Leverage liquidity layer of the DeFi stack.
Lucidity FinanceNavigating Borrow Rates Trends in DeFi: Insights from the AAVE & Compound Ecosystem
The evolving landscape of decentralized finance (DeFi) continues to draw both intrigue and investment from the broader cryptocurrency community. Among the myriad developments, one trend that stands out is the increasing borrowing rates of DeFi assets across lending protocols. This shift has implications for investors, borrowers, and the DeFi ecosystem at large. In this blog, we'll delve into the reasons behind these rising rates, compare various assets on the Ethereum network, and analyz...
Lucidity FinanceState of Personalization [Web2 v/s Web3]
Personalization has been a driving force behind the success of Web2 platforms, shaping user experiences and setting new standards for digital interaction. Whether it's the curated playlists on Spotify, product recommendations on Amazon, or the tailored content feeds on social media, personalization drives engagement to the extent that we almost take it for granted. However, such personalization is fundamentally absent in the web3 ecosystem, despite the wealth of available on-chain data. ...
Lucidity FinanceState of DeFi Leverage: Jan'24
2024 started strong for DeFi, with a mix of events through the first month. Restaking was one of the strongest narratives within the sector witnessing over $1.7B worth of inflows.Source: DeFiLlamaThere were multiple developments within the leverage landscape throughout the month.Starting with MakerDAO passing two executive votes, with the key highlight being an increase of Spark’s DAI debt ceiling from 800M to 1.2B.Morpho labs continued to ship, with Blockanalytica together with B.protocol co...
Lucidity FinanceNavigating Borrow Rates Trends in DeFi: Insights from the AAVE & Compound Ecosystem
The evolving landscape of decentralized finance (DeFi) continues to draw both intrigue and investment from the broader cryptocurrency community. Among the myriad developments, one trend that stands out is the increasing borrowing rates of DeFi assets across lending protocols. This shift has implications for investors, borrowers, and the DeFi ecosystem at large. In this blog, we'll delve into the reasons behind these rising rates, compare various assets on the Ethereum network, and analyz...
Lucidity FinanceState of Personalization [Web2 v/s Web3]
Personalization has been a driving force behind the success of Web2 platforms, shaping user experiences and setting new standards for digital interaction. Whether it's the curated playlists on Spotify, product recommendations on Amazon, or the tailored content feeds on social media, personalization drives engagement to the extent that we almost take it for granted. However, such personalization is fundamentally absent in the web3 ecosystem, despite the wealth of available on-chain data. ...
Lucidity FinanceState of DeFi Leverage: Jan'24
2024 started strong for DeFi, with a mix of events through the first month. Restaking was one of the strongest narratives within the sector witnessing over $1.7B worth of inflows.Source: DeFiLlamaThere were multiple developments within the leverage landscape throughout the month.Starting with MakerDAO passing two executive votes, with the key highlight being an increase of Spark’s DAI debt ceiling from 800M to 1.2B.Morpho labs continued to ship, with Blockanalytica together with B.protocol co...
Leverage liquidity layer of the DeFi stack.
Subscribe to Lucidity Finance
Subscribe to Lucidity Finance
Share Dialog
Share Dialog
<100 subscribers
<100 subscribers
At the start of 2024, we shared our plan for the year. Now that we’re half way through, we wanted to share what we’ve been upto so far, and our vision for the future.
With the first version of everything in our whitepaper built out, the goal for Lucidity has evolved to build the fundamentally missing piece of infrastructure in the current DeFi stack:
AI-powered commoditisation layer for DeFi leverage
There are 550+ lending/CDP protocols building across chains. This number is growing supported by the ongoing developments within L2 ecosystems. Including other forms of leverage (perpetuals, RWA lending, NFT lending, private credit, etc.) takes the total to over 700.
The consumers of this leverage doesn’t just include end users. It includes a series of stakeholders operating in the ecosystem ranging from vaults/yield protocols to liquidators, asset managers, credit scoring protocols, etc. The way these stakeholders currently interact with lending markets is siloed and fragmented.
This makes the current landscape extremely complex for any new users or builders to operate in. One shouldn’t have to jump hoops to manage positions across protocols, and a builder shouldn’t have to linearly go through redundant integrations without any visibility into risk frameworks to deploy scalable leverage use-cases.
Lucidity started with a vision to unify the fragmentation of liquidity and development for all these stakeholders.
Lucidity’s architecture consists of three primary components
Discovery engine: deep learning model(s) to assess risks across various sources of leverage and power automation across protocols and chains
Protocol proxy engine: the execution layer including a series of integrations with lending/CDP protocols, cross-chain routing, account abstraction, etc.
Data Engine: comprehensive realtime and historical data to power the other two components.
Read more here.
To ensure that each of these components evolve in the right direction, we built the first use case of Lucidity’s infrastructure in house - a portfolio management protocol, live on Ethereum and Base. This protocol was launched in a closed version for waitlisted users to get targeted feedback. In less than a couple months of launch, we saw 2K+ users and 35K+ transactions routed through Lucidity.
We have been building based on consistent feedback from our community as well as teams building at the heart DeFi leverage and interoperaibility - Wormhole, Safe, RiskDAO, Euler, Liquidity, Morpho, Alchemy, Tenderly, to name a few.
And this brings us to the vision…
Having received the initial validations from our community and ecosystem partners, we’re now doubling down on our long term vision to be the one-stop discovery, development, and routing layer for all things leverage. Unlike a general purpose infrastructure layer, we are focused on enabling usecases that can scale the current DeFi leverage consumption manifolds.
