DeFi Saver Newsletter Issue #41: Trailing stops on L1, Aave v3 Automation on L2s, the Merge & more
Welcome to the DeFi Saver Newsletter. This time we are covering: Trailing stops on L1, Aave v3 Automation on L2s, the Merge & more...
Welcome to our latest monthly recap post, covering recent updates, stats and important ecosystem happenings!
Before we get to our most recent updates, we need to touch on the Merge, which is an incredibly important event in the Ethereum world happening in less than 12h.
But what is it and is there anything you need to do about it?
The Merge is a long awaited Ethereum update that replaces the current Proof-of-Work consensus layer with Proof-of-Stake. The update process will connect the current execution layer with the staking Beacon chain that's been running for almost two full years now, since December 2020, and hence the widely used name the Merge. While this specific update doesn't affect performance or capacity of Ethereum, it does reduce its energy consumption by more than 99% and completes one of the major development milestones.
As a user, there's absolutely nothing you need to do and this update should be as seamless as any previous one, such as London and Berlin in 2021. In fact, doing nothing in regards to the Merge is encouraged, as there have been announced forks that intend to keep running on PoW (and building on top of the Ethereum mainnet state created up until the Merge), but they are currently not confidence inspiring, to say the least. In general, we'd recommend ignoring these and have to highlight that we have no plans to support any such PoW fork. We have always been a team aligned with Ethereum values and roadmap and we're very excited for the Merge.
In case you have any concerns or questions about any of this, please find us in the DeFi Saver discord.
But now - to the updates!
DeFi Saver news and updates
Last month has been all about automated strategies for us and we've had major releases on both L1 and L2s.
Trailing stop for MakerDAO and Liquity
In terms of mainnet updates, we've rolled out what is our most interesting automated feature so far - a trailing stop, for both MakerDAO Vaults and Liquity Troves.
A trailing stop is a dynamic option for closing your position that lets you gradually lock in profits as the market keeps moving up, every time it reaches a new peak. This newsletter isn't the best place to go too deep into details, though, so we recommend checking out the thread below and our release blog post - we promise it's worth your time.
We also really have to say we're pretty proud of this one, as DeFi Saver has always been popular as a trading tool and we are very happy to be enabling an increasingly better experience for traders.
With the trailing stop now live on the mainnet, our next goal is to release the same feature for Aave v3 on both Arbitrum and Optimism - look out for that in the next few weeks!
Aave v3 Automation on Arbitrum
Speaking of L2s, we've also released our automated leverage management features for Aave v3 on Arbitrum, after our previous Optimism release in July.
These are the same automation options that DeFi Saver was known for in the past years, including auto-repay that automatically unwinds your position if it gets too risky, as well as (optional) auto-boost that automatically leverages more and can be beneficial during periods of sustained market movements in one direction.
Like we mentioned earlier, this is just another update in our constant effort to provide the best possible L2 experience in DeFi, and you can expect to see more automated strategies coming to Aave v3 on both Arbitrum and Optimism, including stop loss, take profit and our new trailing stop options.
Arbitrum Nitro update
Right at the end of the month, the Arbitrum team performed a scheduled update to Arbitrum One, finally introducing Nitro for all users.
The update procedure, during which the network was paused, took a few hours, but ultimately went smoothly.
As mentioned in our tweet, DeFi Saver users on Arbitrum will have likely noticed that everything has been running a bit smoother, with quicker dashboards loading, ever so slightly faster transaction processing and in some cases noticeably lower transaction fees.
Overall, we love to see L2 networks constantly growing and maturing and we're looking forward to future improvements, too.
Compound cETH market incident
Another event that took place at the end of last month was the unfortunate Compound v2 cETH market incident that was caused by a faulty oracle update introduced with proposal #117.
Once the proposal was executed, we quickly noticed the newly introduced issue in our Compound Automation logs and got in touch with the Compound dev team to confirm things, before also alerting our users.
The incident had really unfortunate timing and briefly took over the spotlight from the Compound III launch that happened just days earlier (and that you can expect to see in DeFi Saver very soon!), but, luckily enough, the ETH market price was at basically the same level once the oracle issue was resolved.
Things fully returned to normal on September 7th once the previous change was reverted with proposal #119.
On L1, DeFi Saver users made $85M of trade volume during August, with over 1,760 unique position management transactions and custom recipes. On the other hand, volume on L2s is still just a fraction of that, with some $400k in trade volume and over 4,700txs done on Arbitrum and $4.2M in volume and over 2,500txs done on Optimism.
While the average position size and swap amount on L2s is obviously drastically smaller, that was actually exactly the goal and we're stoked to be making DeFi Saver accessible to a much broader audience with layer 2 networks and we're looking forward to growing with the L2 ecosystem.
In terms of DFS Automation, there was a total of 301 unique positions automated at the end of August - 256 on the mainnet, 18 on Arbitrum and 31 on Optimism, across MakerDAO, Compound v2, Aave v2, Liquity and Aave v3.🤖
Again, while usage of our automated strategies on L1 has been somewhat stagnant for the last few months, we're thrilled to see this quick adoption of our just recently launched L2 automation features.
In total, there was over $180M in automated collateral on L1, while this number on Arbitrum and Optimism was at $25kk and $1M, respectively.
Community coverage & shoutouts
Each month we try to highlight some of the coolest posts talking about DeFi Saver out there, so let's take a look at some of our favourites from August.
First, there was this lovely thread from Liquity's Brice explaining how converting a Maker Vault into a Liquity trove using DeFi Saver works:
Second, a certain Diego had many nice words to share about DeFi Saver and, probably more interestingly, he was one of the first people to actively share info about $OP incentives on Aave v3 on Optimism and how users can maximize their rewards, so maybe consider giving him a follow (especially if Spanish is your mother tongue):
Moreover, there was also this great post on reddit (found in r/ethfinance, of course) from a person sharing their experience with using DeFi Saver on Optimism:
Finally, we have to share this tweet from someone who recently learned about our automated leverage management features:
This is all we had in store for this issue of the DFS newsletter, we hope everyone has a blast celebrating the Merge and we'll see you soon with more news!
💬: Official Discord
📢: Official Twitter
🗣️: DeFi Saver Forum