Summer.Fi: Latest Integrations, Upgrades, And The Road Ahead

November 21, 2023

In conclusion

We’re in the fourth quarter; winter is coming, however, things are only just heating up for Summer.fi. We’ve touched on Summer.fi, simplifying what the protocol is about, its unique offering, and other details for you in our previous article, so feel free to revisit.

Summer.fi’s approach as a money market is in harmony with the widely shared consensus that embracing simplicity is essential for DeFi to broaden its appeal to those still entrenched in Traditional finance. This is exemplified by their dedication to capital efficiency and saving costs along with the user-friendly experience facilitated by automation, which they refer to as “Superpowers”, and other product functionalities.

Speaking about other product functionalities, today’s discourse follows up on the previously published introduction, shedding light on what’s new to Summer.fi and how these new updates add to the goal of the platform to be the go-to protocol to multiply your exposure to any asset of choice, generating the best yields you can find across DeFi.

https://www.youtube.com/watch?v=yVtHLFr46ok

What’s new? 

Two things can summarize Summer.fi— A simple front-end to access the best interest rates and yield opportunities in DeFi and the automated tools that protect users from losses, allaying their fears. As such, Summer.fi incorporates protocols under the hood such as Maker, Ajna, Aave, and SparkDAO. A new protocol is set to join the mix called Morpho Blue. However, before that, there’s an interesting update.  

Aave and Spark users will soon enjoy Summer.fi features by migrating seamlessly  

Users with existing positions on Aave and Spark will finally be able to quit looking through the window and enjoy the features Summer.fi offers in just a few steps. 

Migrating your position will be as easy as it gets, thanks to the new smart portfolio feature. Users with existing positions on Aave and Spark will be able to connect their wallets to Summer.fi and instantly see the positions for migration. 

Once the migration feature is live, you’ll need to set up your Smart account and then, set an allowance for the aTokens in your wallet. The way it would work is pretty straightforward: A flash loan will repay the existing debt and the aTokens will move to your smart account after which a new debt will be drawn against the aTokens to repay the flash loan. In other words, you will not need to close your debt position to migrate.

The benefits of migrating are too great to ignore. You will be able to take advantage of all the features associated with Summer.fi as well as the various automations that just make life easier for lenders and borrowers alike.

For example, with a single click, you'll effortlessly adjust your position’s loan to value (LTV) as well as close positions like the speed of light in dynamic markets, all in one smooth transaction, taking advantage of the process to sidestep the usual liquidity hurdles.

Subsequently, after you migrate your position once the feature is live, you can as well take advantage of the stop-loss feature gradually becoming a user-favorite feature, to increase your protection. Lastly, the user interface promises to be much better, presenting you with essential data like liquidation prices and PnL, clearly and concisely. 

Introducing Morpho Blue on Summer.fi

To add to the above-listed protocols, Summer.fi is developing a new frontend for Morpho Blue, a new trustless lending protocol offering users more efficiency and flexibility than existing lending platforms through the creation of isolated lending markets for any asset. 

Summer’s choice to integrate Morpho shouldn’t come as a surprise as they sit at number 4 on the lending index on Ethereum with over $400m in TVL just below SparkDAO, Compound, and Aave, two of which are already aggregated on Summer.fi. 

However, it is not just the initial version (Morpho Optimizer) of the protocol that’s coming on Summer.fi but a much better and improved iteration tagged “Morpho Blue”. Morpho Blue improves on some of the issues with the OG version. For example, the fact that it is heavily reliant on the DAO as well as trusted contractors to execute upgrades and monitor risks. Additionally, Morpho Blue tackles inefficiencies in rate spread, low collateralization factors, and burdensome fees on the platform's Mainnet.

Morpho blue will enable the deployment of isolated lending markets. The protocol will do this by defining a loan asset, a collateral asset, and a liquidation LTV, as well as an oracle. On the technical side of things, unlike Morpho Optimizer, the contract is immutable and cannot be upgraded. Furthermore, the protocol is designed with a mere 650 lines of code, emphasizing simplicity, while also minimizing governance.

On the more user-offering side of things, Morpho Blue will be a more efficient version of the protocol thanks to the separation of the lending pools which will ensure that a liquidation event of one asset doesn’t affect the other assets. 

Morpho Blue and Summer.fi are made for each other as the latter is a lot more capital efficient removing costs such as fees for platform maintenance, risk management, and code security through the updates. In addition, collateral assets will remain within the protocol affording users improved capital efficiency.

In terms of flexibility, Morpho Blue will allow for the creation of loan and collateral assets and not just that but also allow any asset lending pool and risk management method to be built on it. 

Morpho Blue integration on Summer.fi, will however start with borrowing and will support basic assets such as the ETH/USDC, ETH/DAI, WSTETH/USDC pair and will go live sometime at the very beginning of next year. 

Other Updates

Ajna Redeployment 

As you may or not know, a few weeks ago, Ajna protocol dealt with a bug that led to the protocol winding down operations to upgrade the system. Following the event, precautionary measures have been improved, as well as the payment of the full bounty for the vulnerability found and the employment of the white hat hacker to audit the protocol.

Summer.fi on the other hand, despite being the front-end to access Ajna, wasn’t affected by the issue, albeit, Summer.fi responded immediately by blocking the ability to borrow more assets and limited the deposit of more capital in lieu of a fix by the Ajna protocol. 

Nonetheless, the goal for Ajna is to release a better iteration of the protocol that pushes them closer to a truly immutable protocol. But before that, Ajna will be redeploying the protocol at the end of Q4, and thereafter things will go back to normal on Summer.fi. What this means is that activities that involve Ajna will be back as soon as Ajna is redeployed. 

Other news

Firstly, in line with the vision to create the most simple user interface for DeFi integration, Summer.fi has just recently launched a whole new smart portfolio page. 

This new page improves the user experience for users in terms of how they understand the current state of their positions in addition to helping them understand what more their assets or current positions could do on Summer.fi. Users will be able to see all the assets within their wallets, including those deposited in Summer.fi and those outside of the protocol. You can find all the details about the new portfolio page here.

Beyond this, Summer.fi is developing a migration tool that detects when a user has a single collateral/single debt position on Aave v3 or spark owned by their connected EOA (wallet) and allows them to migrate it into a new DPM that will be accessible through Summer.fi. 

Concluding thoughts

With the addition of Morpho Blue, as well as other new features coming to Summer.fi, the protocol is fast becoming home to DeFi’s largest money markets, offering more than an aggregated front-end but also mechanics and automation that largely improve on capital performance.

The ceiling for Summer.fi is still invisible and we can only speculate on how far they can go!

If you are going to use Summer.fi then consider using our referral link which will entitle you to earn 5% off the fees generated.

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