It is obvious that the DeFi markets have experienced a significant cooling over the last year.
After breaking $180 billion in total value locked last November — coinciding with Bitcoin racing to a new all-time high of $68,700 — data from DeFiLlama shows the collective value of this market has now dwindled to around $40 billion.
However, experts are still bullish about the potential of decentralized financing. Protocols are continuing to build furiously during the bear market — ensuring that they’ll be in a strong position for the next wave of adoption. Despite the fact that some retail investors have been scared off by this contraction, there are still many opportunities.
Here’s the problem — across crypto and fiat, many consumers are making a fatal error. They are letting their capital sit in uninteresting accounts, regardless of whether they are saving in U.S. Dollars or stablecoins. And given the runaway levels of inflation seen in major economies right now, this effectively means that their wealth is diminishing — and spending power is eroding with every passing month.
While DeFi could be the solution here, it’s difficult to find the best opportunities and make sure your assets are properly allocated. Even if you find market-beating yields, they can change quickly before you are able take advantage.
Crypto is volatile, so investors need to monitor it 24/7 in order for them to be successful. Plus, traders often end up with FOMO — a fear of missing out — after deploying their assets to a specific protocol.
What is the solution?
Reactive liquidity is a new concept in DeFi. Crypto enthusiasts now have the ability ensure that their digital assets earn the highest risk-adjusted return up to the moment they are required in a different location. Investors have the option to add market triggers that can be customized to their liquidity. This ensures that their positions are always monitored on-chain. The moment conditions are met — which are set by the user — liquidity is shifted to where it is needed.
Mero This is a decentralized approach to finance. This allows funds to be deposited in liquidity pools in return for Mero LP tokens. Mero liquidity pools can be deposited into to earn an auto-compounded yield using automated yield-farming methods. Any user who holds Mero LP tokens can register market triggers or actions to their liquidity — enabling them to earn yield on Mero up until the very moment their assets are needed elsewhere.
Mero currently supports market actions or triggers for adding collateral to loans on protocols like Aave and Compound. Once registered, the Mero protocol’s network of keeper bots keeps a close eye on these loans — and shifts liquidity out of Mero pools (where it earns yield) to the loan’s collateral in the blink of an eye in order to avoid liquidations.
Mero, previously known as Backd was founded by a team that wanted to improve the user experience and efficiency of DeFi’s capital allocation process. Their approach effectively automates the process of asset deployment — ensuring that funds are always allocated most efficiently. If there are better opportunities or funds that are needed for urgent purposes, these funds can be delegated to another location.
All of this can take a lot of weight off a DeFi investor’s shoulders — freeing up precious time so they can focus on other things.
DeFi working across the board
As you might expect, a large part of achieving competitive yields is dependent on ensuring that as many DeFi infrastructure pieces are as possible. Mero Finance has just secured $3.5 Million in funding.
According to DeFi Llama, the platform’s core liquidity pool, which supports deposits for DAI and USDC as well as ETH, have been consistently ranked among the top 10 pools that provide base APY for Ethereum. Three security audits were completed since the platform’s initial launch in Spring last year, and new liquidity pools dedicated to USDT and FRAX were added.
In the next six-months, additional features, beyond collateral top ups, will be launched. Work is also underway to rollout a governance token.
Cointelegraph was told by the project: “Mero allows you to maximize your assets’ power with reactive liquidity. Start using DeFi like a pro with Mero’s 24/7 on-chain monitoring, interest-bearing assets, and automated liquidity management.”
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