The retail users that are the most risk adverse in crypto are the newcomers. Defi natives are willing to transact 6-10 times between multiple different protocols to maximize their yield. However, for non-natives, every additional transaction is a barrier that prevents them from participating in the space. How can we expect these users to purchase protection if it’s so hard for them to make the deposit that requires protection?
Yearn utilizes Zapper.fi’s open-source Zap infrastructure to allow users to easily convert any token into the required token for a specific vault. This solution is quite elegant, especially for Yearn’s Curve offerings which requires having multiple different tokens to stake. However, this solution requires 2-3 transactions and is heavily focused on the prerequisite work of obtaining the assets for complex vaults.
- Target users want to deposit into simple, popular protocols that provide yields between 2-15%
- Target users want to deposit simple assets like USDC, DAI, ETH and expect their withdrawals to be on those assets.
Our Proposed Solution
Allow users to deposit tokens like USDC into popular protocols like BarnBridge, stake their position tokens (if offered), and finally buy protection from Risk Harbor in one maybe two transactions max. This would give DeFi newcomers an elegant way to invest in protocols while reducing the number of transactions they have to conduct but also their risk exposure. This would also benefit Risk Harbor by utilizing more capacity.
USDC and DAI have a gas-less transfer mechanism that allows a user to sign message off-chain that approves the transfer of tokens. This message is then transferred to a deposit function which would do all the depositing, staking, and protection purchasing. This would all be done in one transaction. If the token doesn’t offer gas-less transfers, it would require two transactions since the user would have to approve the transfer of tokens.
Circle’s DeFi API would allow users to deposit into DeFi from their bank account via USDC. This would allow us to tap into an even more risk adverse user base.
Protocols That Will Be Supported
Protocols that have pools for primitive tokens like DAI, USDC, and ETH will be considered. These protocols should be mature and have interest from retail investors. We will launch with BarnBridge support initially and expand from there.