DeFi Saver Makes High Crypto Yields Easier to Reach
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| By Marija Matic |
In TradFi, yield hunting is a rather conservative strategy. Low risk and low reward.
If you hold a U.S. Treasury bill, you can expect your APY to top out under 4%.1
Bonds give you a bit more — over 5%. But you’ll have to wait at least 20 years for it to reach maturity.2
Even the strongest money market accounts today only offer up to 4%.
But on the blockchain, things are different.
Decentralized finance (DeFi) has opened a world of new yield opportunities. And they flip the yield hunting game on its head.
On-chain, APYs can climb into the triple digits. The cost to target them, however, is two-fold.
First, the risks are higher.
Yields in DeFi vary. A lot. They’re dependent on network activity, the platform’s liquidity, the strength of the underlying asset and much more.
Which means you constantly have to monitor your positions and recalculate the risk/reward ratio.
Second, there’s a lot more work to hunt these yields. Beyond the babysitting mentioned above.
The process just to enter a position can have multiple steps. And some even require the use of several platforms.
This makes a lot of the yield opportunities tricky for anyone who isn’t familiar with moving funds around DeFi.
Fortunately, developers in the DeFi space are constantly at work.
Their goal is to make the platforms that dominate the market easier to access and use. Especially for the scores of potential users who are only familiar with TradFi’s approach.
Thanks to that diligence, an old tool just got new life. And it could revolutionize how you can hunt yield on the blockchain.
While it can’t erase all the hoops you’ll need to jump through, it can simplify them. Even better, it can automate some of the more critical position maintenance.
Introducing: DeFi Saver
DeFi Saver has been around since 2019, which is ancient by crypto standards. It started life as "CDP Saver," and the origin story tells you a lot about the team …
One of the founders was almost liquidated on a MakerDAO loan. So, they built a tool that would automatically adjust their position to prevent it.
That became the first automated leverage tool in DeFi.
Since then, it's grown into an all-in-one dashboard for managing positions. And it works across the major lending protocols and even some exchanges — Aave (AAVE, “C”), Hyperliquid (HYPE, “D”), Morpho (MORPHO, “D+”), Compound (COMP, “D+”), Spark (SPK, “D-”), Fluid (FLUID, “D-”) and more.
Along the way, it has handled over 800,000 transactions and more than $10.5 billion in volume, without ever launching a token.
In a market where plenty of projects stay alive on token handouts, that last bit is significant.
It means DeFi Saver built something DeFi pros actually use.
Here’s the part I care about most: It's non-custodial: As a true DeFi tool, your funds never sit with DeFi Saver. They stay in your own wallet and in the background protocols you're using. The app just sends the instructions.
You stay in control the whole way through.
What It Actually Does: An Example
One strategy DeFi yield hunters rely on is called “looping.”
The idea is simple: You deposit a crypto token that earns yield as collateral on a lending platform. Then, you borrow against it and use what you borrowed to buy more of that same asset.
Then, rinse and repeat. Each round stacks more yield on top.
Doing this by hand means many steps. A single looped position can take a dozen or more separate transactions — deposit, borrow, swap, deposit, borrow, swap.
Over and over.
It’s not just annoying and time consuming. It can also be costly. With every transaction, you pay gas and lose a little value to slippage. And you're exposed to price swings the entire way through.
DeFi Saver collapses that whole sequence into one transaction — what they call a "zap."4
Here’s an example: I found a weETH/ETH loop on Aave V4 that currently looks like the best risk-adjusted ETH yield on the market.
As you can see on Aave,5 there's no way to loop this position automatically. You'd have to build it by hand … one transaction at a time.
That includes …
- Swapping your ETH for weETH — EtherFi’s yield-earning version of staked ETH
- Depositing weETH
- Borrowing against it
- Converting borrowed funds into more weETH
- Depositing again.
Five steps for just one loop. You can see how quick the steps can add up.
On DeFi Saver,6 however, you just set the number of loops with a slider. Then, the whole thing runs in a single transaction — approving your ETH, converting it to weETH, and creating the leveraged position all at once.
That means you don't even need to start with weETH. You can hold plain ETH in your wallet and start from there.
Better still, it's all-or-nothing — either every step completes or none do. You're never left stranded with a half-built position. And you pay gas once instead of twelve times.
Another key note: The opportunities on DeFi Saver are usually blue-chip. That is, they’re well risk-adjusted, and sometimes offer lower-APYs as a result.
But there's still plenty that's interesting. And it's a popular place to park idle crypto and put it to work.
Because the zap is just the start.
The Feature That Makes DeFi Saver Worth Knowing
The benefit that actually sets DeFi Saver apart is automation.
Once a leveraged position is open, you can set your own rules for it. Then, DeFi Saver's bots watch your position around the clock. And it’ll act the instant those rules are hit.
If the market turns against you and your position starts to drift toward liquidation, it can automatically trim your leverage to pull you back to safety.
Even while you’re sound asleep at 3 a.m.
For most users, that safety net is the real reason to learn to use and reach for a tool like this. It’s the difference between a leveraged position you have to babysit … and one that looks after itself.
A few other things worth knowing:
- The contracts have been audited by ConsenSys Diligence and Dedaub,7 with a bug bounty running on Immunefi8 since 2021.
- You can move a loan from one protocol9 to another in a single step.
- And if you just want to look around first, there's a simulation mode10 that lets you test everything with fake ETH before you commit with real money.
Bottom Line
I’ll be perfectly clear: DeFi Saver isn’t a magic wand.
There are still a lot of variables that potential DeFi yield hunters need to monitor if they want to target the best on-chain yield opportunities without taking on unnecessary risk.
Especially with some of the looping strategies DeFi Saver offers. One rule worth carrying with you if you ever run a loop like this: risk and reward compound at the same rate.
That means you get higher yields the more times you loop. But that comes with a thinner safety cushion.
That’s why I never recommend you loop to the max.
Still, DeFi Saver is an incredibly impressive tool.
One that takes DeFi’s truly outsized APYs from “pie-in-the-sky” opportunities … to within reach for a whole new community of yield hunters.
Best,
Marija Matić
P.S. Each month, my colleague Juan Villaverde publishes his Weiss Crypto Investor newsletter. In it, he uses his Crypto Timing Model to help members outperform the market using a long-term investment strategy.
But that’s not all. In each issue, I also highlight key DeFi developments, yield opportunities and tips to help keep you safe on the blockchain.
To see my latest column — and to learn how your portfolio can benefit from Juan’s Crypto Timing Model — click here.
2https://www.treasurydirect.gov/marketable-securities/treasury-bonds/
3https://www.bankrate.com/banking/money-market/rates/
4https://help.defisaver.com/features/trending-zaps
6https://app.defisaver.com/quick-start?zap=aave-v4-etherfi-incentive
7https://docs.defisaver.com/protocol/security-and-audits
8https://immunefi.com/bug-bounty/defisaver/information/
