Instadapp: The Ultimate Aggregator in DeFi

Original Title: 《Instadapp: The Ultimate Aggregation Layer in DeFi》

Author: VIKTOR DEFI

Compiled by: 深潮 TechFlow

The internet we use today is different from the internet of the 1990s. Back then, finding content on the web was challenging until Google solved the content discovery problem with its aggregator.

Now, we are witnessing the rise of aggregator platforms worth billions of dollars that address significant issues on the internet. For example, Amazon is used to find items, Facebook to find people, Google to find content, and so on.

To drive the blockchain industry forward, key aggregation platforms are needed to solve users' discovery challenges. This is where Instadapp comes in. Instadapp aims to become the ultimate aggregation layer in DeFi by aggregating various DeFi protocols.

Instadapp is one of the leading protocols in DeFi, easily surpassing others by timely launching products needed by the industry. Want to learn more? Let’s dive in.

What is Instadapp

Instadapp is a middleware protocol that simplifies and unifies the DeFi front end. Like the Web2 aggregators mentioned earlier, Instadapp consolidates the best DeFi platforms into one, allowing users easy access and a unified experience. The platform currently integrates eight protocols: MakerDAO, Liquity, Morpho, Aave, Compound, Lido, Uniswap, and Hop Protocol.

Users do not need to switch between various protocols; they can complete all operations with just a few clicks. The best part is that Instadapp is already live on Ethereum, Polygon, Arbitrum, Avalanche, Optimism, Fantom, and Base, helping users maximize their time and costs on-chain.

The Technology Behind Instadapp

Instadapp utilizes a new technology called DeFi Smart Accounts (DSA) to provide users with greater flexibility and accessibility. A DSA is a user-controlled smart contract that allows them to execute multiple operations in a single blockchain transaction. You can think of a DSA as a sub-account for users on Instadapp, enabling them to manage positions and interact with DeFi protocols in a trustless manner.

These DSAs are generated using regular Ethereum accounts. You simply connect your Ethereum wallet to Instadapp Pro to create your DSA account; instantly, you can access the multiverse of DeFi. Interestingly, it allows users to create an unlimited number of accounts in a trustless manner. Additionally, users can withdraw funds back to their Ethereum wallets at any time with zero restrictions.

Another incredible aspect of DSAs is that connectors can extend them. Connectors enable developers to build more functionalities, operations, and use cases on top of DSAs. For example, connectors can take various forms, from protocol to authentication connectors.

With Instadapp's unified experience, users can perform the following:

Multi-Protocol Refinancing

Lending is one of the primary use cases of decentralized finance. Users utilize multiple lending protocols that suit their strategies to open and finance debt positions. Instadapp's multi-protocol refinancing feature allows users to migrate positions and refinance among top lending protocols with just a few clicks.

Cross-Chain Bridges

The existence of blockchain bridges is to transfer crypto assets from one network to another. With Instadapp, users can easily withdraw funds from their DSA accounts to another network, saving on gas fees and time.

Sweep Swap

We all have those tokens in our wallets that we either don’t use or are tired of holding. You can use Instadapp's sweep swap feature to exchange these tokens for a single token.

Protection Automation

Automation is disrupting every industry, and DeFi is no exception. The protection automation feature allows users to automatically repay debts amid market uncertainty. Each automated event incurs a small fee of only 0.3% to 0.4%.

Flash Loan Aggregator

Instadapp's flash loan aggregator utilizes advanced routing mechanisms to discover the best flash loan rates among major providers like Aave, MakerDAO, Balancer, Compound, and more. It launches with seven routes, providing users with broader liquidity and token choices at lower costs.

And that's not all; Instadapp also manages a flash loan pool that serves as a funding source for the aggregator. This makes the aggregator a competitive and cost-effective flash loan platform. Since its launch, Instadapp's flash loan aggregator has maintained steady growth in revenue.

Instadapp Lite

Instadapp Lite is a powerful feature of the Instadapp platform for DeFi yield. It scans multiple lending platforms to find the best strategies and annualized yields for users, and they can access all these features with just one click. Accessibility and simplicity are the core characteristics of Instadapp Lite.

Earlier this year, the team launched Lite v2 and introduced a vault that only supports ETH. With the rise of liquid staking, this vault is strategic and timely. The vault supports Aave v2, Compound's ETH market, Morpho, and Aave v3, and has locked in over $311 million in value.

ETH Lite Vaults on Idle Finance

Yield automation protocol Idle Finance recently announced integration with Lite Vaults. First, Idle Finance utilizes a tiered system to provide Lite Vault users with more personalized risk strategies and options. Second, it offers two choices for new and existing users to earn real yields based on their risk thresholds.

The advanced tier is slightly below the standard Lite Vault and features a customized loss protection mechanism, while the primary tier covers the advanced tier by increasing the annualized yield. Individuals and institutions needing an extra layer of protection for their assets may prefer the advanced tier, while users with higher risk tolerance may favor the primary tier.

Avocado

Avocado is Instadapp's latest innovative product, leading the development of account abstraction. If you have been a DeFi user for a while, you may be accustomed to connecting your wallet to dapps, switching networks, using the native tokens of the networks to pay gas fees, and adding new chains via Chainlist to interact on new chains.

But Avocado changes all that. It is an innovative smart contract wallet that allows users to perform multi-network transactions using the Avocado network. This eliminates the need to switch between different networks while saving on gas fees.

Avocado has its own RPC (Remote Procedure Call). Even so, it is not a blockchain. Avocado RPC is a network aggregator that searches for available broadcasters to process transactions on a given chain, as illustrated in the attached image. The best part of Avocado is its triple abstraction model: network abstraction, gas abstraction, and account abstraction.

Network abstraction ensures that all network balances are accessible on the dashboard, gas abstraction uses USDC as the native gas fee for transactions, and account abstraction is designed to provide higher modularity and open new use cases for the platform. With these features, Instadapp can easily become the leading abstraction and aggregation layer in DeFi.

The platform creates a native Avo wallet address for you once you connect to the Avocado RPC network. With this wallet address, you can perform all operations and enjoy the same level of security as your externally owned account (EOA) (like Metamask). The team has also hinted at some upcoming developments for Avocado, including 2FA security, balance unification, roles, DeFi strategies, and developer incentive programs.

Token Economics

$INST is the governance and utility token of Instadapp. Its maximum supply is 100 million INST, with a market cap of approximately $30 million. Of this, 55% is allocated to community members, 23.8% to team members, 12.1% to investors, and 7.9% to future teams and advisors.

The current price of $INST is $1.2, and I believe it is undervalued. Instadapp's TVL is $1.9 billion, and the token reached an all-time high of $24.40 during the last bull market. Considering Instadapp's recent and upcoming developments, it is easy to predict a higher increase in the next bull market.

Conclusion

As I mentioned earlier, we are witnessing the emergence of innovative blockchain aggregators. Like Google and Amazon, their goal is to act as intermediaries between DeFi protocols and users, attracting users and driving ecosystem growth.

My research indicates that Instadapp is relentlessly establishing itself as the ultimate aggregation layer in DeFi across different verticals. At this pace, it is only a matter of time before Instadapp achieves the same network effects as Web2 products.