Announcing Idle Finance v2

A DeFi rebalancing protocol

Today, we’re extremely excited to announce the official launch of the Idle Finance v2 platform and new contract architecture.

You can start earning the best interest rate return with Idle Finance.

This main update comes with different new features:

A new audited smart contracts suite

Since the inception of our first beta version in August 2019, we’ve been working on different features for the Idle smart contracts suite, which has now been audited.

First and foremost, we included the Dynamic Funds Allocation (DFA) mechanism, which dynamically allocates Idle funds across different lending protocols in order to benefit from an aggregated interest rate that represents the highest available among all the lending markets.

Additionally, with the new smart contract architecture, adding new tokens and protocols has never been easier. We prioritized implementing the major stablecoins to offer a profitable interest rate to our users and will continue adding tokens in the future. We have partnered with Compound and Fulcrum protocols, and are in talks with other lending protocols to increase Idle’s lending outreach.

Lastly, our decentralized rebalance, which represents Adam Smith’s invisible hand component, is still present and more powerful than ever. It allows Idle to be powered by a completely decentralized rebalancing mechanism, which means that smart contracts and allocation strategy do not rely on any specific pair of human hands.

Although it is present a system (a.k.a. “IdleWatcher”) that automatically keeps our rates always up-to-date, thanks to this intrinsic feature, the protocol is able to leverage network interaction and self-rebalance without necessarily having to rely on any centralized system.

Useful features for a brand-new UI/UX

To allow people to use our protocol, we crafted a restyled UI/UX, in order to seamlessly and easily access our smart contract suite. You can now keep track of your money at a glance.

Thanks to tons of feedback collected since our beta inception, we provided access to the platform with multiple fiat-to-crypto gateways, to give access to almost anyone in the world to our platform.

Ultimately, thanks to our last collaboration with Kyber and 0x, we now allow anyone to use our platform with any token at the best exchange rate possible.

Motivations

Last year marked the dawn and affirmation of many lending protocols: Compound, Fulcrum, dYdX, DDEX, and brand new Aave DLP and Maker DSR. Interest rates behavior invariably reacts to liquidity distribution among the different protocols, and rates level varies at a block-by-block pace.

Answers collected during ETHBerlin (n=78)

The appealing thing right now is that, in this narrow and volatile market, interest rates are higher than ever. However, there are four key challenges that both users and integrators face when utilizing lending protocols:

Interest rates volatility: as the DeFi industry remains narrow, platform-specific demand and supply dynamics can diverge significantly. Monitoring interest rates: optimizing returns requires monitoring all different rates, and manually moving funds across DeFi protocols; this activity demands a massive amount of time and reduces net profits conspicuously due to all transaction fees paid for each manual rebalance. Optimal allocation sizing: computing the exact amount of funds to move across lending protocols to maximize the interest rate return is tough for non-technical users. Multiple protocols/tokens management: interacting with different platforms, and managing multiple tokens at the same time with different pricing mechanisms can be highly overwhelming.

Besides, even technical integrators can find some hitches: if a dApp wants to offer a comprehensive lending service to its users, it needs to have multiple integrations to connect different protocols, review the entire documentation anytime a new protocol appears, and integrate all specific functions of each lending protocol.

To solve these hurdles, we created Idle, a rebalancing protocol. Our users and dApp developers can directly plug their funds and benefit from an optimized allocation that automatically rebalances itself and leverages decentralized lending protocols to achieve an optimized return.

Looking forward

With Idle, we started with Ethereum money markets. Yet we have other direct opportunities to create more value for our users:

Implement other protocols to offer a full-comprehensive lending experience;

to offer a full-comprehensive lending experience; Build a comprehensive stat page with Idle protocol’s historical performance;

with Idle protocol’s historical performance; Offer a risk-weighted allocation strategy, thanks to a possible collaboration with DeFiScore;

strategy, thanks to a possible collaboration with DeFiScore; Design a concept for a single token that gathers all the assets in the Ethereum money markets, and automatically rebalances across both assets and protocols (eg from DAI to USDc, from Compound to Fulcrum and so on, following either a yield-seeking or a risk-weighted allocation strategy).

Idle protocol came out of a hackathon project that we worked on with Consensys Relays on Gitcoin. We are now pleased to share that we are also backed by Consensys’ Tachyon accelerator program.

We have more plans in our long-term roadmap, which you can find in a more in-depth article.

Keep yourself updated

We’re building Idle for the Ethereum ecosystem and its great community. We’d love for you to be part of our development process.

To follow our updates and new releases, subscribe to our newsletter. If you have any questions, feel free to ask us on Twitter, Discord, or Telegram.