At AU21 Capital, we are delighted to announce our recent investment in Reef, a DeFi encompassing cross-chain asset management tool that combines a wide liquidity net with an advanced yield aggregation system to provide investors with powerful and effective tools to manage their digital assets. Our backing signifies our commitment to fostering efficiency and lowering barriers to entry for DeFi investors, paving the way for further growth and adoption in the space.
Fundamental Flaws in Current Investment Management Tools
From top to bottom, existing DeFi asset management services lack the basic functionality that abounds in traditional investment management tools. Below we’ll explore the three most striking shortfalls of current investment platforms.
Exchange Liquidity — Centralized and Decentralized exchanges continually fail to provide an acceptable user experience for DeFi investors. Centralized platforms serve as targets for attacks and offer a narrow range of assets for investors to interact with. Decentralized platforms aren’t much better, plagued by low liquidity that leads to high-cost, high-latency transactions. Furthermore, both variants of exchange, centralized and decentralized, have yet to perform any meaningful integration with any significant DeFi ecosystem.
Yield Farming — Despite the growth of DeFi, earning interest through yield farming remains a highly technical, expensive and fast-paced endeavor that fails to appeal to individual investors. By raising the barriers to entry, platforms block investors from accessing yield farming’s full potential. Additionally, rapidly fluctuating yields force investors to painstakingly monitor the status of the ecosystem, turning what should serve as a low-involvement investment into an actively managed strategy.
Service Fragmentation — The DeFi user experience is being decimated by the increasing fragmentation of financial service provision. Investors must now jump platform-to-platform to perform seemingly basic transactions. On these platforms, users are given little access to optimisation or rebalancing capabilities and are largely blind as to the risks their investments may hold.
Reef — Pioneering the Next Generation of Asset Management
Reef streamlines the DeFi investment process, and integrates Polkadot to enable cross-chain interactivity. Reef solidifies their foundation by merging liquidity from centralized and decentralized exchanges to significantly improve execution, while autonomously maximising returns from lending and staking investment strategies. Reef has also developed a variety of investment tools, called baskets, that utilize artificial intelligence to rebalance portfolio composition based on investors stated risk tolerance. Most importantly, Reef presents all of these functionalities in a straightforward user experience that consolidates what were multi-platform transactions down to a single interface.
We are excited to work alongside Reef as they advance the capabilities of digital asset investment management platforms, increasing confidence and growing adoption in DeFi.