Zerion tackles fragmented DeFi landscape

The creation of Bitcoin in 2008 brought about the first-ever global solution for peer-to-peer trade settlements that don’t require any intermediaries, states the Zerion CEO Evgeny Yurtaev. A key component of this collusion it that individuals can keep control over their assets. “However,” Yurtaev adds, “Bitcoin and early cryptocurrencies only decentralized the issuance and storage of money, not access to the financial system.”

Decentralized finance, or DeFi, may provide the solution. DeFi products and platforms offer a range of financial vehicles and marketplaces that ensure that an individual is the sole custodian of their assets, and the nascent industry has exploded. At the start of the year, the market cap of DeFi assets surpassed US$1 billion for the first time.

These new platforms and assets offer two advantages over legacy financial options. Firstly, individuals can now participate in financial markets while not having to trust any intermediary. Everyone has access and there is no central control. Secondly, open-source protocols allow anyone to build new financial products on top of them.

People from across the globe can now collaborate on new forms of creating value, Yurtaev has said, “which may lead to ever-faster innovation and strong network effects as more and more users and builders move onto the platforms.”

Yurtaev started working on Zerion late in 2018. The platform is designed to give non-technical users the ability to acquire, track and manage assets on many leading DeFi protocols, including MakerDAO, Compound, Uniswap, Set, and Fulcrum.

In December 2019, the company announced a successful seed funding round of US$2 million. The round was lead by Placeholder VC of NYC, with participation from Blockchain Ventures and Gnosis.

Zerion recently launched the decentralized finance (DeFi) SDK, an open-source system of smart contracts that simplifies the integration of various DeFi protocols.

There is currently a wide range of DeFi apps available. They provide much of what the traditional, centralized financial system provides, from borrowing and lending to investing and insuring. They are predominantly Ethereum (ETH) powered.

• Earning interest on crypto-asset holdings can be done with platforms like the Compound protocol and DApps like Dharma and Celsius.
• Converting ETH to other Ethereum tokens can be done securely and privately through decentralized exchanges such as Uniswap or IDEX.
• Hedging cryptographic asset portfolios on decentralized derivatives trading platforms, such as dYdX.
• Insuring against the failure of smart contracts can be done with Nexus Mutual.
• Betting on the outcome of elections or sporting events can be done on prediction markets platforms, such as Augur.
• Storing funds in crypto-backed stablecoins during times of extreme market volatility, as can be seen with DAI.

However, there is no standardized way to add support for DeFi protocols. Developers often have to hardcode integrations or query data through APIs in order to gain access. This is a complex and inefficient task for developers as each protocol integration has its own unique process.

DeFi SDK solves the fragmentation problem across the DeFi space by creating a standard integration format for protocol developers to use, all while remaining trustless and open-source.

For DeFi protocol developers, this means that any updates made are automatically reflected on all DApps that utilize the DeFi SDK. For DApp developers, this means integrating a variety of DeFi protocols is as easy as using a single library. And for the end-user, this means faster support for new DeFi protocols.

At its core, DeFi SDK consists of token adapters and protocol adapters. Token adapters are smart contracts that provide an on-chain solution to fetch the underlying tokens of derivative assets. These adapters essentially act as decoders that make sense of complex ERC20 tokens, such as Uniswap ETH-cDAI tokens. These complex tokens are typically unreadable through normal Ethereum based wallets, and users have to resort to reading balances from the DApp the protocol was designed for.

Token Adapter Example

Protocol adapters are responsible for fetching on-chain DeFi data such as user debt and deposit balances. Typically this information has to be hardcoded or polled through API integrations rather than queried on-chain, which is not ideal.

DeFi SDK contains metadata for each supported protocol, allowing all information related to the protocol to be queried in one on-chain request. From the protocol developer’s perspective, the advantage is that once their protocol adapter has been created, their protocol data is accessible to every wallet and DApp that is integrated with DeFi SDK.

Protocol Adapter Example

The protocols already integrated with DeFi SDK include Maker Dao, Compound, TokenSets, Balancer Labs, Curve, Idle, PoolTogether, AAVE, Sythentix, 0x, Uniswap Protocol, iearn.finance, Bancor, dYdX, and PieDAO.

This first version of DeFi SDK is for precise DeFi accounting. Later versions currently in development will introduce interactive adapters that standardize the way DApps interact with multiple DeFi protocols. DeFi SDK is an important first step in making DeFi apps more broadly accessible.