A new decentralized financial platform is ready to take advantage of the wave of “profitable agriculture” by automating the process of finding the most efficient options for its users.
The Rari Capital platform automatically moves users’ funds to the highest performing platform. At launch, Rari only plays with the performance differences between the compound and dYdX and constantly balances out when its dynamic interest rates change.
Rari only supports performance in stablecoins, but integration with 0x allows users to automatically sell their cryptocurrencies when they deposit on the platform. After depositing, Rari automatically switches between Dai, USDC and USDT to maximize performance and compensate for your deviations from the dollar pegs.
Because they use compound, their users are also entitled to COMP awards for using the platform. As Jack Lipstone, co-founder of Rari, told Cointelegraph, the fund will automatically liquidate all COMPs and distribute them to users every three days.
The team claims that the platform’s annual return is three times that of Compound, despite the hype surrounding yield farming.
The system uses a token sharing system like the one that Compound first introduced with its cTokens. By providing capital to Rari, users receive a Rari Fund token that represents their participation in the pool. The token can be exchanged for the underlying funds as well as for cumulative returns at any time. The token is fungible, which means that the shares can be transferred and exchanged in a similar way to composite tokens.
The downside to using Rari is the 20% performance fee on cumulative performance, similar to that of many traditional hedge funds. Lipstone revealed that a potential future for Rari is to enter traditional markets and “become an ETF”, although that is far in the future.
The launch of Rari is one of the first new projects to subscribe to the Guarded Launch concept described by Ken Deeter, partner at Electric Capital. While Rari has been reviewed by Quantstamp and independent investigators, deposits for the first period are still limited to a maximum of $ 350. This ensures that potential weaknesses in your smart contracts do not lead to significant losses for your users.
Safety precautions also mean that Rari does not pursue risky strategies such as aggressive compound farming.. As the rewards program also distributes funds to borrowers, some leveraged positions on the platform are taken through recurring asset loans and credits to maximize their COMP stake. This approach can expose “farmers” to fluctuations in market prices, which could dissolve part of their positions.
The system is not yet completely decentralized. because the balancing mechanism works centrally, although it is based on a whitelist that can only send money to the protocols it works with.
Given the variety of performance options at DeFi, however, Rari should be very helpful for those who do not have the time to find the best options themselves.