Yield aggregation opportunities on NEAR/Aurora

Hey all, this is Peter, the founder of BlueBit, a newly yield aggregator on Aurora. I have some thoughts about NEAR/Aurora future to share as well as a clear opportunity i’ve seen.

Since 2022, I have been seeing ongoing massive adoption and TVL surge from the NEAR/Aurora ecosystem. As of today, Near, together with Aurora, is tied to 12th place among all blockchains in terms of TVL.

Currently, BlueBit is #1 yield aggregator on NEAR, with over 15M in TVL. We’re proud of this figure. But compared with other robust blockchains, we still have a lot of room to improve. (e.g., Ethereum, Avax, Solana, and Fantom all have very strong yield aggregators.) Therefore we see a clear opportunity for yield aggregators like BlueBit on NEAR/Aurora to improve and grow.

Yield aggregators are an essential constituent of DeFi realm and help to enhance the overall capital efficiency and robustness of an ecosystem. It might help in several ways:

-Greatly increase composability of DeFi and make the ecosystem more robust and a higher TVL as a result:

Curve war on Ethereum is a good example: Convex and Yearn as two yield aggregators, taking advantage of Curve and helping users to earn higher yields by reallocating resources and auto-compounding. Those two protocols helped Ethereum to draw a lot of attention, improve its robustness, and contributed over 15 billion TVL to the ecosystem.

-Increase overall liquidity and capital efficiency:

As an important part of DeFi Lego, yield aggregation protocols are not competitive in nature. In turn, yield aggregation can partner with any protocols like a DEX (LP vaults), a lending protocol (single-asset vault), or staking (LP and single-asset vault).

Through partnerships with other protocols, yield aggregation TVL will increase, the other party protocol TVL will increase as well (double count), and users will be able to yield more than they did before, the ecosystem TVL will increase and overall transaction/liquidity will be more robust. Everyone is happy.

-Future potential

BlueBit is the first protocol on NEAR that applies Curve-style VE tokenomics. We’re excited to see that all major protocols on NEAR/Aurora are ready to adopt this tokenomics and bring more dynamics, e.g., Bastion, Trisolaris, Wannaswap, Ref finance. Yield aggregator like BlueBit is ready to integrate our partners’ VE tokenomics into our vaults and offer FAAS to users. Namely, we will have strategic vaults that have boost factors on integrated platforms (e.g., Trisolaris) by keeping locking part of the earned reward tokens (e.g., $TRI) into their governance token (e.g., $vexTRI).

By then, users do not need to have $BSTN, $TRI, or $WANNA to boost their position, but they can simply deposit on BlueBit to earn boosted yield. (Like Convex does)

At last, some suggestions about NEAR/Aurora status quo:

I also witnessed that although the overall ecosystem is prosperous, it heavily leans towards several giants. In Aurora, the top 3 protocols together dominate 85% of the ecosystem TVL, other protocols add up accounting for less than 15%.

This in turn might lead to another issue, oligopoly. Giants will have all the resources (partnership with any protocols, more disclosure from near media, proximity grants) to reinforce their leadership, either by increasing more use cases for their native token, or incentivizing their users with received grants to achieve a higher TVL dominance. While other small protocols are squeezed and struggling to survive, let alone compete.

While some goat protocols are greatly helpful for the ecosystem to draw attention at the beginning, they might be harmful to the ecosystem to stay healthy and sustainable in the long run. I believe the whole ecosystem will be much more thriving than it is now if it is more balanced.

I personally suggest that NEAR/Aurora team might pay more attention and lean more resources towards potential/promising small-to-medium protocols. I believe 3–5 similarly sizable competencies in each segment (dex, lending, yield aggregators, lendings, NFT) will serve to maintain the ecosystem to its best state.

I believe in DeFi, I believe in composability, I also believe in NEAR and Aurora. We love this big family and feel extremely enthusiastic and thankful for building on it. And any feedback/comment/discussion is extremely welcomed!