Dynamo

Dynamo

21-10-2022

13:25

1/21 With @BalancerGrants announcing the Dynamo grant, now comes the time for us to present Dynamo to the world. So let's dive in and explain what Dynamo does and how it benefits liquidity providers.

2/21 Dynamo is a yield aggregator for decentralized stablecoins and other assets with active lending markets such as ETH and ETH staking derivatives. Dynamo generates an optimized lending yield for each supported asset by capitalizing on interest rate fluctuations.

3/21 Dynamo operates by shifting its liquidity between lending venues as interest rate fluctuations generate new opportunities. Dynamo is built to take advantage of the various windows of opportunity that emerge from lending market activity as they appear.

4/21 Dynamo works on top of defi’s prime lending venues in order to maintain an optimized allocation. Dynamo vaults optimize their yield by shifting liquidity between Compound, Aave, Fraxlend and Euler in order to stay on top of interest rates.

5/21 Dynamo operates its portfolio in a decentralized manner. Every time a more optimal portfolio allocation emerges, Dynamo users can propose a vault reweight in exchange for 2% of the yield the proposal generates, for as long as it is active.

6/21 Dynamo enables DeFi users to engage in lending activity without having to monitor interest rate fluctuations. Users of Dynamo can engage with DeFi lending platforms without having to engage in the continuous active management of their liquidity.

7/21 Dynamo offers a state-of-the-art vault infrastructure that is built with the use of @vyperlang and adheres to the ERC-4626 standard, taking inspiration from the original ideas of @functi0nZer0 and @d1ll0nk that led to Nirn and pushing them to the next level.

8/21 The composability of DeFi enables the development of Dynamo's optimized lending vaults, but it also enables the development of advanced use cases on top of them. And this is why we are excited to build on top of the @Balancer boosted pool architecture.

9/21 By building on top of Balancer, Dynamo is able to unlock idle liquidity and activate it in order to optimize liquidity provision by making liquidity superfluid. This is enabled by Balancer's open nature and DeFi's composability.

10/21 By using Dynamo boosted pools, liquidity providers will be able to solve the dilemma between lending and liquidity provision, since Dynamo gives them the ability to engage in both activities at the same time and in an optimized manner.

11/21 With the development of Dynamo's infrastructure, Dynamo will soon be able to offer the first decentralized stablecoin boosted pool, enabling liquidity providers to expand decentralized stablecoin liquidity while generating an optimized yield for doing so.

12/21 Dynamo believes that the decentralization of the stablecoin market is important to the continuous innovation that takes place in DeFi. Because of that, Dynamo aims to accelerate the adoption of decentralized stablecoins through the development of the Dynamo base pool.

13/21 By developing a base layer of decentralized stablecoin liquidity, Dynamo will be able to enable the continuation of the permissionless innovation environment that drove DeFi to the forefront of financial and technological innovation.

14/21 But in order for decentralized stablecoins to scale successfully, the base layer that enables their usage in commerce and investment flows must remain decentralized as well. For this reason, Dynamo is also aiming to launch the Ethereum base pool.

15/21 The Ethereum base pool will enable the decentralization of the Ethereum staking market by offering a base pool of Ethereum and Ethereum staking derivatives that will enable a deep liquidity base for Ethereum LSD's.

16/21 By building on top of the Balancer V2 infrastructure, Dynamo enables the development of the decentralized stablecoin and Ethereum LSD liquidity that's needed for the further decentralization of the DeFi space while optimizing the returns it generates.

17/21 With the deployment of Dynamo's base pools, the Balancer ecosystem will be able to expand its user base even further while aiding the decentralization of the DeFi ecosystem. This can expand Balancer's footprint while benefiting the rest of the DeFi space.

18/21 Dynamo’s purpose is to enhance the financial inclusivity of the DeFi space by providing a yield optimized liquidity layer for decentralized stablecoins, Ethereum staking derivatives and other assets that are better served by decentralized liquidity.

19/21 To that end, we are actively engaging with the DeFi space in order to showcase the potential of Dynamo's base pools, with @DYADstable being the first protocol to tap into them.

20/21 We believe that the future of DeFi will not be based on centralized gatekeepers but on decentralized liquidity, and this is the future we are building for.

21/21 Dynamo's development is already happening as we speak. We are very excited to utilize Balancer for this, and we will be live soon.



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