What this means at the protocol level:
The discovery engine will continue to evolve to be able to assess risks across three key dimensions (protocol, asset, and borrower risk). This will be clubbed with building associated toolings for different stakeholders to use the discovery engine in their protocols, and even backtest their own leverage strategies in line with their risk appetite.
For the protocol proxy engine, we will continue adding more protocol integrations and expanding across networks (currently focusing within the L2 ecosystem). We will also be adding a ton of automation recipes and strategies that builders can plug into their products.
The data engine will evolve to include hybrid processing frameworks that can support time sensitive compute requirements and sophisticated feature engineering.
Everything will be bundled into a modular SDK that teams can permissionlessly build on top of. Some possible use cases we are particularly excited about:
Open yields marketplace: yield protocols/ asset managers/ individual users can permissionlessly build vault products with advanced leverage strategies.
Aggregated credit scoring: users subscribe build an aggregated risk profile by subscribing to third multiple credit scoring models and incentivised by lending protocols to improve their scores.
DeFi brokerage: handle risk exposure across a user’s cross-chain portfolio via common accounts on integrated protocols - a central accounting layer. And more…
We couldn’t be more excited about the possibility of enabling a ton of new use cases on top of leverage markets, to contribute towards onboarding the next wave of DeFi users. And we’ll be collaborating with teams building within the ecosystem.
If you’re already building within DeFi leverage landscape or have any more ideas, we would love to be a part of your journey!
Let’s make DeFi great again…
At the start of 2024, we shared our plan for the year. Now that we’re half way through, we wanted to share what we’ve been upto so far, and our vision for the future.
With the first version of everything in our whitepaper built out, the goal for Lucidity has evolved to build the fundamentally missing piece of infrastructure in the current DeFi stack:
AI-powered commoditisation layer for DeFi leverage
There are 550+ lending/CDP protocols building across chains. This number is growing supported by the ongoing developments within L2 ecosystems. Including other forms of leverage (perpetuals, RWA lending, NFT lending, private credit, etc.) takes the total to over 700.
The consumers of this leverage doesn’t just include end users. It includes a series of stakeholders operating in the ecosystem ranging from vaults/yield protocols to liquidators, asset managers, credit scoring protocols, etc. The way these stakeholders currently interact with lending markets is siloed and fragmented.
This makes the current landscape extremely complex for any new users or builders to operate in. One shouldn’t have to jump hoops to manage positions across protocols, and a builder shouldn’t have to linearly go through redundant integrations without any visibility into risk frameworks to deploy scalable leverage use-cases.
Lucidity started with a vision to unify the fragmentation of liquidity and development for all these stakeholders.
Lucidity’s architecture consists of three primary components
Discovery engine: deep learning model(s) to assess risks across various sources of leverage and power automation across protocols and chains
Protocol proxy engine: the execution layer including a series of integrations with lending/CDP protocols, cross-chain routing, account abstraction, etc.
Data Engine: comprehensive realtime and historical data to power the other two components.
Read more here.
To ensure that each of these components evolve in the right direction, we built the first use case of Lucidity’s infrastructure in house - a portfolio management protocol, live on Ethereum and Base. This protocol was launched in a closed version for waitlisted users to get targeted feedback. In less than a couple months of launch, we saw 2K+ users and 35K+ transactions routed through Lucidity.
We have been building based on consistent feedback from our community as well as teams building at the heart DeFi leverage and interoperaibility - Wormhole, Safe, RiskDAO, Euler, Liquidity, Morpho, Alchemy, Tenderly, to name a few.
And this brings us to the vision…
Having received the initial validations from our community and ecosystem partners, we’re now doubling down on our long term vision to be the one-stop discovery, development, and routing layer for all things leverage. Unlike a general purpose infrastructure layer, we are focused on enabling usecases that can scale the current DeFi leverage consumption manifolds.
What this means at the protocol level:
The discovery engine will continue to evolve to be able to assess risks across three key dimensions (protocol, asset, and borrower risk). This will be clubbed with building associated toolings for different stakeholders to use the discovery engine in their protocols, and even backtest their own leverage strategies in line with their risk appetite.
For the protocol proxy engine, we will continue adding more protocol integrations and expanding across networks (currently focusing within the L2 ecosystem). We will also be adding a ton of automation recipes and strategies that builders can plug into their products.
The data engine will evolve to include hybrid processing frameworks that can support time sensitive compute requirements and sophisticated feature engineering.
Everything will be bundled into a modular SDK that teams can permissionlessly build on top of. Some possible use cases we are particularly excited about:
Open yields marketplace: yield protocols/ asset managers/ individual users can permissionlessly build vault products with advanced leverage strategies.
Aggregated credit scoring: users subscribe build an aggregated risk profile by subscribing to third multiple credit scoring models and incentivised by lending protocols to improve their scores.
DeFi brokerage: handle risk exposure across a user’s cross-chain portfolio via common accounts on integrated protocols - a central accounting layer. And more…
We couldn’t be more excited about the possibility of enabling a ton of new use cases on top of leverage markets, to contribute towards onboarding the next wave of DeFi users. And we’ll be collaborating with teams building within the ecosystem.
If you’re already building within DeFi leverage landscape or have any more ideas, we would love to be a part of your journey!
Let’s make DeFi great again…
No activity yet