Merged Finance. Competitors comparison.
Merged Finance is a multi-chain protocol that allows users to invest in crypto indexes in just a few clicks and get a diversified, rebalanced portfolio, designed by the industry experts.
Each portfolio is represented as a single token that is fully collateralized with various underlying assets: Utility, Governance, LP tokens, and Vaults.
Merged Finance was developed as a reliable and intelligent investment solution that would provide users with a single entry point to the array of expert-built and genuinely diversified indexes. The protocol is equipped with the most advanced and demanded built-in DeFi tools and in comparison with the existing crypto indexes investment platforms, allows users the more straightforward solution which brings higher returns on their investment.
Investing in indexes allows to get a bundle of different tokens in one go, and the number for more solutions keeps increasing. There are many similar platforms on the market, most of them are currently at the early stage of emerging. As the crypto Indexes industry is expanding rapidly, there is substantial demand for a robust, secure, and easily accessible product.
In this article, we’ll go over the main benefits of the Merged Finance protocol, the value for the users of our product, and compare the essential features with the similar solutions presented on the market.
Merged Finance vs. Competitors
Smart rebalancing system
The existing investment solutions require constant focus from users, as there are certain shortcomings to the process of portfolio rebalancing. Most competitors work by performing manual portfolio rebalancing once a month, meaning that for the most time the portfolios are imbalanced. This issue creates a potentially negative effect for the investor, leading to a potential profit loss, for instance, caused by the lack of diversification.
Monthly manual rebalancing also involves slippage: the slippage occurs during every rebalancing and is caused by the volume of concurrent exchanges. This problem especially affects DEX trading and, in general, leads to higher slippage costs.
Some of the competitors also use Balancer pools for index creation, managing, and rebalancing portfolios. This operating scenario potentially leaves users dissatisfied with their experience as it leads to impermanent loss due to arbitrage. The arbitrageurs take away almost all the profits generated by the assets in the pools.
One of the major benefits of the Merged Finance protocol is the automated Smart Rebalancing System, which allows maintaining the user’s portfolio regularly balanced. By rebalancing each index at every minting/burning event, Merged Finance minimizes gas fees, additional rebalancing swaps, and the higher transaction frequency minimize the potential slippage.
A multi-chain protocol
Similar investment platforms are usually limited by the number of integrated chains, and most of the competitors are operating on the Ethereum Network, which is known for its substantial gas fees.
Merged Finance is going to get started with integrating Binance Smart Chain, and subsequently will integrate such mass-adopted chains as Polygon, Avalanche, Ethereum, as well as implement L2 and developing chains such as Optimistic and Arbitrum. The Moonbeam Network — the only Polkadot parachain that has a full Ethereum compatibility, will be also implemented; thus, the capacity of Merged Finance and a considerable number of integrated Blockchain Networks will grant users a variety of alternatives and allow them to access and acquire any token.
The Built-in Staking module
While the features mentioned above illustrate Merged Finance as a more sophisticated and robust investment solution compared to what similar solutions have to offer their users, a properly functioning (underlying asset) staking feature is not yet made available on the market, types of assets available for staking are limited. The overall staking and auto-compounding modules are currently under-represented in the competitors’ DeFi investment products.
Each Merged Finance index is represented by multiple asset types, enabling a full portfolio diversification. The built-in Staking Module of Merged Finance will automatically stake underlying assets, included in the index.
The Merged Staking module works for every asset type: Utility, Government, and LP tokens, Synthetics, and also for Vaults.
Our Staking Module allows users to generate additional yield and automatically compounds the profit, increasing and multiplying the total profit of the investors.
Fast and simple onboarding
One of the most essential issues of the DeFi investment products is that they’re too complex to fully grasp the user flow and investing mechanics and strategy, especially for the crypto newcomers.
When it comes to investing, building a lucrative portfolio requires thorough research, selection, and buying every single asset. As the project fundamentals and concepts are often not easy to comprehend, an aspiring investor has to spend dozens of hours before finding something worthwhile and promising.
The indexes make the investment easier for users, however, the onboarding process for most index investment solutions is not always clear, and issuing, minting, and burning an index is too complex for new users.
Some complex DeFi tools — such as underlying assets staking — are almost inaccessible for beginners at all.
In line with our goal of building a complete and secure product, we’ve improved the existing UX design to make our solution comprehensible and accessible for users with any experience.
In closing
Our team is getting closer to the final stages of product development, and soon we will open the waitlist to put its most essential features to the test. We’re looking forward to getting the feedback on the MVP and aiming to release the final version of Merged Finance in the Q1 of 2022. Although the initial idea of creating the DeFi protocol emerged on the roadmap nearly a year ago, our continuous market research indicates a high current potential and demand for a comprehensive investment product.
The number of crypto newcomers has significantly increased during the last year and the indexes niche is beginning to take root in the crypto community, currently occupying only a 0.4% share. Our highly conservative projections show that the indexes can take up 10% of the whole crypto investment market by 2025.
And Merged Finance protocol has great prospects of becoming a groundbreaking product, by offering a powerful, secure investing solution, accessible for users of any level of experience.
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