What’s next for DeCommas in 2023
2022 was a dynamic year in defi, to say the least. It’s been an emotional rollercoaster ride for most of us, with unfavorable price action, security concerns and increased legislative pressure. But DeCommas remains bullish, bear markets are for building!
Now that we’ve wrapped up 2022, it’s time to start looking ahead. We have exciting developments in store for 2023 and we’re excited to tell you all about what’s next for DeCommas!
Spoiler alert: look for DeCommas to continue to deliver tools that make defi accessible, safe and fun to use, whilst keeping decentralization and interoperability a top priority. We’ll be deploying a ground-breaking way to execute complex defi actions without the need for taking any custodiality of assets.
Read on to learn more!
Pathfinder — The quickest path through the defi jungle
DeCommas was founded on the principle of making defi accessible, enabling users to benefit from opportunities regardless of where they arise. We fundamentally believe defi currently is needlessly complex and therefore does not live up to the massive potential it has.
In the last year the core of the DeCommas project has been building and delivering “vault-like” strategies, whilst at the same time developing the infrastructure and protocol to govern and execute these vaults, the defi way. Whilst we’ve seen stellar adoption and performance for our vaults, they also brought tremendous learnings:
- Developing low-risk vaults is complicated: 2022 has definitely been the year where most question marks were raised about custodiality and the safety of user funds. The FTX saga taught us an important lesson here, if the holder of your assets is not secure and stable, this massively impacts the risk/reward ratio of any asset or strategy. In the spirit of defi, you could argue that even a vault managed by a smart contract is a form of unwanted custodiality, even if the custodial is a contract.
- We need to speed up time-to-market: Developing strategies on the current DeCommas protocol is a complicated effort. In order for strategy funding, decision-making and execution to be done in a secure and decentralized manner, a complicated layer of automation is required. As we’ve seen with the GLP Hedged strategy we’ve been working on, this means a long lead time on new strategies. We need to speed up to be able to capitalize on opportunities.
This has led to the following insight: an automation layer that executes on behalf of the users, instead of a smart-contract taking custody of users funds for a longer term, decreases risk, complexity and time-to-market. Enter Pathfinder!
Pathfinder is a simple but brilliant defi tool that allows for user-friendly execution of complex actions within the realm of defi, without taking custodiality over your assets. Think of it as a SkyScanner for defi: find the route you’re looking for, click a button, and execute on demand. This can range from simple actions such as finding the most cost-efficient swap or optimizing for defi funding rates, to more complicated paths that deploy complete delta neutral strategies, all within one interface.
Pathfinder in practice
To illustrate this vision, let’s take a look at a few real world examples that we are currently brewing up. Keep in mind, this is just the beginning! The possibilities with this thing are endless, and Pathfinder could become the point of entry for most defi interactions & transactions.
Imagine a user wants to bridge Token A in Avalanche to B in Optimism. If there is no bridging pair available for token A from Avalanche, A can be swapped to C to be bridged to Optimism. Then C needs to be swapped again to B, the token we needed at Optimism.
The swap the user needs
To make this magic work, we’re pairing a DeCommas route-finding algorithm with the programmer-friendly and cost-efficient technology of our friends at Li.fi. Expect more news on this collaboration soon!
Initially, cross-chain swaps will be fully supported by Li.fi, but we plan to take it as a first important module/step for the Pathfinder and then populate and enrich the routes with more integrations and opportunities, which often will include cross-chain swap in beginning or middle of the route
This is a massive improvement over the previous flow for the same transaction, where Token A would have to be swapped to an intermediary token C on the Avalanche blockchain, to make the jump to Optimism via token C.
The current reality for this user
But the issue here is that even if the bridging works, the swapping of Token A to C and C to B may happen through a low liquidity Automated Market Maker (AMM), which could cause slippage or failure of transactions.
DeCommas believes that if we can create an intelligent engine that can swap intermediate tokens using a high liquidity pool, the chances of bridge failure are less and therefore the end outcome is significantly more capital efficient.
Pathfinder — swapping with more efficiency
Pathfinder doesn’t always have to work with Bridges; it can be used with an AMM if an exact swap cannot be found within the same blockchain. Pathfinder can find an alternative route to swap tokens in a capital-efficient way.
However, this is not something one could pull off overnight. It requires an intelligent algorithm that finds the best, highest liquidity pair. All this will happen in the background with fewer user interventions. We are currently working towards this goal.
Swapping and bridging through Pathfinder are a logical starting point, but they are just the beginning. Imagine the same principle applied to the DeCommas strategies: non-custodial execution of complex cross-chain transactions to deliver, for example, delta neutral trading strategies, at the click of just a few buttons within one single interface.
