What are yield aggregators and how do they maximize DMEX users’ profit?
Decentralized Finance (DeFi) has been a rising star in the cryptocurrency industry since the second half of 2020. From mining, forking to yield aggregators, DeFi has significantly evolved within a relatively short time. Currently, DeFi is the leading sector in the cryptocurrency industry with a total value locked (TVL) exceeding $46 billion. Recently, DeFi yield aggregators are gaining increasing popularity among crypto users. This article will elaborate on what yield aggregators are and how do they maximize users’ profit.
Based on smart contracts, yield aggregators are automated financial service platforms in the DeFi field.
DeFi’s emergence symbolizes the transition from centralized finance to decentralized finance. Built upon the blockchain technology, DeFi aims to reconstruct the traditional financial world with a new set of financial order. Users no longer need permission from traditional centralized institutions to conduct a wide range of financial behaviors, such as insurance, lending, and loans, as well as different forms of tradings. DeFi uses smart contracts to automatically complete various financial activities.
Yield aggregators are smart financial service platforms in the DeFi ecosystem. Without centralized investment management, yield aggregators innovatively employ smart contracts to perform full financial functions. Yield Aggregators help average users obtain high profit by leveraging different DeFi protocols and strategies to maximize user profits.
Yield aggregators automatically query a large pool of DeFi projects, searching for the best yielding rates. After users deposit their crypto assets into the yield aggregator, within the rules of the smart contract, the yield aggregator will automatically shift the funds to the DeFi projects with the highest yield according to real-time market conditions. Yield aggregator is a brand new form of DeFi product and operation model. It will become an indispensable part of the DeFi ecosystem while DeFi gaining increasing popularity in the crypto world.
Yield aggregators greatly simplify DeFi operation and improve users’ profit.
Yield aggregators have four advantages for average users. Firstly, they can reduce the users' entry barrier to DeFi projects. Secondly, they can improve users’ profit. Thirdly, they reduce gas fees. Lastly, they improve users’ investment security. For now, let’s take two popular DeFi yield aggregators, YFI and Golff, as examples, so we can get a better understanding of how yield aggregators can benefit users.
- Greatly reduce users’ entry barrier
At present, the complicated procedures to participate in DeFi projects have created high entry barriers for average users. Not only must users complete a series of complex operations, such as how to register digital wallets, how to use wallet keys, and how to connect their wallets to certain DeFi protocols. They also need to understand the underlying principles If they want to perform more complicated operations such as lending, trading, and mining. Meanwhile, since most DeFi developers tend to heavily focus on the technical aspect, many dapps’ UI and interfaces are unfriendly to international users.
Yield aggregators greatly simplify the procedures to participate in the DeFi projects. For example, YFI, one of the original developers of yield aggregators, sets out to simplify DeFi investment and activities such as yield farming for the broader investor sector. The platform makes use of various bespoke tools to provide yield aggregator for DeFi protocols such as Curve, Compound, and AAVE, bringing those who stake cryptocurrency the highest possible yield in the market.
2. Maximize users profit
Yield Aggregators help average users obtain high profit by leveraging different DeFi protocols and strategies to maximize user profits. Most of the yield aggregators on the market merely serve as a platform or intermediary for various DeFi projects. However, for yield aggregators like Golff, they can provide additional income for users by integrating yield aggregator with the Golff Farm and extra vaults. That is to say, not only can users earn profit from high-yielding DeFi projects, but also can users obtain additional income from the yield aggregators and vaults.
3. Reduce gas fees
Currently, most DeFi projects are based on Ethereum. However, for Ethereum users, the high GAS fees and serious network congestion have always been huge problems. Therefore, average users not only face high entry barriers but also facing exorbitant gas fees. The expensive gas fee has discouraged numerous users from participating in DeFi.
Yield Aggregators reduce users’ gas fees. Take Golff as an example. Golff has devised many yield-farming strategies to lower the gas cost in transactions where funds are moved from one liquidity pool to another. One of those strategies is the solution used by Golff’s Vault 2.0, small funds will be temporarily deposited in Golff’s vault before they are packed up and transferred together in one go. This strategy saves a lot of unnecessary gas fees for small transactions.
4. Improve investment security
The investment returns a user is seeking for varies significantly from one platform to another. It can become quite a chore for users to manually compare yielding rates from every platform to locate the best deal. The risk is also very high since most users do not have sufficient knowledge of the DeFi market. Yield aggregators improve users’ investment security by providing a convenient investment portfolio of verified DeFi projects.
Mining + Yield Aggregator to Maximize User Income
In recent years, the market value of cryptocurrencies has been steadily rising, which created a new prosperity in the mining industry. In particular, mining power platform offers a low entry barrier, secure investment options, and transparent mining data, it has become the first choice of many small investors. How to combine yield aggregators with mining power platform to maximize user income? With the success of early yield aggregators such as YFI and Golff, yield aggregator has become a new direction for future developments.
The unique value of yield aggregators is becoming more and more apparent as users continue to learn more about DeFi products. As the world’s first decentralized mining power financial services platform, DMEX currently offers fully effective mining power NFT products from two of the hottest crypto projects, FIL and Chia. DMEX’s innovative NFT product and DAO governance are genuis compare with the traditional cloud mining products. DMEX users are free to buy or sell their mining power NFT at any time, all information is accessible, traceable, and verifiable on the blockchain.
According to DMEX’s product planning in the second quarter, DMEX will soon launch a brand new yield aggregator, users can quickly and accurately direct their funds towards the best mining products to maximize their investment returns. With such an advantageous yield aggregator design, DMEX’s growth potential warrants more attention.
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