We are thrilled to announce the upcoming launch of Topo Finance, an open financial services platform designed to optimize your use of existing Ethereum-based Decentralized Finance (DeFi) protocols.
In the coming months, we will debut a series of products created to help you better leverage the unique and powerful capabilities of Ethereum’s growing DeFi ecosystem in order to maximize your earnings. Our first offering, launching next month, will be a non-custodial lending platform that optimizes users’ interest rates across market-based lending protocols, initially integrated with Compound, dYdX, and Fulcrum.
We enter this space as many of you do, with mission-driven aspirations and a shorter term pragmatism. In the long run, we seek greater financial access; in the short, a refuge from the traditional system. While cryptocurrencies in general promise such access and refuge, DeFi has unique potential due to its composability, which allows for both streamlined and entirely new use cases.
One such use case, employed by Topo, is a new type of aggregator that operates a.) unlike the web2 aggregators and b.) in the historically siloed financial space. Traditional digital aggregators (e.g. Google, Uber, Netflix) upended historical supply and distribution models by modularizing supply (individual pages of content or TV shows) and creating a simple, efficient access point for consumers. The result was an enormous value capture for aggregators, significant value add for users, and major disruption for supplier business models.
DeFi aggregators operate in a totally different way, because DeFi suppliers are modular by nature. This allows aggregators like Topo to act as a natural support mechanism, rather than as a disruptive force, to suppliers’ operations by increasing distribution of their services, while the end user receives the same benefit of a more efficient and unified experience. In other words, the relationship of supplier, aggregator, and end user is able to become mutually beneficial the whole way through.
Not only is DeFi creating a new aggregator paradigm, it is also bringing the end-user benefits of aggregation to an entirely new sector. Traditional finance is reliant upon silos, high switching costs, and minimal user agency. Banks supply capital and financial services, products which have resisted modularization because of regulations that limit distribution. Ethereum’s DeFi has finally brought to the financial world the digital modularization that content, transportation, and lodging have experienced over the past decade. The result is once again increased simplicity and efficiency for the end user. Sure, people still use taxis, hotels, and cable television, but for many users and use cases, there are now more favorable options.
The option that Topo aims to provide is for users to earn more money and to pay less in fees and interest. We will also improve general market efficiency by routing needed supply and demand to existing money market protocols. These existing platforms have already been highly beneficial to traders, miners, hodlers, and general crypto enthusiasts; they support the crypto community’s most established audiences and create value for a much wider group of users. As such, there is powerful on-boarding potential in DeFi’s lending markets commensurate with the value this ecosystem can provide. In integrating these platforms to build Topo, we aim to maximize that value proposition.
While the above theory is nice, we really formulated this idea through market participation and built the solution through technical expertise. We have been following and engaging with market-based lending platforms since their inception, and we have been impressed with the impact they have made, but there are obvious inefficiencies in the marketplace. Our experience as investors, traders, developers, and entrepreneurs positions us well to solve these inefficiencies, and the result meets all our expectations. Our solution will be fully scalable, efficient, and provable from V1 — and we expect future developments to be equally exciting.
Topo will offer a non-custodial smart contract pool that automates capital and debt allocation to the most advantageous platform(s), maximizing returns and minimizing fees.
By analyzing supply rate functions across integrated platforms and total funds in the pool, we are able to constantly rebalance capital across any number of protocols to earn the highest interest rate possible with very high precision.
Utilizing atomic transactions and analyzing borrow rate functions, we are able to leverage users’ principal collateral to open and close debt positions across protocols to achieve the lowest interest rate possible with very high precision.
We are a non-custodial solution, meaning we never have access to your funds and you are always in control, able to withdraw at any time.
Funds are pooled in our (soon-to-be) audited smart contract so one transaction can rebalance for all users, keeping gas costs minimal.
Platforms to be integrated in V1 include Compound, dYdX, and Fulcrum, all of which have been audited by top security firms and tested by time and usage. As additional market-based platforms emerge, we will add additional partners.
We are committed to transparency and verifiability, so you can see every mathematical nut and bolt, while the nature of these money markets and our functionality offers no incentive for front-running.
Our solution is able to adjust for any capital amount, whether that be $1 of value or $10 billion. In the theoretical case where our smart contract routes the majority of all capital in DeFi, users still maintain the best rate mathematically possible.
We plan to launch the platform supporting ETH, DAI, USDC, and WBTC, and will add additional support in the future.
Value Add Fees
Our fee structure is purely based on added value, as fees are taken on each rebalance by calculating the exact amount of interest you earn vs. the SOLR rate and collecting 20% of the value added.
Exciting Product Roadmap
Optimized interest rates are only the beginning :)
We feel privileged and humbled to be able to launch this contribution to the DeFi space, which has ignited our passion and imagination.
It’s impossible to predict where DeFi will be in five years, but here and now, we are dedicated to improving the space as it exists, and both growing and learning alongside the Ethereum community.
If you would like to sign up to be a beta user, please leave your email below, reach out to us on Telegram, or on Twitter.