DeFi are financial services that are not controlled by any financial institution, they are run by the "code" on the blockchain, they are decentralized. Once these services are published they will keep operating as long as the blockchain operates. These services are open for anyone to use - access is not controlled - and there are no middle men.

The users get competitive rates and providers of liquidity get rewarded handsomely for the their capital - there are no middle men, so the fees from user flow directly to the providers of capital.

At Dynamic Strategies we continuously scan for optimal risk / reward opportunities to deploy own capital and invest in promising projects

One of the best invention in the blockchain space that automates the role of Market Makers. It bring lower fees and transparency on the price formation to the traders and low fees and attractive returns to those who provide capital.

Trading volumes across all decentralised exchanges average around $4bn (2 million transactions) on a normal day and peak at around $25bn (3.5 million transactions) on the most volatile days when activity is at its highest.

Majority of trading volume currently happens between crypto tokens, but the market for synthetic equity trading and other synthetic real world assets (e.g. Oil) is growing rapidly.

Market takers usually pay 0.3% per trade on most crypto tokens which and 0.01% on stablecoins (e.g. USDT for USDC). Market makers - those who provide capital - can earn between 20% and 60% whilst taking on some risk of capital depreciation.

We help customers make balanced risk/reward decisions on where capital could de deployed and what types of returns can be expected.

Lending protocols bring together those with capital that are willing to lend to whose who want to borrow and are willing to provide collateral. The protocol's job is to establish a lending rate that clears the market, settle transactions and manage collateral. This is all done automatically on the blockchain.

Lending is usually done on a variable rate ranging between 1% and 20% which is determined by the type of collateral provided and the state of the market. When the crypto market is rallying the lending rates tend to go up as lenders find new places to deploy their capital and borrowers want more leverage expecting that the market will continue to rally.

Lending volumes are at their highest right now, with around $30bn loans outstanding.

Key factors that determine the lending rate:
  • Lending rate is higher on Stablecoins (e.g. USDT, USDC, UST) than Crypto token (e.g. BTC, ETH) as speculators like to borrow Stablecoins to buy more Crypto
  • Lending rate is higher on new blockchains (e.g. Polygon, Fantom, Avalanche) than on established one like Ethereum. Investors demand a premium for risking their capital on blockchain that have not yet been tested by time
  • Lending rate is higher on new lending platforms (e.g. Venus, Ancor) than on established ones like Aave. Investors demand a premium due to higher perceived risk of a hack

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Fast and free connectivity to centralized exchanges is standard in crypto. This is what Centralised Exchange need to offer to compete with DeFi and Decentralized Exchanges. Major exchanges give unlimited access to their order books and offer very fast execution to everyone.

We have built low latency API connectivity to the major exchanges in both Asia, Europe and US and are set-up to run the following strategies:

  • Market Making - our Bot places both bids and offers on ETH Perpetual futures contract and keeps doing so forever. The strategy performs well when the market trades within a range.
  • Cash and Carry - this strategy requires the execution of 2 trades as close to each other as possible. Our Bot does this though an API with minimal slippage
  • Cross Exchange Arbitrage - our Bot takes advantage of price differences between exchanges by buying low and selling high

We also publish a low latency price index for ETH and make it available to the public. Whilst access to the trading tool and bots is proprietary and is available for a fee.

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