📊Alternatives: Existing Asset Management Protocols

How to build scalable, reliable, and risk resistant primitives that automate top-tier asset management


Tokenizing foundational trading strategies into the necessary building blocks for efficient personal financial management. This goes beyond the affordability and flexibility of any specialized asset management framework.

Revolutionizing Access to Wealth Creation

DeFi's mission is to automate asset management in a trustless and permissionless way, democratizing access to wealth creation. Among its offerings, liquid staking and lending protocols stand out as the most successful by assets under management (AUM), capturing 75% of the total value locked (TVL) across all blockchain networks. Their appeal lies in their simplicity and the automatic, competitive yields they provide. However, the options for retail investors to access similar legitimate opportunities remain limited, with only a few tokens like staked Ethereum (stETH), USDe, and Aave tokens (a-Tokens) available.

With retail investor capital, currently representing 52% of global AUM (nearly $51 trillion), continuing to flow into the market, the need for 'smart money' that can automatically adjust to market risks and maximize yields is increasingly critical. This is vital for broadening access to global wealth creation. Considering there are over 8 billion people worldwide without access to a yield-bearing savings account, much less an investment portfolio, the pathway to widespread adoption is clear:

The most accessible money, offering the best yields and lowest risk, will be the most adopted.

A World of Dumb Assets

The need for everyone's money to work for them in the midst of global economic crises and uncertainty is existential. Before DeFi, only institutional investors and high net-worth individuals could access customized financial products and strategies. Everyone else is effectively playing with 'dumb assets' that cannot:

  • Self-regulate under the duress of changing market conditions.

  • Self-execute strategies that would otherwise inflate its value.

DeFi's Yield Sustainability Problem

Most yield-bearing tokens, such as stETH, or DeFi-native instruments, such as Uniswap LP positions, provide historically strong returns in contrast to the vast majority of TradFi instruments readily available for retail investors. But they introduce:

  • Impermanent loss and exposure risk associated with the base asset if it should go down in price (e.g., ETH for stETH).

  • Earning inflation-based yield (i.e., token emissions) that naturally lower the value of the asset over time.

  • Varying liquidity issues depending on the asset's overall market adoption across DEXs, CEXs, and blockchain networks.

  • Acquisition complexity that occasionally requires the asset holder to go through a series of steps to gain exposure to the asset at all (e.g., Uniswap LP positions).

  • Doesn't adjust to waning yield production due to market maturation (e.g., stETH cannot adjust its APY if ETH staking rewards or network fees decrease, it simply becomes less competitive).

Smart Money is Now Possible

How can we create self-sustaining assets that guard against market volatility, optimize yields, ensure strong liquidity, and make wealth creation tools universally accessible for the first time in human history?

Through the use of derivatives on ETH, BTC, and USDC collateral on deep and liquid centralized venues. Umoja aims to directly address both the sustainability and flexibility dilemma that previous yield-bearing tokens and asset management protocols have encountered, ushering a new era of smart assets.

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