🚰Defragmenting liquidity with Pool Pipes.

We’ve spent the last few months refining liquidity provisioning experiences across DeFi. Uniswap V1 has been our main focus and we are happy to see improved UX attract more new users into Uniswap, and ultimately into DeFi.

The concept of adding/removing assets to/from liquidity pools with a single asset became known as Zapping in/out within the community. 

Note: since all Zap inputs are first allocated into appropriate assets required for pools, each Zap transaction not only adds liquidity but also volume to Uniswap. At least half of the input is always swapped within the same pool. This of course generates immediate fees for liquidity providers.

Today we’re excited to introduce another new feature to help reduce liquidity fragmentation throughout DeFi - Pool Pipes!

What’s a Pool Pipe?

Unipooling easily adds/removes liquidity to/from any pool.

Multipooling allocates liquidity across multiple pools at the same time.

Pool pipes seamlessly re-balance liquidity between pools.

How does it work?

Let’s assume you’re providing liquidity in the sETH pool on Uniswap earning trading fees + SNX rewards. 

You noticed that Synthetix just started distributing SNX rewards to Curve sUSD liquidity providers as well.

To move some of your liquidity from Uniswap sETH Pool into Curve’s sUSD Pool, you would need to perform at least 4 on chain transactions:

  1. Remove liquidity from sETH pool on Uniswap

  2. Use ETH portion to buy DAI 

  3. Use sETH to buy USDC

  4. Add DAI + USDC on Curve

Uniswap V1 <> Curve Pipe cuts this down to one!

Walk-through tutorial:

STEP 1: Visit Zapper.fi & connect your wallet.

STEP 2: View your liquidity pool balances & click ‘Rebalance’

STEP 3: Choose which platform and which pool within that platform you would like to move some or all of your current pool’s liquidity into.

STEP 4: Click confirm once ready to initiate the transaction.

Note: if this is your very first time interacting with pool pipes you will need to confirm an approval transaction at first so you will see 2 requests to confirm. Here’s a sample sETH->sUSD pool piping transaction: https://etherscan.io/tx/0xf3029af4efae7a82aff195f1f4a3961f0b2fb5c24af8806cb0bc31a80a54abbc

Available Pool Pipes:

While some of these may seem similar, each pipe contains optimizations to help you re-balance your assets with the least slippage.

When to ‘pipe’ aka rebalance?

Rebalance trigger parameters will differ based on your investment goals and risk profile but in general could be based one of these:

  • Shifts in liquidity provisioning incentives.

    • We saw this example with SNX shifting some incentives from sETH pool on Uniswap to sUSD pool on Curve.

  • Shifts in trading activity within liquidity pools.

    • As other pools start catching traction, liquidity providers could capture extra yield moving some assets to those pools.

    • Example: let’s say you are currently providing liquidity in the DAI/ETH pool on Uniswap V1 which currently averages ~$750K in daily exchange volume with ~$5.5M total liquidity supplied. As you might already know, fees generated from exchanges are proportionally split between all the liquidity providers of that pool. So what you are really looking for are pools with the highest volume/liquidity ratio to generate the most fees per $ supplied. Doing a quick sort by Vol/Liq on Zapper’s Explore Opportunities table, we can see how USDC/ETH pool is a great alternative as the volume is higher while total liquidity supplied is roughly the same. Also, this pool pair retains your previous pool’s asset exposures (ETH+STABLECOIN). Keep in mind, some trading activity spikes might be temporary so it’s important to analyze longer time frames to get better average estimates.

  • General market shifts.

    • As prices of underlying assets change, liquidity providers could diversify by reallocating liquidity between pegged and stable pools.

    • Example: let’s say you are currently providing liquidity in the WETH/ETH pool on Uniswap (aka ETH pegged pool) and ETH price just doubled in the last 24 hours. You might anticipate some pull-back so you want to sell some of your ETH. But instead of simply selling, you could rebalance some of your liquidity straight into the highest yield generating stable pool on Curve. Now while you are waiting to ‘buy the dip’, your stablecoins are generating fees. To buy back in simply rebalance back into the WETH/ETH pool.

  • Pool yield optimizations.

    • As any yield hacker knows, opportunities in DeFi need to be capitalized ASAP. With pool piping, it’s never been easier to move liquidity around the DeFi ecosystem. Each pool pipe is a general smart contracts so once a pipe is deployed between two underlying platforms, anyone is able to instantly move liquidity between ANY pools within those platforms. Builders could deploy their own auto-rebalancing logic which uses pool pipes to shift liquidity based on set logic.

Why Should I Care?

As you can probably tell, Zapper is in the process of building something much bigger than a way to access pools.

Thanks to composability we’re constantly exploring exciting new ways to provide unique solutions - and offering an easy interface to customize your own.

With features like Multipooling and pool piping, we aim to accelerate user adoption and experimentation of entirely new user cases in DeFi.

To get started with Pool Piping, head on over to Zapper.f

Stay up to date with all things Zapper via our official Twitter and if you are interested in building with Zaps reach out to us on Discord.

