How Could DefiMap Help You Make The Most of Onchain Opportunities?
How to Analyze DeFi Strategies
GM, this is your Daily Bolt briefing.
In today’s edition, we’re bringing you a Revelo Review of an interesting service in the DeFi sector: DefiMap.
DefiMap is a service that aims to simplify the increasingly complex DeFi landscape, providing valuable info that could help you figure out the most strategic spot to park assets and earn a yield. The current onchain DeFi environment is complicated and time-consuming to keep up with. Protocols like DEX aggregators and even concentrated liquidity management platforms have seen increased usage from users and liquidity providers who want to spend less time figuring out the best strategies and routes for their onchain liquidity.
TVL of Gamma strategies, a concentrated liquidity management protocol.
When it comes to tracking yield opportunities, and APRs, DefiMap differentiates itself by providing real APR numbers that reflect actual token rewards, as opposed to misleading figures that arise from projected APRs.
The service also aims to take existing onchain data and deliver it to you in a complete and easy-to-understand way, saving time. For many, scouring dune dashboards is a hassle; users want concise info that they can quickly take into account and use to make decisions on how to deploy their funds best. Perhaps in an ideal world, the longest holdup shouldn’t be figuring out where to park your liquidity to earn the best yield, but simply the time it takes to click through your wallet confirmations…
In this Daily Bolt report, we’ll explore how well DefiMap stacks up to any sort of alternative methods yield chasers might currently be using, and how this service can potentially help make your on-chain life easier.
The bread and butter of DefiMap is its Explore section, where you can explore, filter and sort through 40+ strategies, ranging from basic $ETH liquid staking on Lido to more advanced or more recent strategies like Sommelier Finance’s Real Yield USD vault strategy. The number of strategies currently on the platform is expected to increase, as the team is working on adding more coverage across multiple other protocols.
The explore page features all the toggles and filters DeFi users would expect, including the ability to filter by token supplied, reward token received, strategy type, protocol, chain, TVL. Users can even set minimum (or maximum) past 1-year returns. Users can sort by TVL, 30-day or annual return, APR, or even Sharpe ratio, which is refreshing. The Sharpe ratio is used on the Explore strategies page as well as the Dashboard page as a way to sort for the best yield opportunities. The Sharpe ratio is a way to quantify the ratio of the returns of an asset or strategy, compared to its volatility; the higher the better.
As illustrated in the screenshot above, let’s say we’re in the market for a place to park some $ETH. If users have their own preference on which sort of $ETH LSDs they prefer, DefiMap gives the option to toggle results featuring only certain LSDs.
When you’ve found a strategy that catches your attention, you can vet it further on the overview page. The dedicated strategy page is complete with in-depth information, displaying the liquidity and reward tokens, YTD return. You can input the amount of funds you would want to dedicate to this strategy, and also compare it to what you would return on your investment if you just held the assets(s) rather than depositing onto a protocol, as well as what a realistic return would have been if you used other strategies in the category, in this case, other $ETH or $ETH derivative strategies.
The strategy with the highest yield currently among ETH and it’s derivatives is Pendle’s $rETH / $wETH pool. On it’s specific strategy page, we can see the rETH - wETH pool on pendle is on par with returns from other strategies, and definitely better than just holding the Balancer rETH - wETH LP.
Soon, DefiMap will also be providing charting, with their advanced charting feature in beta testing (click here to learn more).
In addition to their Sharpe ratio rankings, DefiMap provides you with numerous detailed risk and volatility indicators. Present, are the Greeks that some DeFi users might be accustomed to such as Alpha and Beta, which will convey above-market returns, and how correlated to the general market’s movements a certain strategy is.
You can also find standard deviation stats and the greatest % drawdown, so you know what you’re getting yourself into when using a strategy.
If everything about the strategy looks good, you can click “Invest Now” to be brought right to the protocol pool page where you can zap in or acquire the appropriate tokens to deposit.
DefiMap also makes it very easy to compare the most used yield strategies to notice any outliers that might stick out, via their comprehensive monthly dashboards.
You can examine specific monthly return figures per strategy. The dashboards assume an initial investment of $10k, hence the y-axis being ordered in increments of $600. The dollar figure monthly charts can help users visualize their returns, rather than having to calculate every parameter to get some sort of estimation of return.
As many of you know by now, yields don’t last forever, and these dashboards reflect that. So it makes sense to display info on a shorter, more realistic time horizon, with a low 5-figure sum as the model investment.
From the get-go, it is clear how much the ETH Shapella upgrade impacted yields, with noticeable spikes in the 30-day charts for $ETH, LSDs, and $BTC as well.
On DefiMap’s stablecoin dashboard, we can also observe one strategy that stands out from the crowd; it looks like at one point it was returning almost 1% in just under 30 days. Upon further examination, we can see the culprit is Aave’s V2 TUSD supply rewards, as shown below.
Now, if you wanted to find this information, you definitely could have done so without Defimap; however, we all know how annoying protocols can sometimes be when it comes to interacting with UIs. Crypto as a whole is notorious for poor UX, making independent yield searching a pain.
Finding this information on TUSD’s yield history took a couple of minutes, after already knowing what to look for. Aave currently requires users to connect a wallet to view their yields, a common practice for projects. Now imagine the time it would take to find and compare all these individual yields, and do so on a regular basis that matches your timeframe.
In addition to their Dashboards page, if these aren’t enough for you, you can also make your own dashboard chart by selecting the strategies you like on the Explore page (up to 6 at a time).
And this isn’t it; on the DefiMap app, the team teases their upcoming leveraged and even delta-neutral strategies, something which many onchain arbitragers would probably appreciate.
Overall, DefiMap provides very solid data that definitely will save DeFi users time, and as a result, potentially money. Having the ability to view top strategies performance in a variety of ways to suit your needs, in one easy-to-use interface proves useful.
This is what DefiMap has to offer, and what you can access for free. With their paid memberships, there is a whole host of other features and tools teased, including:
Exclusive Strategies, which consist of the DefiMap team’s curated list of complex strategies and yield routes.
Advanced Charting for the strategies listed on the DefiMap platform.
Create Your Own Portfolio and receive tracking, performance summaries, and strategies tailored to your personal investing needs.
Customize Strategy Route, which grants the ability to compose and track your own strategies using an extended list of yield routes.
Instant Invest, which is perhaps one of the most promising and convenient features for paid users. This intriguing feature enables you to invest in strategies in one click, directly from the DefiMap platform.
API service, which expands upon DefiMap’s data on their native platform to include other strategies and experiments tailored for specific needs. This is one feature that could prove especially useful for institutions.