Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
This week, we cover a powerful tool for identifying and executing DeFi income strategies called Summer.fi!
Years ago, I was the second hire at Zapper during DeFi Summer. At that time, Zapper was a go-to application for discovering DeFi farms, including how to enter or exit them. While Zapper’s gone a different direction, the demand is still there for an app that curates the best DeFi opportunities.
Built by the team who originally pioneered the Oasis app for MakerDAO CDPs, Summer.fi has emerged as one of the most popular applications for borrowing, lending, and earning onchain across Ethereum, Base, Optimism, and Arbitrum. Today, Summer.fi enables over $4.2B in assets to be managed onchain.
Summer.fi helps users to borrow, lend, and multiply their portfolio assets in a few clicks, thanks to industry leading automation tools. Opening positions that you have to monitor can be confusing, risky, and time-consuming, so we need a tool that helps us to:
- Save time
- Discover opportunities
- Find balance between risk and reward
- Find the correct strategy for our portfolio based on our assets and network
Similar to Instadapp and DeFiSaver, Summer.fi’s Borrow product offers a library of powerful flashloan recipes, accessible in a few clicks using automation tools to borrow against collateral via Aave, Maker, Morpho, Spark and Ajna.
What’s even more unique on Summer.fi is their Earn product. Earn allows you to “earn long term yields to compound your crypto capital” thanks to the following benefits.
Curation: Summer.fi curates sustainable farms that require zero management as well as those that you can actively manage.
Best Yields: Their dedicated team searches for and evaluates the best DeFi yields so you don’t have to.
Diligence: Summer.fi’s technical team diligences all strategies.
Tracking: Summer.fi even offers tools to view and monitor your portfolio and strategies deployed in-app.
In order to choose the best strategies for my portfolio, I can use the user-friendly Summer.fi app to filter Earn strategies based on factors such as:
- Asset
- Network
- Protocol
- Liquidity (how much is left to access)
- Active vs Passive management
- 7-day net APY
The most powerful aspect of Summer.fi Earn is that anyone can trustlessly create strategies, including leveraged positions, for just a few cents when transacting on Base, Optimism, or Arbitrum.
You’ll notice I screenshot a cbETH/ETH Yield loop (deposit cbETH, borrow ETH, swap for cbETH, deposit more cbETH, and repeat). To achieve these positions, it would normally cost a lot of time and manual effort but with Summer.fi’s automation tools, it’s just a few clicks.
My favorite Earn strategy is the Yield Loop for both stablecoins and like-kind pairs (ie borrow ETH against cbETH).
Yield loop strategies are Earn positions that enable you to boost your yields by multiplying the underlying yield-bearing asset, while avoiding high risk liquidations present with more volatile pairs (ie borrowing USDC against ETH).
With Yield Loops, a stablecoin pair is very unlikely to be liquidated because stablecoins should remain stable and follow one another in price (barring a stablecoin depegging).
The same idea applies to…
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
