DeFi Saver Newsletter: February 2021

February blew past like it always does, but it was in no way less eventful than any other month in the world of decentralized finance.

In terms of market movements, things were as exciting as ever — we’ve had the good, with ETH hitting a new ATH above $2,000, the bad, with a 20% crash in just 12h soon afterwards, and the ugly, with gas prices soaring above 1,500 Gwei during the same crash.

As always, teams in the space have been unfazed by market activity, with some of the month’s highlights being the launch of Reflexer Labs’ RAI, Balancer’s v2 announcement and, perhaps most noteworthy, Optimism team’s announcement of an imminent mainnet launch in March.

And we — we were heads down in work on upcoming architectural and UI updates, with the smart contracts part of the upgrade now being handed over for audits. The release of some very cool things is getting nearer by the day.

DeFi Saver news and updates

Automation audit

Our Automation system audit was finished in early February, with Dedaub completing an extensive security review.

Their conclusion: no funds are at risk.

You can find our summary of the audit report in this post.

As outlined in that post, we plan to have all future contracts audited before deployment, with our upcoming upgrades scheduled for audits with both Dedaub and Consensys Audits.

Response to recent extreme gas prices

With each next market crash, we keep reaching higher gas prices needed to get any transactions processed during the duration of the crash.

Unfortunately, this means that Automation becomes less efficient for any relatively smaller positions where the transaction costs could negatively impact it. While it’s hard to find a definitive position size below which transaction costs outweigh the benefits of Automation, please take into consideration that at 1,400 Gwei one single Repay transaction could cost $2,000 at current Ether prices.

As a response to these conditions, we have increased the minimum debt needed for automating a position to $40,000 for MakerDAO and $60,000 for Compound and Aave, which both have slightly more expensive transactions than Maker.

While we don’t see gas prices on L1 easing up soon, especially during market crashes, we have high hopes for the upcoming L2 networks and are closely following developments in that direction so that we can launch an L2 version of DeFi Saver as soon as that is possible.

February stats

As of February 28, there were 655 MakerDAO, 75 Compound and 27 Aave positions with Automation enabled — a total of 757 automated positions, an increase of 20 over January.

The total amount of managed collateral at the end of February was 241,850 ETH, 679 WBTC and 28 YFI, among other user collateralized assets, totaling over $380m of collateralized assets in automated positions.

The user activity at DeFi Saver in February remained extremely high, similar to what we’ve seen in January.

Overall, transactions made in February resulted in over $320m volume made in over 5800 unique transactions.

This puts the total volume from just two months of 2021 at over $790m, very close to a full billion in just two months.🤯

Community shoutouts

As always, you guys haven’t held back from sharing posts of appreciation, and we really like sharing some of those in our monthly posts.

Firstly, there was a number of Automation praise posts, for example this one from Ashleigh (ex-MakerDAO, now on team Uniswap):

Then there was one from our long-time user and discord member ReturnOfTheFax:

And finally, there was Joy who came up with this lovely meme:

We also tried running a short survey on Twitter for a user asking about experiences with Automation, and Simon had a very straightforward reply:

When Aave announced the addition of xSushi as a collateral option in Aave v2, Toast went ahead and shared a great idea for anyone aiming to go long on Sushi (something that can now be done in our Aave v2 dashboard):

There was also Aavenstein with a quick comment on the our UI design (though we have to add that it’s only getting better this year):

And, finally, there was Andrew who optimistically claimed that DFS Automation is driving this bull run (probably a consequence of following the @DeFiSaverBot account too closely):

We hope you’ve enjoyed this quick summary of February events and we’re looking forward to new releases that are inching closer, with audits kicking off now.

Stay tuned and talk soon!

Stay connected:
🌍: DeFiSaver.com
💬: Official Discord
📢: Official Twitter