Decentralized finance (DeFi) is one of the most critical use cases of blockchain technology. Despite the dramatic decline that has left the total value (TVL) in DeFi at around 20% of its peak ($248.8 billion in November 2021 compared to $48.6 billion in April 2023) , the trend continues and has the potential to recover in the coming years. The main argument for the continued growth of DeFi is the unrivaled advantages that arise from financial services being based on decentralized infrastructures.
As DeFi continues to evolve, crypto holders have access to many yield generation opportunities. For example, decentralized exchanges (DEXs) reward liquidity providers (LPs) with the fees generated on their platforms. There are also other investment opportunities such as lending, staking or yield farming.
However, it is more difficult for retail investors to explore all of these options. First of all, investing in digital assets is a risky venture due to their high volatility. Additionally, providing liquidity on most major DEXs carries additional risks, such as temporary losses.
A temporary loss is a situation in which the value of the tokens deposited in liquidity pools turns out to be less than if the tokens were simply held. This risk is inherent to most DEXs that use the Automated Market Maker (AMM) model.
In fact, a study has shown that about half of liquidity providers on Uniswap, the DEX with the largest trading volume, may end up losing money due to temporary losses.
Access to systematic strategies levels the playing field
To get the most out of DeFi, crypto users need to implement sophisticated strategies and view yield farming as a professional asset management business and not a get-rich-quick scheme. Professional fund managers have the best chance of winning in DeFi because they implement complex strategies using advanced financial engineering and quantitative models.
However, even these professionals may face difficulties as DeFi asset management requires additional experience in on-chain logistics. Without the help of blockchain developers who connect each protocol individually on different chains, quant traders will struggle to scale their strategies and realize potential profits.
There is currently a lack of dedicated platforms that provide this on-chain trading infrastructure, enabling closer connections between retail crypto users and professional digital asset managers. As a result, users and investors often navigate the complex world of DeFi alone and participate in yield farming programs manually, without the support of systematic strategies. Due to the lack of a systematic approach, this manual process can lead to losses rather than profits.
This DeFi platform offers automated asset management
Range Protocol is an all-in-one on-chain asset management platform and ecosystem. It connects DeFi users with experienced vault managers who leverage advanced quantitative strategies to make near-instantaneous adjustments to changing market conditions. These managers create non-custodial portfolios tailored to different asset strategies and risk tolerances. This approach ensures that systematic trading strategies are accessible while users remain in complete control of their funds.
Source: Range Protocol
Additionally, professional fund managers who choose Range benefit from benefits such as greater reach, lower costs and improved returns through strategic leverage and fungible Liquidity Providers (LP) tokens with better utility.
Professionally managed safes
Range’s first product release is the Concentrated Liquidity AMM Vaults, which provides automated vaults that enable users to systematically provide liquidity on concentrated, liquidity-based DEXs such as Uniswap V3, PancakeSwap V3 and QuickSwap V3. These vaults increase LP returns through optimized liquidity ranges, quick adjustments to changing market conditions, and just-in-time (JIT) liquidity adjustment. Vault managers conduct backtesting to identify profitable price ranges for providing liquidity, enabling capital-efficient liquidity provision and higher returns. Their quantitative models quickly adapt to volatile or trending markets, while JIT liquidity rebalancing enables real-time adjustments as price ranges shift, maximizing returns and minimizing rebalancing fees.
Source: Range Protocol
Range Vaults allow users to allocate their assets into customized strategies that match their risk preferences while avoiding custodial risks. These vault strategies are managed off-chain to leverage rich data for financial modeling. Although the calculations occur off-chain, they are executed on-chain in real time, allowing for quick adjustments in response to market changes.
Range Protocol plans to build targeted vaults for various DeFi segments, including liquidity provision for AMMs with concentrated liquidity, NFT financing, liquid staking, and derivatives markets such as options and perpetual swaps. Within each category, specific strategies are used based on the liquidity of the assets and the risk tolerance of the users.
Advantages for private investors and professional asset managers alike
Range addresses the needs and expectations of all stakeholders and paves the way for active asset management by providing a trusted trading infrastructure tailored to the needs of private users and asset managers. It ensures capital efficiency and automation while ensuring asset security and diversification and provides the following advantages.
For users:
- Asset Security – Crypto assets are securely stored in non-custodial vaults on-chain, allowing withdrawals at any time.
- Product Diversity – Range supports various assets and offers multiple strategies for each token to ensure a diverse investment portfolio.
- Complete Automation – Range’s vaults are managed through fully automated systematic strategies, eliminating the need for manual intervention.
For asset managers and quant trading shops:
- Financing – Asset managers can quickly scale their strategies on Range, facilitating growth and expansion.
- Development – The Range Protocol provides the infrastructure to conduct interactions efficiently and relieves vault managers of on-chain logistics.
Experienced team
The team behind Range Protocol has extensive experience in market making activities for over 200 projects and over-the-counter trades. Quantitative research is one of the core elements of the platform’s features, and the team plans to apply its proprietary research to Range Protocol’s strategies.
Source: Range Protocol
Range wants to further expand to integrate other DeFi segments. The DEX liquidity management vaults form the beginning of a broader ecosystem that includes non-fungible tokens (NFTs), liquid stake tokens and derivatives.
Thanks to Range, the DeFi market now has an on-chain, non-custodial quantitative trading infrastructure that offers active asset management and meets the expectations of both private crypto users and dedicated asset managers.
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