FujiDAO now aggregates Rari Fuse pools
W
ith the goal of optimizing the costs for borrowers and improving capital efficiency, we found that a dedicated engine of aggregation for Rari Fuse was interesting.
Fuse lets its users create lending/borrowing pools, thus leading to frequent APR variances across Fuse pools for the same assets. We then made a proposal that got approved by Rari governance at the beginning of July, results are available here.
What it brings
We’re happy to announce that the integration is currently live and running for ETH/FEI and ETH/USDC pairs. By aggregating 4 Fuse pools for each pair and actively managing funds, FujiDAO brings borrowers the following advantages:
—🎉 Reduce borrowing interest rate,
by refinancing across Fuse pools,
— —🥳 Lower operational costs,
by pooling users funds together,
— — — 🎊 Save your time,
by automating operations.
Backstage overview
To obtain the best terms for borrowers, FujiDAO operates two main functions, Routing and Refinancing, let’s understand both:
— Routing:
This is the first step that happens when you use FujiDAO, it allows you to borrow from the Fuse pool with the lowest rate, let’s see how it works:
- The Vault contract has a pointer that defines what fuse pool has the lowest APR for ETH/FEI$
- Rates are monitored off-chain, and if there is a better rate, the pointer in the vault contract is changed to that specific Fuse pool.
— Refinancing:
After routing, FujiDAO will continuously optimize your costs by moving your loans from one Fuse pool to another, making sure it gets the best terms for a specific asset. Let’s see how it works with an example:
- The active provider for ETH/FEI is still “Fuse pool A”, but time passed and rates changed because of their floating nature
- The off-chain script fetches again the different Fuse pools APR and compares them looking for potential refinancing opportunities
- Now that an opportunity is found, it operates a refinancing operation from “Fuse pool A” to “Fuse pool B”:
⚡️ FujiDAO takes a FEI flashloan
Repays the FEI debt in “Fuse pool A” by using flashloan
Withdraws the collateral from “Fuse pool A”
Deposits the collateral in “Fuse pool B”
Borrows FEI from “Fuse pool B”
⚡️ FujiDAO repays the FEI flashloan
Once the refinancing operation ends, the provider for ETH/FEI changes to “Fuse pool B” and now users get the most advantageous rate.
Here is the result of the previous operations, by routing and refinancing, FujiDAO optimizes the APR for the borrowers.
Final words
The integration with Rari Fuse is our first protocol-to-protocol approach and we’re excited to get your feedback on it. Considering the need for costs optimization and capital efficiency in the entire DeFi space, we will continue integrating other markets.
We have been live testing the aggregator for the past weeks and several refinancing operations happened, successfully reducing the APR.
📕 Please DYOR before interacting with FujiDAO or any other DeFi protocols. — Learn more about FujiDAO and Rari Fuse by reading the docs.
Follow Rari Capital and FujiDAO and join us on Discord, we are looking forward to hearing your feedback and suggestions!🎉
