How to Create a DeFi Aggregator
How to Create a DeFi Aggregator
We’ll tell you briefly and in lay terms about what DeFi aggregators are, why users like them, how to launch your DeFi aggregator, and how much it costs.
DeFi aggregators are another rapidly growing trend in the cryptocurrency world, which gained momentum in 2020. Specifically, on only one platform — 1inch — daily transaction volume has grown from averaging $1 million in daily volume in July 2020, to over $40 million a day, in January 2021. Other DeFi aggregators such as Matcha, Zapper.fi, and Zerion.io improved their performance significantly as well. It points to a great interest in such projects, which you can use to launch your own DeFi aggregator. Later, we’ll tell you how to do it and how much the development of such software costs.
Decentralized finance or DeFi is financial instruments in the form of services and apps, which are managed not by centralized companies, banks, or regulators, but by decentralized blockchain protocols. In 2020, these projects became the main growth driver of the cryptocurrency market because, unlike traditional financial instruments and services, DeFi has no problem with accessibility, transparency, and data confidentiality assurance.
However, decentralized finance has serious problems with UX / UI: most DeFi services have a complex user interface and many specific terms, which complicates working with them and pushes beginners away. Besides, at this stage, the DeFi applications are fragmented and it is quite difficult for users to keep an eye on the market.
DeFi aggregators are intended to resolve both problems. These services gather information from various DeFi protocols and integrate them into a single interface, which is simple and intuitive. This allows users to monitor the condition of many markets and make smarter decisions due to only one tool.
Besides, aggregators perform other functions such as connecting liquidity pools, reducing transaction costs, earnings on staking, participation in lotteries, buying and selling NFT, the launch of IDO/IFO, and many more.
Here are some examples of DeFi aggregators on the market:
Before you start creating DeFi aggregators, you should find out what users and decentralized service providers need them for. So you can understand what features you better implement in your project.
Our team has been developing blockchain-, fintech- and DeFi projects since 2015 – from smart contracts to decentralized crypto exchanges. You can see our portfolio and find out cooperation conditions via email@example.com, on this phone number +1-206-785-16-88, or via a feedback form.
DeFi aggregator development process consists of the following stages:
1.Project discovery phase
At this step, you and the development company should determine the goals and requirements, which will allow creating a software product that meets the needs and expectations of end-users. To do so, you need to study your target audience, competitors, and market condition, thereafter you’ll need to develop the design requirements and technical specifications as well as develop a detailed plan for the creation of a DeFi aggregator.
Development of the design requirements usually implies the creation of:
The result of all this has to be the following things:
DeFi aggregators emerged with the motto of improving user experience by providing a crypto community with a single, simple, and convenient interface for working with different DeFi protocols. So when developing your own project, you need to create an interface that really makes it easier for users to interact with DeFi protocols. So there is no point to lay down functionality that in fact turns out to be complicated and confusing.
This is where you need an experienced UX/UI design team to help you implement features into a convenient and user-friendly interface that your potential users will love. Its development usually includes the following stages:
In all DeFi platforms, most of the back-end part is embedded in smart contracts. They’re the ones responsible for the implementation of the main features whether it be the token exchange or crypto-lending. To develop the smart contracts of your aggregator, you’ll have to think about their logic and algorithms in advance.
For example, 1inch has a unique algorithm that allows users to exchange tokens at the most favorable rate. This is possible thanks to splitting orders and the selection of the best rates on different DEX platforms. Also, you should think about the monetization of your aggregator. Usually, DeFi aggregators earn commissions from users and/or partners.
4. Front-end development of an aggregator
Front-end is also a very important part of the DeFi aggregator, as this is the part that users interact with directly. Therefore, whether the users will like your aggregator or not depends on it. To create front-end, which they will definitely like, you need experienced developers and a correct tech stack, which will allow implementing all of their ideas.
Here is an example of a tech stack for the creation of a DeFi aggregator:
5. Product testing
Testing is crucial for the DeFi aggregator development as it allows making sure that all features of the created product work as intended. Besides, testing helps to identify system vulnerabilities and remove them before hackers take advantage of them: according to Block Research, in 2020 there were 15 hacks of DeFi platforms amounting to $120 million funds being stolen, which became possible due to errors in smart contracts.
Testing and bug fixes reduce future risks of similar attacks significantly, especially if independent auditors such as CertiK and Slowmist conduct the testing. Besides, in the case of positive assessment, their reports help a DeFi protocol to be more credible.
Cost of the DeFi aggregator development
#1. What is a DeFi aggregator?
#2. Why do the end-users of DeFi need aggregators?
#3. Why do decentralized finance providers need aggregators?
#4. DeFi aggregator functionality
#5. DeFi aggregator development stages