needs little elaboration on just how painfully expensive and time-consuming it can be for yield farmers to manually adjust the liquidity of their various pools. So much so that in many cases, with gas fees approaching hundreds of dollars in value for a single smart contract interaction, any potential additional profit you could make from rebalancing liquidity is quickly eaten up by transactional costs.
Paying a lower fee won’t work, either, as opportunities come and go in the blink of an eye in DeFi’s ever-shifting liquidity values across pools. By the time your transaction confirms, liquidity and yield may have moved against you.
This doesn’t even take into account the administrative burden and potential for error when attempting to manually manage and process liquidity transfers from pair-to-pair using a string of calculated transactions. In reality, DeFi participants almost act like traditional index funds, manually calculating equations to rebalance their assets within liquidity pools!
Plasma.Finance Flash Rebalancer: Multi-pair Liquidity Rebalancing in 1 Transaction
Introducing Plasma.Finance’s latest feature: the Flash Rebalancer! This feature will be released with the PlasmaSwap DEX launching in March.
With PlasmaSwap’s Flash Rebalancer, you can transfer liquidity between pools in one transaction!
Recognizing the high-friction and costly process of manually rebalancing your liquidity over several swap pairs, the one-stop all-access DeFi platform Plasma.Finance’s Flash Rebalancer is a unique feature that allows you to adjust your liquidity from 1 trading pair to as many as you want — in a single transaction!
This means you can perform your liquidity rebalancing precisely, setting exactly how much liquidity you want to redistribute from one trading pair to another, or to as many other trading pairs as you want, and execute them all simultaneously with one transaction.
The most obvious benefit here will be the cost savings — no more paying for individual transactions, pay a single fee to complete your entire rebalancing exercise. This also means time savings, no need to wait for every action to confirm before moving on to the next — all your pairs are rebalanced in a single move, ensuring your calculations remain accurate during your move.
Save time and fees when adjusting your liquidity balances with PlasmaSwap’s Flash Rebalancer!
How does it work?
As an example, if you’re currently providing liquidity on aETH pool on Sushiswap, earning trading fees + A token rewards, but suddenly see a better A rewards on Uniswap with another aLTC pool, you’d normally need to perform 4 on-chain transactions:
- Remove liquidity from aETH pool on Sushiswap
- Use ETH to buy LTC
- Use aETH to buy aLTC
- Add liquidity to the aLTC pool on Uniswap
4 transactions means 4 times the time and 4 times the cost. Imagine cutting down 75% of the time and cost from a simple liquidity rebalancing act with 1 single transaction. That’s exactly what Plasma.Finance can do for you with its Flash Rebalancer!
Optimize your yields, take advantage of arbitrage
Our upcoming Plasma.Finance’s Flash Rebalancer will be DeFi’s seamless, time- and cost-saving standard for liquidity rebalancing between pools, helping reduce liquidity fragmentation in the ecosystem.
This opens up room for DeFi yield farmers to use this as a Pro Arbitrage tool — making the most out of advantageous swap prices that exist only in tiny windows of opportunity. In the fast and furious world of DeFi yield farming, fortune favors the bold, but yields favor the quick!
Want to try it out for yourself? Plasma.Finance’s much-anticipated Flash Rebalancer is coming soon. Follow us on Twitter or Telegram to be sure to know as soon as it does! And you will be able to see just how easy it is to adjust liquidity across swaps.
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