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Over the coming months, we’ll continue to offer users the flexibility to tailor their DeFi experience using a suite of no-code features built for enthusiast of all shapes and sizes.

Until then, stay Zappin’ my friends!

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*Please note that Zapper.fi is an experimental project. Zapper.fi is not providing any investment advisory or recommendation service. By using Zapper.fi or its services, you agree that you are using the Services at your own risk and that you will not and do not hold Zapper.fi or its team members liable should the services not perform as per your expectation. Zapper.fi is not a licensed financial advisor under any law. Please consult your own independent investment advisor before making any investment decisions.

🚀Introducing Zapper.fi

DeFiZap is merging with DeFiSnap!

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From day one, DeFiZap focused on abstracting away the complexities of composing and accessing the most innovative opportunities in open finance. 

Since launching Beta in December:

💸 $13M+ deployed into DeFi

🤩 by 1,500+ unique users

⚡️ via 5,000+ Zaps

❌ saving 18,000+ transactions

🕑 or 400+ hours

From being able to supply liquidity to Uniswap pools with a single asset via Unipooling Zaps to keeping your desired asset exposure via Leveraged Liquidity Pooling Zaps and registering Zaps with ENS - ease of use from composability has always been the defining element of DeFiZap.

The term “Zap” has become a household name within the DeFi community and we are excited to keep pushing the boundaries of financial composability.

Today, we’re excited to expand on that vision by merging with one of the most exciting and rapidly growing projects in our space - DeFiSnap!

The combination of DeFiSnap and DeFiZap has become Zapper - one organization, with one mission: accelerate DeFi adoption.

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💕Why Snap+Zap=<3

If you haven’t put two and two together yet, DeFiZap and DeFiSnap is like a match made in heaven.

First off, both projects are very organic and we’re both proud to have bootstrapped our way to this point.

Our core focus is on shipping - not flipping.

When it comes to the products themselves, DeFiSnap offers the most DeFi integrations of any assets management tool in the ecosystem.

DeFiSnap’s intuitive dashboard to easily track positions paired with DeFiZap’s system of smart contracts to deploy capital across multiple DeFi protocols in one transaction, create a holistic user experience to tap into and monitor the wider DeFi ecosystem.

It unlocks a unified way to keep track of different strategies while opening the door for anyone to be able to compose custom Zaps via a user-friendly interface. 

No more having to keep track of different URLs, interfaces, contract addresses or exchanges. With Zapper, DeFi has never been easier, cheaper or more accessible.

But the biggest driver of this merger is our desire to work with Seb Audet - DeFiSnap’s fearless leader!

We’ve been in constant discussion with Seb since he started the project, giving us a front-row seat to his endless hustle, insight, and innovation night after night. 

🛠️New features

Not only will Zapper offer a new and improved investing interface, it also comes packed with analytics and an ability to add liquidity to MULTIPLE pools on Uniswap in a single transaction. View tutorial.

🆓No Fee May

All Zap ins were always free and a small fee was applied ONLY for Zap outs into a single asset. These fees were collected in pool tokens and have never been touched still.

We have plans to use this pool to reduce impermanent losses for longer term LPs but to aid our users TODAY, we’re removing Zap out fees during May!

In the coming weeks we will be rolling out a whole slew of new features! Until then, stay put as we’ll be back with more progress updates before you know it 👋

GET STARTED ON ZAPPER.FI

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DeFiZap @DeFi_Zap
🥳EXCITING NEWS: @defisnap + @DeFi_Zap are merging to create
Zapper.fi - the ultimate hub for DeFi⚡️ 🆕Website: Zapper.fi 🆕Documentation: Docs.Zapper.fi 🆕Feature: Multipooling🧲docs.zapper.fi/invest/multipo… Why Snap+Zap? Thread 👇

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To learn more about the benefits of being an early adopter and shaping our product, join our Discord.

*Please note that Zapper.fi is an experimental project. Zapper.fi is not providing any investment advisory or recommendation service. By using Zapper.fi or its services, you agree that you are using the Services at your own risk and that you will not and do not hold Zapper.fi or its team members liable should the services not perform as per your expectation. Zapper.fi is not a licensed financial advisor under any law. Please consult your own independent investment advisor before making any investment decisions.

MyCrypto⚡️Zaps Tutorial

Learn how to earn interest on your ETH with MyCrypto Zaps!

Today MyCrypto unveiled their new integration with DeFiZap 🥳🙌🎊🎉

This integration starts with 3 general Zaps based on investment goals. In the coming weeks they will keep enabling more and more experiences. We love how MyCrypto is keeping education at the core of their approach and are extremely honored to work with them!

The following tutorial was originally published on MyCrypto Blog.

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Our friends at DeFiZap made it easy to enter into decentralized finance, and now you can start earning interest on your ETH without leaving MyCrypto.

Try it now!


How To Make Your ETH Work For You

Upon visiting your MyCrypto dashboard, you’ll see this new area. You’ll see a summary of the available zaps, how they work, and your balances.

Click “Get Started”

1. Choose what looks best to you and click Get Started.

Then you’ll land on the Zap info page.

This page explains how the zap works, the risks/rewards, and a FAQ section.

