Top 4 problems of Decentralized Finance ecosystem.

1. Fragmentation of interesting protocols across different blockchains

Indeed, suppose you want to deposit your funds into Beefy, Pancakeswap, Aave and Compound across different chains. To accomplish this, you’ll need to open and manage your positions on four different protocols and at least two blockchains. Wasting a lot of your time switching between different decentralized applications. And spending your tokens on fees migrating funds from one blockchain/protocol to another. Rather inconvenient to say the least. Although there are solutions such as Zapper.fi and Zerion.io, they may have other problems.

2. Clumsy investment pipeline

What do we mean by this? Inflexible user and smart contract interfaces, limited or cumbersome ways for your investment management.

Actually, there are two major ways to invest crypto in DeFi: trade and yield.

Trading in DeFi is getting more convenient every year. DyDx enables trading in DeFi with good transaction-per-second ratio, limit orders, perpetual futures. Some decentralized exchanges added limit orders functionality (1inch, Pancakeswap).

Trading is good, but what about the yield way (staking, farming, lending)? You can use leverage for your staking deposits at AplacaFinance (your yields get multiplied by the leverage level). Farming is not convenient at all, price ranges in Uniswap V3 do not protect you from IL (Impermanent Loss), you can’t limit your risks. Using such strategies means you can never take your eyes off the screen with prices.

When staking, users just want to invest their tokens and get passive income with peace of mind. However that’s pretty much never the case, because every now and then the volatile crypto market stresses the hell out of people, who lose a lot of money and withdraw their staking deposits on each market dump.

Users may want to manage their DeFi deposits in a much more flexible way, similar to how it’s done at a CEX (CEX — centralized exchange), where you can adjust your positions and use advanced options, such as limit-orders, stop-losses, triggers for some actions in certain price ranges and so on.

3. Lagging user interfaces

Most existing dApps make you wait for your wallet to get connected or for the annual percentage yield (APY) or total value locked (TVL) to get displayed. Even if you’ve connected your wallet, the apps usually need to fetch this data from blockchain. Some modern dApps with highest TVLs use GraphQL to retrieve pre-indexed data to speed-up this process. However, some of the operations are still not cached through chain-indexers and many direct requests to blockchains slow the applications down significantly.

Some of the information provided in dApps is not user-friendly, implying you know the DeFi terminology — like LP, duration of one block in seconds, slippage, allowance of tokens and so on.

4. Being uninformed about the changes to your investments

Suppose your Aave loan has been liquidated, or you’ve invested your ETH into a vault and the vault APY got much lower. How will you know this? To learn about such things, you’ll need to manually check the status of your investments all the time. You’ll have to monitor the price levels, collateralization ratios and so on. And if you find some more profitable opportunity, you’ll need to do routine actions, such as withdrawing, enabling new pools and protocols to use your funds from Metamask, waiting for transaction confirmations, data loading and so on every time. In other words, you are getting a stressful day-time job, only no one pays you for it.

Why this happens?

As you know, in general centralized exchanges are much more flexible and convenient. The described 4 issues are the price for the decentralization, anonymity and elimination of the third parties from the investment process.

Can these issues be eliminated?

We think yes. At least they can be mitigated well enough. Let’s recap all 4 points:

1. Fragmentation is partially solved by well-known asset management tools. With time they may become more advanced and sophisticated, allowing fast and easy management of funds all over the DeFi.

2. Minimax.finance is working on this! We focus on the features for improving the yield way. At our platform you already can set stop loss and take profit for staking. Soon you’ll be able to specify the actions to be performed on your deposits based on the price changes.

For example, you open a position, where your CAKEs are staked in the Auto-CAKE pool. You’ll be able to set your staking deposit so that if the price of CAKE becomes more than 10 USD, the deposit will be automatically converted into stable coins, and the stable coins will get staked until CAKE price falls below 7. At the CAKE price equal to or below 7, the stable coins will get converted back into CAKEs (and wait until price becomes higher than 10 again to sell the CAKEs). Whether your deposit consists of stable coins or CAKEs, it will always be staked and generate passive income for you. This way we combine trading with staking to increase your profit.

Beside that, If CAKE price becomes less than 5, you may set this complex position to get closed automatically, limiting your risks (this option is called stop loss for staking).

Another example. You may have LP tokens and decide to stake them to get some rewards from a brand-new DEX, which incentivizes you with a hefty amount of their freshly-minted tokens. If you don’t believe that this token will go to the moon, you may want to convert the rewarded tokens to something more stable every, let’s say, 3 days. At Minimax you’ll be able to set up a parameter for this, and not worry about having to manually convert the earned tokens into a more trustworthy crypto.

Correct execution of such complex actions is ensured by implementation of Chainlink price feeds and Gelato network. Chainlink helps us avoid price manipulations and Gelato automates the execution of actions on EVM.

3. We did a huge lot of work to speed up our interfaces. Our approach is — if some blockchain data is needed only for informing clients, we can cache it using our centralized backend part. Decentralization is not harmed by that in any way. Usually we cache such data as APYs, TVLs and token prices.

4. We are working on a Telegram bot, where you’ll be able to subscribe for notifications on important actions performed on the positions created from your account (or accounts). You’ll be able to receive notifications about position liquidations, upcoming collateralization level violations, auto-depositing, deposit conversions, etc.