Apollo’s Alpha: Chasing crypto yield? Astrolab is on a mission to simplify it AND expand it cross chain
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David Angliss, an analyst with Australia’s leading cryptocurrency investment firm, Apollo Capital, shares the fund’s regular take on what’s happening in the fast-changing and volatile cryptocurrency space.
This week, David Angliss talks crypto-yield aggregation with Stockhead. Specifically, the “omnichain” yet simplified, lower-risk yield aggregation that the French-founded Astrolab aims to provide.
Let’s dive in.
When describing Astrolab to us, Angliss first referenced Yearn.Finance (YFI), which emerged in 2020 as a major DeFi player providing optimisation of crypto earnings through staking and aggregation of lending and trading services.
Yearn brought yield aggregation and optimisation to the fore in the crypto space and proved immensely popular and successful amid the last DeFi-led bull run.
Astrolab, the Apollo analyst says, can be considered a “crypto yield aggregator 2.0” project.
Part of what immediately sets Astrolab apart from the likes of Yearn and other yield-aggregation projects, such as Beefy Finance, is that it’s “omni” blockchain-focused. It aggregates across Ethereum and a wider range of EVM (Ethereum-compatible) chains than its competition and, at present, these include Polygon, Avalanche, Binance Chain, Fantom, Arbitrum and Optimism.
Like Astrolab, existing competitors aggregate from various projects and chains to provide some of the highest yields in DeFi, however they essentially have single-chain vault capabilities. Astrolab removes the pain point of network switching and risky, cross-chain bridging. A topical point, considering the large Binance bridge hack late last week.
“It completely eliminates you having to constantly bridge your funds to different chains, depending on the yield opportunity,” notes Angliss.
And how does it do this?
“It’s leveraging a new technology called LayerZero, which is a new omnichain interoperability protocol that helps Astrolab set up DeFi vaults (which Astrolab calls ‘Crates’) that users can deposit crypto into with one click.
“What LayerZero actually enables on Astrolab is the ability to send, deposit and start farming funds with one click in one gas transaction,” the analyst continues.
“Previous bridging technology has required a lot more transactions and approvals to get your funds from one blockchain to another. Using LayerZero, Astrolab significantly reduces the amount of clicks, time spent and amount of gas expenditure used.
“The Astrolab crates are essentially multichain yield-bearing vaults. You deposit your funds into them and Astrolab will identify the best risk-adjusted yield-bering opportunities cross chain. So, in the one crate, effectively, you might end up with, for example, 40% of those funds earning yield from an Ethereum DeFi vault, and maybe 20% each from ones on Polygon, Optimism and Arbitrum.”
Crypto yield aggregators are obviously protocols that can thrive amid frothy, bull-market periods of high activity and interest, but, according to Angliss there are still plenty of “yield farmers” out there.
“And there are still protocols that need bootstrapping for liquidity – there’s still demand for both the yield farmers and the protocols. Not as much as 12 months, ago, granted, but it’s still there.”
The Apollo analyst helped us bullet point the benefits and bullish case for Astrolabs like this:
• It will be one of the first, true cross-chain crypto-yield aggregators to market.
• It has a very strong, technical team.
• Like the first generation of yield aggregators, (Yearn, Beefy), Astrolab provides the opportunity to earn some of the best yields in DeFi.
• It routes your funds on compatible chains to the best pools available, saving you time and money.
• It makes yield aggregation and optimisation efficient and super easy to use via the LayerZero tech.
• One-click technology – no more bridging, network switching, and complex bookkeeping across different blockchains.
• It operates with lower risk for the user. To illustrate that point, Stargate – a program built with LayerZero – was able to create a superior cross-chain bridge than first-generation bridges, transferring funds with one click. Stargate has yet to be exploited/hacked, and Astrolabs is using similar tech.
One last thing… token? Will there be an Astrolab token, along the lines of Yearn.Finance’s YFI and Beefy.Finance’s BIFI?
“Definitely”, said Angliss, however when that specifically launches onto the market is something we’ll have to keep an eye out for on the protocol’s official channels.
Apollo Capital recently attended one of the world’s leading crypto conferences, Token2049, which is held annually in Singapore and London.
The Singaporean event occurred on September 28-29 (London’s event will occur on November 9-10), and, as Apollo Chief Investment Officer Henrik Andersson writes in a detailed summary, crypto activity appears to be “flourishing, despite the current bear market”.
And reflecting that, the event itself was the biggest it’s been yet, with more than 7,000 attendees and 2,000+ industry entities including entrepreneurs, investors, and developers.
“It is clear that the Gaming/NFT space had a large representation and has gained a lot of activity,” noted Andersson. “The DeFi projects, even though still present at the conference, could be somewhat of a contrarian bet in this current market,” he added.
“Many young developers are focused on building out NFT Financialisation, we think the underlying narrative will drive high growth valuations in the next up-cycle.”
You can read Apollo’s full learnings and perspective from the event above, but if you’re a fan of bullet points and want the quick take, Apollo summarises it all, too:
Note: none of the views expressed in this article should be taken as financial advice.