Assets Management

Decentralised finance

Decentralised finance, commonly referred to as DeFi, encompasses a range of financial services operating on public blockchains, predominantly on platforms like Ethereum. DeFi is characterized by its global reach, peer-to-peer nature, pseudonymity, flexibility, speed, inclusivity, and transparency. It serves as an ideal environment for financial assets that, when managed appropriately, hold the potential for growth.

Protocols

Within the DeFi space, various protocols offer opportunities to generate returns. Asset management protocols, particularly yield aggregators and all-in-one platforms, prove to be highly effective in this regard.

Yield aggregators automate the profit generation and reinvestment process, while one-stop platforms facilitate collaboration between asset managers and investors. The Stability Platform aims to encompass both functionalities, integrating and enhancing them with additional features.

Sources of profit

When examining the primary sources of income in DeFi for asset management, key contributors include earnings from lending and collateralised debt protocols (CDPs), swap fees in decentralised exchanges (DeXs) for liquidity providers, rewards from liquidity farming (farms, gauges), and the appreciation of asset prices. While returns from lending and CDPs have been relatively low in recent years, providing liquidity has consistently proven to be a decently profitable avenue. Combining investments in assets with waiting for cryptocurrency prices to rise aligns well with generating income through liquidity provision.

Consequently, modern asset management protocols prioritise liquidity mining and associated tasks as the central components of their operations.