There’s no escaping it: the DeFi markets have cooled down over the past year.
After breaking $180 billion in total value locked last November — coinciding with Bitcoin racing to a new all-time high of $68,700 — data from DeFiLlama shows the collective value of this market has now dwindled to around $40 billion.
Nonetheless, experts remain bullish on the potential of decentralized finance. Protocols are continuing to build furiously during the bear market — ensuring that they’ll be in a strong position for the next wave of adoption. And although this recent contraction has scared away some retail investors, there are still opportunities to be had.
Here’s the problem — across crypto and fiat, many consumers are making a fatal error. Whether their savings are denominated in U.S. dollars or stablecoins, they’re letting their capital sit idle in accounts that aren’t earning interest. And given the runaway levels of inflation seen in major economies right now, this effectively means that their wealth is diminishing — and spending power is eroding with every passing month.
DeFi can be the answer here, but finding the best opportunities within this nascent space and ensuring that your assets are always allocated efficiently is a task that is virtually impossible to do manually. And even if you come across market-beating levels of yield, it can often change before you are able to take advantage of the opportunity.
Crypto is a volatile market that requires 24/7 monitoring in order to be an efficient investor. Plus, traders often end up with FOMO — a fear of missing out — after deploying their assets to a specific protocol.
What’s the answer?
A new concept that’s emerging in DeFi is reactive liquidity. This means that crypto enthusiasts have the ability to ensure their digital assets are earning the best risk-adjusted yield up until the very moment their assets are needed in a different position. Investors are given the ability to add customizable market triggers to their liquidity which ensure that their positions are monitored on-chain at all times. The moment conditions are met — which are set by the user — liquidity is shifted to where it is needed.
Mero is championing this approach to decentralized finance, and argues that it can have big benefits during this time of market turbulence. It allows funds to be deposited into liquidity pools in exchange for Mero LP tokens. Liquidity that is provided into Mero liquidity pools earns auto-compounded yield…