Swaap Labs has announced the launch of Swaap Earn, a new protocol for enhancing DeFi yields. The solution enables liquidity providers to enjoy improved yields, maximizing DeFi earnings while mitigating risk.
Swaap Earn utilizes a novel supercharged liquidity system that allows users to top up returns even from natively yield-bearing tokens with market-making yield. It builds upon the success of Swaap Maker, the protocol’s existing market making infrastructure, which has delivered consistent yields so far. Single-asset exposure supports instant token deposits with no position management.
Users can enjoy enhanced returns on yield-bearing tokens and take advantage of optimal asset allocation. Dynamically distributed across a set of predefined protocols, this strategy ensures users always get the best yields that match their risk tolerance. Strategies and allocation rules can be added by governance to ensure vaults are up-to-date with the latest yield-generation opportunities.
After depositing funds into single-asset vaults, Swaap Earn Liquidity Providers can earn superior yields. The strategy is 100% passive, with the protocol adjusting capital allocation to whitelisted protocols to increase returns in a trust-minimized manner.
David Bouba of Swaap Labs said: “The beauty of Swaap Earn lies in its simplicity and efficiency. By marrying our cutting-edge market-making strategies with passive yield generation, we’re setting a new standard for liquidity utilization in the DeFi space.”
Swaap Earn prioritizes usability, with a particular focus on UI/UX. The first vaults Swaap Earn utilizes have been developed in conjunction with partners that include Lido and AAVE, with AAVE providing a grant to Swaap Labs to support the development of Swaap Earn.
With Swaap Earn, deposited asset liquidity is directed to DAO-approved protocols and assets. A strategist dynamically distributes the liquidity among pre-approved options, facilitating optimal capital allocation based on market conditions and efficient collateral management on lending platforms. This dynamic strategy enables returns to be maximized while minimizing downside risk.
DeFi users commonly struggle with risk management and configuring complex strategies. Despite progress in strategy and risk mitigation, issues such as poor strategy design and liquidation risks persist. Swaap Earn was created to solve these challenges while increasing the returns available to LPs.
Efficient liquidity utilization is one of the greatest challenges faced by DeFi developers, with the expanding multi-chain landscape resulting in liquidity fragmentation. Revised fee structures by popular AMMs have also resulted in LPs earning less fees than previously. As a result, sustainable yield has become harder to find. Swaap Earn was created to address these problems and set a new benchmark for attainable DeFi yield.
About Swaap
Swaap is a non-custodial and interoperable market making infrastructure. It provides optimized market making strategies tailored to the needs of DeFi users. From yield maximization to liquidity enhancement, Swaap empowers onchain users to extract more value and enjoy greater capital efficiency.