Apollo’s Alpha: Hunting for Crypto Profits? Astrolab is on a mission to simplify it AND scale it across chains
David Angliss, analyst at Australia’s leading cryptocurrency investment firm, Capital of Apolloshares the Fund’s common sense of what is happening in the rapidly changing and volatile cryptocurrency space.
This week David Angliss talks crypto-yield aggregation with Stockhead. Specifically, the “omnichain” yet simplistic, lower-risk-return aggregation that French-founded Astrolab aims to offer.
Let’s dive in.
Building a bridge over the risk gap
When describing Astrolab to us, Angliss first referred to Yearn.Finance (YFI), which emerged in 2020 as a major DeFi player offering crypto revenue optimization through staking and aggregating lending and trading services.
Yearn brought return aggregation and optimization to the forefront of the crypto space and proved immensely popular and successful amid the recent DeFi-led bull run.
Astrolab, says the Apollo analyst, can be considered a “crypto yield aggregator 2.0” project.
One of the things that immediately sets Astrolab apart from the likes of Yearn and other yield aggregation projects, such as Beefy Finance, is that it is “omni” blockchain-focused. It aggregates across Ethereum and a wider range of EVM (Ethereum-compatible) chains than its competitors, and currently 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 returns in DeFi, but they essentially have single-chain vault capabilities. Astrolab removes the pain point of network switching and risky bridging across chains. A relevant point, considering the big Binance bridge hack late last week.
“It completely eliminates having to constantly bridge your funds to different chains depending on the return opportunity,” notes Angliss.
One-click technology
And how does it do this?
“It leverages 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, send, deposit and start breeders with one click in a gas transaction,” the analyst continues.
“Previous bridging technology required many more transactions and approvals to get your money from one blockchain to another. By using LayerZero, Astrolab significantly reduces the number of clicks, time spent and the amount of gas consumption used.
“The Astrolab vaults are essentially multi-chain return-bearing vaults. You put your money into them, and Astrolab will identify the best risk-adjusted return opportunities across chains. So in one vault, for example, you could end up with 40% of those funds as earn from an Ethereum DeFi vault, and maybe 20% each from those at Polygon, Optimism and Arbitrum.”
Crypto return aggregators are obviously protocols that can thrive in the midst of frothy, bull market periods of high activity and interest, but according to Angliss, there are still plenty of “crop farmers” out there.
“And there are still protocols that need bootstrapping for liquidity – there’s still demand for both the crop farmers and the protocols. Not as much as 12 months ago, granted, but it’s still there.”
Astrolab’s Bull Task
The Apollo analyst helped us point out the benefits and positive case for Astrolabs like this:
• It will be one of the first true cross-chain crypto return aggregators on the market.
• It has a very strong technical team.
• As the first generation of return aggregators (Yearn, Beefy), Astrolab provides the opportunity to earn some of the best returns in DeFi.
• It sends your money on compatible chains to the best pools available, saving you time and money.
• It makes yield aggregation and optimization efficient and super easy to use via LayerZero technology.
• 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 cross-chain bridge superior to first-generation bridges, and transfer funds with one click. Stargate has yet to be exploited/hacked and Astrolabs uses similar technology.
One last thing… token? Will it be an Astrolab token, along the lines of Yearn.Finance’s YFI and Beefy.Finance’s BIFI?
“Definitely”, said Angliss, but when it specifically launches in the market is something we have to keep an eye on the protocol’s official channels.
Crypto activity ‘booming’: Apollo Capital CIO
Apollo Capital recently attended one of the world’s leading crypto conferences, Token2049, which is held annually in Singapore and London.
The Singapore event took place on 28-29 September (London’s event will take place on November 9-10), and as Apollo Chief Investment Officer Henrik Andersson writes in a detailed summary, crypto activity appears to be “booming, despite the current bear market”.
And reflecting that, the event itself was the largest to date, 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 received a lot of activity,” Andersson noted. “The DeFi projects, while still present at the conference, could be something of a contrarian bet in this current market,” he added.
“Many young developers are focused on building out NFT Financialization, we believe the underlying narrative will drive high growth valuations in the next upcycle.”
Highlights of Token2049 Singapore 2022
You can read Apollo’s full learnings and perspective from the event above, but if you’re a bullet point fan and want the quick package, Apollo sums it all up as well:
- It is clear that there is still a lot of “money on the sidelines” to be deployed in the coming year.
- Retail interest in crypto remains very strong.
- Good builders continue to ship products despite a difficult market.
- Singapore remains unplaced as a hub in the Asia region for crypto.
Note: none of the views expressed in this article should be taken as financial advice.
