@RariCapital is a robo advisor that maximizes yield by carrying out lending and farming activities across Defi Protocols such as Compound, KeeperDao, Aave etc

Basically they aim to be the Wealthfront of DeFi

Here’s why I’m bullish and ate the gas fees to invest recently

The product deploys capital in 3 strategies:

ETH pool - Consistent returns on ETH denominated in ETH

Stable Pool -Risk averse returns in smart contract audited protocols

Yield Pool- Risk-on juiced returns including unaudited contracts

Tokenomics:

9.5% fee on all gains and 70% of revenue is used to buy back and burn $RGT, the native governance token

Rari has hinted at future incentives in community calls that would allow users to get discounts on fees for staking $RGT

Fuse:

Fuse is Rari’s custom money market deployer currently in development. Fuse seeks to enable ANYONE to create a money market for ANY digital asset, a concept they refer to as “superfluid collateral”. Custom curve, any yield, with any parameters.

Fuse Significance:

Platform technology that could enable thousands of apps to be built on it with SDK. What 0x is for DEXs, Fuse could be for money markets. A market of money markets. Uniswap is a free market for asset swaps. Fuse is a free market for lending/borrowing.

@ZainManji had a great term of calling Fuse a whitelabeled* Aave. I might add the analogy - Amazon:Shopify, Aave:Fuse. Arm the rebels with the tech and see what they will do with it. https://medium.com/rari-capital/a-prelude-to-fuse-f0b3afab40c

Tanks:

Tanks are a system that enables you to lend an asset in exchange for another asset while maintaining a certain collateral ratio. For example, you could deposit BTC, get USDC as interest in return and deposit that into a yield pool to earn double interest.

Tanks Significance: Retain exposure to key assets while also earning yields.

L2:

Short term the team is focusing on utilizing Optimism due to reduced complexity of development, but Starkware is their ideal solution for reducing gas costs for their decentralized rebalancer nodes while preserving instant finality times.

L2 Significance: Anyone can participate without paying for a single wei. Loopring may also allow the team to make pool tokens liquid, enabling frictionless swapping between pools upping yields.

Gas fees are holding back a tidal wave of users and alpha opps. L2 solves this.

I’m bullish because I'm aware of my own ignorance.

The skills required to effectively earn maximum yield are confined to the most sophisticated power users. The complexity of the DeFi experience will eventually be abstracted away from the user and Rari could be part of this.

UX (Mobile App):

The team has hinted at a mobile app in comm calls and have used landing pages to test CAC, messaging and retail appetite. This will be a key piece in abstracting away complexity and enabling retail access to DeFi returns.

Fintech in the front. DeFi In back.

Barbell Investing Strategy:

It’s unclear whether L1 protocols or aggregators will accrue more value (Protocol Sink Thesis vs. Aggregation Theory). Does Eth become a commoditized rails or a powerful toll road and triple point asset - Capital + Consumable/Transformable + SOV?

A barbell strategy is a great way to neutralize risk and uncertainty and benefit from asymmetric upside. One end ETH, one end Aggregators like $RGT , $Alpha, $YFI , $Rook

Team:

Young, hungry and they ship code rather than talk. They have a balanced approach, valuing both technical and community development.

@jai_bhavnani @JackLipstone @transmissions11 @davidslucid @WillGallon1 @JetJadeja

Power Users:

@Tetranode @DeFiGod1 and @dcfgod are in. Why aren't you?

This is my first attempt at analyzing a crypto asset on twitter. What did I miss, misinterpret and/or communicate poorly? Any feedback is welcome.