Let’s take a look at a few examples of how Pathfinder can make complicated routes easy to navigate, all within one interface:
Want to deposit to Aave for the highers APR from the current options? Pathfinder allows you to:
- Spot the best opportunity for USDC in terms of APR;
- Bridge it to the destination chain via li.fi;
- Direct supply into Aave.
Looking for high APR farming with USDC denomination?
- Find the right opportunity;
- Bridge USDC to destination chain;
- Supply USDC to Aave;
- Borrow FRAX;
- Deposit Frax to Stargate farming for 9% APR.
Hedged farming? We got that covered too!
- Spot the opportunity;
- Bridge to destination chain;
- Farm asset X;
- Open hedge for this asset on Perps.
In the current set-up, much like most of the “defi strategy vaults” in the space, a user deploys asset into a smart contract, which they are then x% “owner” of. This pool of user funds is then managed by a layer of defi automation, which identifies the correct parameters and triggers actions on-chain. Although this is a very common operating procedure in defi, there is a form of custodiality in play. Your funds are locked by a smart contract which could be meddled with.
In the near future, Pathfinder will allow you to identify and deploy these strategies without the need to deploy assets into the DeCommas “vault”. This means you’ll have access to an overview of “paths” that lead to achieving certain trading strategies, in a similar fashion to our “Funding rates” feature within Stats, which can be triggered by the click of a button (and the signing of the contract, of course ;-)). The assets won’t flow into an intermediary storage first, the Pathfinder will deploy your assets to their ultimate destination in one algorithmic transaction.
Pathfinder Strategies — Coming soon
This will, inevitably, also mean the current active DeCommas strategies might be migrated to the Pathfinder approach. More on this later on in this post!
More use cases for Pathfinder
DeCommas is still investigating all the use-cases the Pathfinder concept can be applied to. We’re looking at yield farming, staking, leveraged opportunities and NFT interactions just to name a few.
We’re really eager to hear from our community — What do you think are avenues we need to explore within this new concept of finding opportunities in defi? Join us on Discord and get involved!
What about the GLP Hedged strategy?
We know this is the one you’re waiting for, and don’t worry: The GLP Hedged strategy will be delivered. Currently this strategy is still under development and testing, and whilst we’re transitioning to the Pathfinder approach of deploying complex delta- or market-neutral strategies we’ve decided to port the work on this promising strategy to Pathfinder. What does this mean?
- For the GLP Hedged strategy there will not be a deposit of assets as you have seen with the current PERP-ETH-MAINNET and MANGO-PERP-ETH strategies, but we’ll be deploying it as a Pathfinder route from day one.
- Development will need some extra time to deliver this strategy in the most secure and scalable way, which means we’re now looking at the end of Q1 for delivering the GLP Market Neutral Strategy.
Just a little more patience, but we’re making great progress on this strategy. Internal forward testing is ongoing, and we’ll be updating you on this soon!
Other plans and ambitions for 2023
With this bold pivot in approach, other areas of the project will be (positively) impacted as well. Without going in to too much detail, these are the areas we expect to focus on as well:
- Technology & Architecture — With the pivot to Pathfinder, parts of the DeCommas codebase will need refactoring. We’re very happy to report that much of our existing codebase can be repurposed with low efforts, meaning our development cycle will remain efficient and swift.
- Partnerships / Building together — Pathfinder opens up the opportunity for more, bigger and better partnerships. As the Pathfinder potentially acts as an aggregator, or even a meta-aggregator, we’ll be the spider in the defi web. Look for more exciting collabs coming your way!
- Portfolio tracker — We continue to build our defi toolstack to support the main product (which is of course Pathfinder). Portfolio tracker is one of the first focus areas, where we’ll be improving UX, adding analytics by chain, adding analytics by asset type across chains, signature feature, and much more!
- Community incentives — We’ve off to a great start with our Crew3 platform, and are looking to expand. We are currently working on an incentivization scheme that will reward more of our active users, and who knows… we might even start playing around with some NFT’s!
- Bull market soon! — Just kidding. We don’t have a crystal ball, but a little hopium is always good right!
That’s all for now DeCommunity! The DeCommas squad is thrilled to still be around to build and develop the future of defi. Last year has been quite a year, but with the new Pathfinder approach there will be a lot of positive developments coming your way in 2023!
We all know in defi things move fast, and this vision and roadmap might be tweaked once more. Whatever might happen, we will keep you in the loop with updates. It’s a fast-moving industry and it’s all about experimenting, building and releasing things, getting market feedback and then adjusting accordingly.
Thank you for being with us in 2022, and we’re looking forward to building further with our community in 2023. As always, we love to hear from you! Let us know your thoughts about our 2023 vision on Discord and Twitter!