According to CryptoPotato, Swaap Finance, a DeFi market maker, has introduced a new service named Swap Earn. This service allows investors to earn additional yield on their already yield-bearing assets. The protocol enhances investor returns through market-making yield, distributing investors' assets across multiple pre-set protocols.
Market making in the DeFi sector involves users providing liquidity to decentralized exchanges, which facilitates easy finding of sellers for crypto buyers and vice versa. The yield from market-making can originate from either trading/swap fees or intrinsic token rewards. According to a press release, Swap Earn liquidity providers can earn a 'superior yield' by depositing their assets into single asset vaults. These assets are then dynamically distributed across multiple protocols to find the most optimal yield at any given time. This model offers investors passive returns that are also trust minimized. Over time, Swaap's decentralized governance can introduce new allocation rules and strategies to maintain high yields.
David Bouba of Swaap Labs commented on the new service, stating that the simplicity and efficiency of Swaap Earn is its main attraction. By combining innovative market-making strategies with passive yield generation, they aim to set a new standard for liquidity utilization in the DeFi space.
The first vaults on Swaap Earn were developed in collaboration with Lido and Aave, with Aave providing a grant. Lido is the world's largest DeFi protocol offering investors Liquid staking assets like Staked Ether (stETH), while Aave is a lending protocol with $11.8 billion under management. Swaap noted that revised fee structures among popular AMMs have made sustainable yields more difficult to achieve within DeFi. Swaap Earn was developed to address these challenges while increasing the returns available to LPs.
Swaap Labs closed a seed funding round for $4.5 million a year ago, led by Signature Ventures and with participation from CoinShares CSO Meltem Demirors. Swaap v2 was launched in July 2023, introducing advanced autopilot market trading strategies to all users for the first time.