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Optimizing capital allocation for maximum rewardsDeFi protocol Swaap Labs launches new yield-earning protocol, Swaap Earn.
The platform aims to enhance yield-earning opportunities for DeFi users.
It prioritizes simplicity and efficiency for liquidity providers (LPs).
Announced Monday, Swaap Earn, the latest innovation from Swaap Labs, is a yield-earning protocol that aims to revolutionize and enhance the DeFi yield field. Swaap Earn will enable liquidity providers (LPs) to earn improved yields while minimizing the risks associated with providing liquidity. Crucially, the platform will simplify the complex process of earning yield across DeFi platforms and provide users with optimal capital utilization for maximum rewards.
Swaap Earn leverages Swaap Maker, the protocol’s existing market-making infrastructure, to provide users with higher returns from natively yield-bearing tokens and market-making yields. Additionally, it will offer LPs with single-asset pools and optimal asset allocation pools to enhance the efficiency of capital allocation across the platform.
The single asset pool supports instant token deposits with no position management. The single-asset vaults are 100% passive, requiring no rebalancing from the LPs while promising higher returns. Simply, the single-asset vaults adjust capital allocation to whitelisted protocols to enhance the yield in a trust-minimized manner. The protocol deals with all the complexities ‘under the hood’, ensuring the pools do not face risks of impermanent loss or arbitrage.
“The beauty of Swaap Earn lies in its simplicity and efficiency,” David Bouba, CEO and co-founder of Swaap Labs stated. “By marrying our cutting-edge market-making strategies with passive yield generation, we're setting a new standard for liquidity utilization in the DeFi space.”
Swaap Earn also targets to solve the complexity of DeFi protocols – risk management and yield-earning strategies. The platform offers a solution in strategy and risk mitigation, enabling LPs to bypass issues such as poor strategy design and liquidity risks, which provides a better user experience and more returns to the LPs.
Optimizing capital allocation for maximum rewards
LPs on Swaap Earn can also enjoy high returns on their yield-bearing assets by taking advantage of the platform’s optimal asset allocation. Once LPs provide liquidity, the platform dynamically distributes the assets across a set of predefined protocols. This ensures that users gain the best yields from vaults that match their risk appetite. Strategies and allocation rules can be added by governance to ensure vaults are up-to-date with the latest yield-generation opportunities.
Efficient liquidity utilization is still the greatest challenge across yield-bearing platforms. Additionally, the growing multi-chain structure fragments liquidity across several blockchains, resulting in sub-optimal capital allocation. Notwithstanding, revised fee structures by popular AMMs have also resulted in LPs earning less fees, which makes sustainable yield harder to find.
Swaap Earn aims to solve these issues by using advanced market-making strategies, inspired by traditional finance and adapted to the DeFi realm. Deposited liquidity on Swaap Earn is directed to DAO-approved protocols and assets. Once on the protocols, the liquidity is distributed among pre-approved vaults and pools, facilitating optimal capital allocation based on market conditions and efficient collateral management on lending platforms.
All these advancements are available on Swaap Earn’s easy-to-use UX/UI interface. So far, the platform has partnered with Lido Finance and AAVE to create the first vaults on the platform. AAVE recently gave Swaap Earn a grant to advance research and development on the platform.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