Click “Start Earning Now”

2. Click “Start Earning Now” to go into the deposit flow.

This is where you’ll select the account you want to deposit from and the amount you want to start earning interest on.

Click “Next” and then confirm your transaction

3. After filling out the information, click Next.

4. If everything looks good, confirm your transaction.

5. After the transaction has completed, go back to your dashboard and you’ll see your balance!

(This may take a few extra seconds to appear)

This is what you’ll see if you have all three zaps active


Even if you didn’t open your zaps on MyCrypto, we’ll detect if your account has balances in them.

We’re excited for this feature and while we’ve made Ethereum more accessible, we’re excited to take a step into #DeFi specifically.

This is a beta product, and every now and then it may act as such. If you experience a bug, please let us know.

We cordially invite you to test this, break this, and share your thoughts.

THANK YOU! ❤

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‌Resources

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QUESTIONS? JOIN US ON DISCORD or TELEGRAM.

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Please note that DeFiZap is an experimental project. DeFiZap is not providing any investment advisory or recommendation service. By using DeFiZap or its services, you agree that you are using the Services at your own risk and that you will not and do not hold DeFiZap or its team members liable should the services not perform as per your expectation. DeFiZap is not a licensed financial advisor under any law. Please consult your own independent investment advisor before making any investment decisions.

DeFiZap Leverages 1inch for Efficient Unipooling⚡️📏🦄

One of the most critical components of our ecosystem is liquidity. We’re honored to work with some the top ecosystem partners like Kyber and Uniswap to ensure minimal slippage for everyone.

Today, we take this initiative a step further by integrating one of the leading Decentralized Exchange Aggregators - 1inch.exchange.

What is 1inch?

1inch is a decentralized exchange which sources liquidity from other decentralized exchanges (or DEXs) and splits your order across them to achieve the most optimal exchange rate. Since launch less than a year ago, 1inch has efficiently routed over $185 million across DEXs!

While smaller trades don’t usually end up getting split across different DEXs, 1inch really shines with larger orders. Here’s a clear example:

If you want to swap 1,000 ETH for DAI, instead of processing the entire order on just one DEX and experiencing significant slippage - 1inch will swap 29% of your ETH input on Oasis, 60% on Kyber and 11% on Uniswap.

How does it work with Zaps?

1inch swap option is already available for Unipooling (add liquidity to any pool on Uniswap using just one asset) when you select ETH input.

For those unfamiliar, adding liquidity to Uniswap pools requires depositing equal portions of ETH + entry ERC20 tokens. So if you only have ETH, you will first need to re-allocate ~50% into ERC20s of the pool you want to enter.

Up until today, these re-allocations were processed directly via Uniswap. We are happy to provide an additional option: re-allocations via 1inch.

  1. CHOOSE YOUR POOL.

  2. ENTER HOW MUCH CAPITAL YOU WOULD LIKE TO ADD TO THIS POOL.

  3. SELECT YOUR SWAP PROVIDER + TRANSACTION SPEED.

  4. CLICK ‘ZAP IN’ -> CONFIRM TRANSACTION & YOU ARE DONE!

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Live Test: Deploying 1 ETH to the ETH/DAI Pool.

  • Output after reallocating on Uniswap:

  • Output after swaps on 1inch:

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In the News

Multi-Collateral DAI: first 120 days of liquidity provisioning on 🦄Uniswap💦

Analyzing DAI<>ETH LP vs. 100% ETH holding vs. 50/50 holding since MCD inception.

This report analyzes liquidity provisioning on the new DAI<>ETH Uniswap exchange from the moment it was deployed on Block #8,957,433 (November 18, 2019 04:15:18 PM +UTC) to #9,692,210(Mar-17-2020 11:58:52 PM +UTC) or roughly 120 DAYS.

📊DAI<>ETH LP Activity Since Inception:

Some conclusions:

  • HOLDING 100% ETH would result in ~🔻35.97% LOSS

  • HOLDING 50% in ETH + 50% in DAI would result in ~🔻17.98% LOSS

  • DAI<>ETH LP would result in ~🔻10.07% LOSS🔥

  • Since inception (~120 days ago) DAI pool liquidity provisioning outperformed holding 100% ETH around 75% of the time or ~90 days.

  • Uniswap liquidity provisioning on active pools is proving to be a great alternative to hedge your assets as exchange fees generated seem to be outpacing any impermanent losses incurred. Past few weeks we’ve witnessed some of the most volatile times in crypto history. Extreme volatility resulted in increased volume, especially around stable tokens such as DAI and USDC as many rushed to exit their crypto positions. For example, on March 13th alone, DAI<>ETH LPs proportionally earned ~$75,000 for processing ~$25M worth of swaps!

Additional Resources:


Please note that DeFiZap is an experimental project. DeFiZap is not providing any investment advisory or recommendation service. By using DeFiZap or its services, you agree that you are using the Services at your own risk and that you will not and do not hold DeFiZap or its team members liable should the services not perform as per your expectation. DeFiZap is not a licensed financial advisor under any law. Please consult your own independent investment advisor before making any investment decisions.

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