ZyFAI
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  • Capital Efficiency Issues
  • Why use the ZyFAI smart account?
  1. Smart Account

V.1.0

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Last updated 13 days ago

Capital Efficiency Issues

Capital efficiency isn't a concept released just recently. As a liquidity provider (LP), you have always tried to increase your capital efficiency. This relies on the ability to earn higher returns with the same amount of money thanks to smarter liquidity allocation. For traders, this relies on which DEX has the lower slippage and the deepest liquidity.

Regarding this, many DEX and Lending protocols have tried and are solving these issues for a long time. Curve has been a pioneer in increasing capital efficiency by leveraging vault/lending markets to generate yield on their pools. Balancer, in 2021 as well, with the integration of an Asset Manager for idle tokens to earn yield on lending protocols. And more recently, Fluid DEX with their vault where you can use smart and bad debt to earn additional fees on your lending positions and increase/reduce your supply/borrow rates.

Now, think bigger. Even if these protocol liquidity inefficiencies are partially solved, the issue persists. Count how many protocols we have in the DeFi and blockchain space on EVM (almost 4200) and now think about how many positions with yields this implies.

Here, we have the second level of capital inefficiency, which relates to your personal portfolio and the various DeFi protocols you utilize. Idle tokens are not only found in the positions of DEX/lending protocols. They also pertain to where you're placing your liquidity. Because each week, each day, new opportunities arise, TVL changes, APY adjusts accordingly, and incentives as well.

It's basically impossible to follow these liquidity inefficiencies as they are based on so much parameters. That's why we're creating ZyFAI.

Why use the ZyFAI smart account?

The ZyFAI smart accounts are basically smart contract account deployed on behalf of users to manage funds they are willing to allocate to the ZyFAI agent.

As mentioned in the previous section, it's challenging for DeFi users to secure efficient yields due to the constantly evolving market, daily changes in TVL, and fluctuating APYs. This agent is designed to manage these market movements through rebalancing and auto-compounding to ensure optimal capital efficiency.

It relies on several critical components, including:

  • Session Key setup

  • Smart Account creation

  • AI agent services