Author: VIKTOR DEFI
Translation: Deep Tide TechFlow
The internet we use today is different from the internet in the 1990s. Back then, it was difficult to find online content until Google solved the problem of content discovery through its aggregator.
Now, we are witnessing the rise of aggregator platforms worth billions of dollars that solve important problems on the internet. For example, Amazon is used to find items, Facebook is used to find people, Google is used to find content, and so on.
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In order to drive the development of the blockchain industry, there is a need for key aggregation platforms to solve the user discovery problem. This is where Instadapp comes in. Instadapp aims to be the ultimate aggregation layer in DeFi by aggregating various DeFi protocols.
Instadapp is one of the leading protocols in DeFi and easily surpasses other protocols by timely launching products needed by the industry. Want to know more? Let’s delve into it.
What is Instadapp
Instadapp is a middleware protocol that simplifies and unifies the frontend of DeFi. Just like the Web2 aggregator mentioned earlier, Instadapp brings the best DeFi platforms together on one platform for users to easily access and have a unified experience. The platform currently integrates eight protocols: MakerDAO, Liquity, Morpho, Aave, Compound, Lido, Uniswap, and Hop Protocol.
Users don’t need to switch between different protocols, they can complete all operations with just a few clicks. The best part is that Instadapp has already launched on Ethereum, Polygon, Arbitrum, Avalanche, Optimism, Fantom, and Base, helping users maximize their time and cost on-chain.
The technology behind Instadapp
Instadapp utilizes a new technology called DeFi Smart Account (DSA) to provide users with greater flexibility and accessibility. DSA is a user-controlled smart contract that allows them to perform multiple operations in a single blockchain transaction. DSA can be seen as a sub-account for users on Instadapp, allowing them to manage positions and interact with DeFi protocols in a trustless manner.
These DSAs are generated using regular Ethereum accounts. Simply connect your Ethereum wallet to Instadapp Pro to create your DSA account; instantly, you can enter the multi-dimensional universe of DeFi. Interestingly, it allows users to create an unlimited number of accounts in a trustless manner. Additionally, users can withdraw funds back to their Ethereum wallet at any time with zero restrictions.
Another incredible aspect of DSA is that connectors can extend them. Connectors enable developers to build more features, operations, and use cases on DSAs. For example, connectors can take various forms, such as from protocol to identity verification connectors.
Through the unified experience of Instadapp, users can perform the following operations:
Multi-protocol refinancing
Lending is one of the main use cases of decentralized finance. Users use multiple lending protocols that suit their strategies to open and finance debt positions. Instadapp’s multi-protocol financing feature allows users to migrate positions and refinance between top lending protocols in just a few clicks.
Cross-chain bridge
The existence of blockchain bridges is to transfer crypto assets from one network to another. With Instadapp, users can easily extract funds from their DSA accounts to another network, saving gas fees and time.
Sweep Swap
We all have these tokens in our wallets, but we either don’t use them or get tired of holding them. You can use Instadapp’s sweep swap feature to exchange these tokens for a single token.
Protection Automation
Automation is disrupting every industry, and DeFi is no exception. The protection automation feature allows users to automatically repay debt in market uncertainty. Each automation event only requires a fee of 0.3% to 0.4%.
Flash Loan Aggregator
Instadapp’s flash loan aggregator utilizes advanced routing mechanisms to discover the best flash loan rates among major providers such as Aave, MakerDAO, Balancer, Compound, etc. It starts with seven routes, providing users with broader liquidity and token choices at a lower cost.
That’s not all; Instadapp also manages a flash loan pool, which serves as a source of funds for the aggregator. This makes the aggregator a competitive and cost-effective flash loan platform. Since its launch, Instadapp’s flash loan aggregator has maintained stable revenue growth.
Instadapp Lite
Instadapp Lite is a powerful DeFi yield feature of the Instadapp platform. It scans multiple lending platforms to find the best strategies and annualized yields for users, and users can access all these features with just one click. Accessibility and simplicity are the core features of Instadapp Lite.
Earlier this year, the team launched Lite v2 and introduced an insurance vault that only supports ETH. With the rise of liquidity mining, this vault is strategic and timely. The insurance vault supports Aave v2, Compound’s ETH market, Morpho, and Aave v3, and has accumulated a locked value of over $311 million.
ETH Lite Vaults on Idle Finance
Idle Finance, an automated yield protocol, recently announced its integration with Lite Vaults. Firstly, Idle Finance utilizes a layered system to provide Lite Vault users with more personalized risk strategies and choices. Secondly, it offers two options for new and existing users to earn real returns based on their risk thresholds.
The advanced layer is slightly lower in risk compared to the standard Lite Vault and has a custom loss protection mechanism, while the junior layer covers the advanced layer by increasing the annualized yield. Individuals and institutions that require an additional layer of asset protection may prefer the advanced layer, while users with higher risk tolerance may prefer the junior layer.
Avocado
Avocado is the latest innovative product from Instadapp, leading the development of account abstraction. If you have been a DeFi user for some time, you might be familiar with connecting your wallet to a dapp, switching networks, using native tokens of the network to pay gas fees, and adding new chains through Chainlist for interaction on the new chain.
But Avocado changes everything. It is an innovative smart contract wallet that allows users to perform multi-network transactions using the Avocado Network. This eliminates the need to switch between different networks and also saves on gas fees.
Avocado has its own RPC (Remote Procedure Call). However, it is not a blockchain. Avocado RPC is a network aggregator that searches for available broadcasters to process transactions on a given chain, as shown in the diagram. The best thing about Avocado is its triple abstraction model: network abstraction, gas abstraction, and account abstraction.
Network abstraction ensures access to all network balances on the dashboard, gas abstraction uses USDC as the native gas fee for transactions, and account abstraction provides higher modularity in design and opens up new use cases for the platform. With these features, Instadapp can easily become a leading abstraction and aggregation layer in DeFi.
Once you connect to the Avocado RPC network, the platform creates a native Avo wallet address for you. With this wallet address, you can perform all operations and enjoy the same level of security as your externally owned account (EOA) like Metamask. The team also hinted at some upcoming developments for Avocado, including 2FA security, balance unification, roles, DeFi strategies, and developer incentive programs.
Tokenomics
$INST is the governance and utility token of Instadapp. It has a maximum supply of 100 million INST with a market value of approximately $30 million. 55% of the supply is allocated to community members, 23.8% to the team, 12.1% to investors, and 7.9% to future team and advisors.
The current price of $INST is $1.2, which I believe is undervalued. Instadapp’s TVL is $1.9 billion, and the token reached a historical high of $24.40 during the last bull market. Considering the recent and upcoming developments of Instadapp, it is easy to predict that there will be higher gains in the next bull market.
Summary
As I mentioned before, we are witnessing the emergence of innovative blockchain aggregators. Like Google and Amazon, their goal is to become intermediaries between DeFi protocols and users, attracting users and driving ecosystem growth.
My research shows that Instadapp is tirelessly establishing itself as the ultimate aggregation layer for DeFi in various verticals. At this rate, Instadapp will achieve the same network effect as similar Web2 products, it’s just a matter of time.
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