Vespertine Capital
4 min readFeb 26, 2022

Proteus Finance — Helping you maximize your DeFi yields using the best protocols on Terra

Source: Proteus Finance Website

As we’ve shared previously, it is a known fact that the DeFi market is growing rapidly. A recent report by Nansen estimated that the growth of the market in 2021 compared to 2020 was 1,120% in Total Value Locked (TVL). DeFi has definitely taken the crypto world by storm, disrupting the previously closed world of traditional banking and high yield investments to the everyday man on the street.

According to Proteus Finance, there are three main functions that are at the heart of the DeFi ecosystem:

  • Automated protocols for trading, lending, and investing
  • Stablecoins to facilitate fund transfers and reduce the volatility usually associated with cryptocurrencies
  • Composability — the potential for one protocol to build on another, like Lego blocks in a structure

DeFi protocols have a simple formula: Instead of having buyers and sellers on either side of an order book, lenders provide pools of funds, and smart contracts manage loans and trades. Lenders then get to earn interest and fees (yields) on their invested funds in the pools. Yield farming and liquidity pools are ways to put your crypto to work rather than simply holding it in a wallet and waiting for the price to go up. The annual percentage yields (APY) can run into hundreds of percent compared to the single digits of traditional systems.

However, with any form of investment, there are risks associated with DeFi, such as the uncertainty associated with any new DeFi platforms. In the crypto world, high risks are often associated with high rewards but that doesn’t preclude us from scam projects and rug pulls. We have all definitely encountered or heard our fair share of projects disappearing with all our hard-earned funds, leaving investors empty-handed at the end of the day.

There are also other risks such as impermanent loss, which is when your assets lose value while they are being locked in a liquidity pool. In other cases, DeFi projects may pay your yield or rewards in the project’s tokens, which may lose its value or worse still, collapse in price with any small mis-step.

Therefore, the biggest drawback to wider adoption of DeFi is that it is extremely complicated, just based on the reasons given above. As such, Proteus Finance is on a mission to help make complex DeFi investments as easy and as accessible as possible for everyone.

Based on the Terra ecosystem, Proteus will help you analyze the different protocols on Terra and find the most profitable one. It will use its algorithm to manage risk by distributing your investments into different strategies and also aggregate the best DeFi strategies available for you. All you need to do is to buy or deposit your stablecoin and send it to your Proteus wallet, and the app will do the work for you.

There are also other components in place to ensure that you do not lose your hard earned money. There is an insurance component which will protect you from permanent loss by providing an ‘insurance pool’ which serves to repay investors should they experience any loss. The mission of Proteus Finance is to deliver what other apps promised and make sure that you don’t get rekt by investing in DeFi. In this regard, they aim to connect to the best protocols on Terra that will give you +100% yield and provide a debit card for you to easily off-ramp.

Source: Proteus Finance Website

Proteus will also have other DeFi features such as using the Proteus token to serve as collateral while you take a loan from them. The token will have a wide range of uses, whereby you can stake to generate additional yield by locking up your tokens for a specific amount of time.

Depending on how many Proteus tokens you hold, you will fall into a tier as part of their tier system. The higher your tier, the better your benefits. According to their road map, their token will be launched in Q1 2022, whereby they will also announce their tier structure, where early adopters will be rewarded.

If you are interested in using Proteus to maximize your yields with the best protocols on Terra, you should definitely check out their official channels below and keep yourself updated on their very latest!

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