How aggregators help on scaling DeFi

Transcript

hey guys uh munir founder of powerswap happy to be here i hope you had a good conference so far this is the last session of today so i imagine everyone is quite tired but we try to be fast this time so i'm to talk to you today about aggregation and how aggregators help on scaling defy i try to find a definition of what's an aggregation it's very contextual it means a lot of things uh depends on what are we talking about what category or industry are we talking about but i found this one to be quite generic uh it says the process of combining things or amount into a single group or turtle whatever that means but

in our context so like when we talk about aggregators in a technical term or a product term so those are services that aggregates data or other services in order to provide an added value for the end user that they could not get otherwise um but why are we talking about this and uh what are we here in the first place well i guess everyone from us uh wants to see mass adoption happening in crypto and i think we are in a very good timing where uh crypto has grown a lot for the last three years and i believe that aggregators help on pushing forward this growth that we're seeing in crypto and

will lead to the next vape of mass adoption and the next billion billion users um but also uh what are we trying to scale exactly so there are many things when we talk about scaling in crypto in general people think tps transactions per second but also there are other things that you should think about when you're talking about scaling so there is volume tvl like having more volumes being processed in on trading on deposits and withdrawals in in in crypto but here it's mostly about protocols so it's mostly defy nfts and whatever is happening on chain uh is it about users like having more users or user experience we've seen very few talks or

discussions about scaling user experience and i think that should be one of the most interesting ones that we should start thinking about as a community i also like to talk about web 2.0 when talking about aggregation because we have some very successful examples that happened the last 20 years or so so the pre search engines google or aol or yahoo or others people used to discover contents manually between codes so either through courage creation websites either through recommendations to friends and so on but once search engine emerged in google was the last vig of those who over performed uh well it created new possibilities that

didn't existed before uh it created also new industries that existed before like the seo industry didn't existed pre-search engine area so the value that a search engine or like a google has brought in is massive and it brought arguably more users it brought more traffic to the internet because simply some of the cases that didn't exist now exist thanks to the performance of those i would say products also when we talk people want to ask us what is paraswap the common example is airline ticket aggregators but you can also break down uh the different steps when booking airline tickets and that shows the

sophistication of the travel industry that went from just using a local agency that will play the aggregator to use in various services in a very specific context and also some of the services they cover different steps so when we travel we go to an inspiration phase where we want to know where are we going and what is the best place we should go to and there are various services that can help on that's like either a kayak google flights or a specialized website that will try to curate various various places so they play this aggregation role when we're doing a booking we go to a very specialized website that will give us the best deals either find the cheapest ticket or fame in maybe a package for a particular travel with hotels and so on we have

even preparations services that will try to cover the travel from end to end and help us optimize our services for instance if you're a professional you're using a tripit that's going to optimize every single step of your travel including delays in in airlines and so on uh you have uber and lyft and other services when you when you arrive so you don't need to hail the taxi you have google maps to know whether you should go by bike or by by a train or or a metro and the bus trip you still share your experience for other travelers and it becomes a virtuous cycle so before going to a trip you see whatever others have said about that trip so it makes you get a better inspiration that you would create with an aggregator and

so on and so forth so the value proposition of those aggregators is trending but also it started by what you call gds global distribution systems and those are like middlewares that allow um airline industries and train train companies sorry to connect with those aggregators among many other things so if i'm able to book my travel through kayak and able to find an optimal route it's mostly thanks to this middleware we have various ones but the biggest ones are amadeus and sabre funny thing about sabre it was created tens of years ago and evolved from a very old-school service to a quite a modern one so about aggregation in d5 what i guess

everyone knows i guess about dex aggregators but there are also lending borrowing aggregators we are services that optimizes liquidity uh farming yield optimization and so on so for the sake of time we're gonna focus on trading uh that's also we can show how we approach trading aggregation on powerswap so if you take that example uh here we have on the top those ui aggregators like the ones that are the user interface or help the user get the best trading experience or trading price and on the other side uh you have decentralized exchanges various ones we have now over 100 decentralized exchange but between both there are middlewares

similar to saber and and uh and amadeus and we run one of those it's called power swap that helps on this connectivity and helps on making some cases possible that's cannot be done manually as a user you can go to every single decentralized exchange but it's not going to be optimal in terms of time but it's not going to be possible to perform like a middleware or like an aggregator like powerswap but there are also other more complex use cases like for instance here with ave if you supply some wbtc and earning some api say two percents then you want to optimize your yield and your switching to maybe if that's making you

a higher api well you can do this yourself as a user withdraw the wbtc make a swap go for exchange for ether and deposit to ave not to talk about the time consumption of this but also if you have a collateral that is that's back backed by your wbtc and making this operation can make you subject to liquidation if you get very close to liquidation so by using a middleware like bioswap you it's going to take care of all those hidden details like you are close liquidation it's going to take care of your collateral take a flash loan in order to make it as far as possible from that risk and make the swap using the best possible rates and buy the the ether and deposit the if and get you this

all of this in one single transaction so that's also to highlight the high value proposition that comes like the added value of an aggregator but also aggregators contribute a lot in volume uh as we see here we just took the volume we made in june and compared it compared the volume that we processed like the inputs and the outputs versus the exported volume an example here if you're selling a token to another token say 100 eth to 100k die maybe the best route would be 100k 100 eth 200k 200k usdc 200k die parasol processed 100k die or usd in

general but if that trade goes to balancer balancer processed 200k so like double the amounts at the end the user get got what they wanted they got the best price the uh parasol provided that great service so we're happy but also those taxes got a higher amount so like a higher volume in uh the fees that come with it so every party is satisfied but what i wanted to highlight is that the volumes that is that are exported by by aggregator surpasses the volume that they process another example uh before we finish there is also some new things that can be done only by aggregators and it's very hard to do as a user uh manually

like uh what about buying an nft without having to uh to own the uh asset that the seller is asking for for instance you have a board ape you want to sell it and get eth well the other user maybe doesn't have eth but out of a click of a button they can use whatever token they have so it can be dye or ball or anything else so maybe they can use three tokens to buy the if and by the nft in a single transaction so that i think helps not only on volumes which is covered anyways but helps especially on uh scaling the user experience so that's the developers who are working on this and the end users who are using this don't have to worry about all this

complexity that is behind they just need to push a button and get their operation done as an uber versus a taxi where with a taxi you have to go physically inhale for the taxi where as an uber when it works you click on the button you push a button and you have your driver come in in few minutes so i think that's the value proposition of aggregators in scaling the user experience so i think that's we're definitely not solving the tps problem that's maybe for layer two so we can see them also as aggregators in a sense because they will aggregate various transactions and push them on a block especially the zika zika roll-ups but aggregates clearly bring help on scaling volumes.ttvl but volumes

as we clearly saw the difference between the process versus the exported volume and i think definitely on the user experience when we see some wallets using aggregators their the superiority of their user experience is much higher and as we saw with that example with nfts those are cases that cannot be done manually and aggregate just clearly bring this volume we think that's implicitly we help on increasing the number of users because if you get a great experience uh for uh necessarily there will be more users coming into crypto and into defy and i think this is the contribution that aggregates your spring well thank you happy to answer any question

[Applause] i guess everyone is getting ready for the parties so thank you guys thank you for listening to me have a great day [Applause]