Summer.fi Review: A Beacon of DeFi Innovation on Layer 2

Posted on October 22, 2023 by Design in Design Innovation | 0 Comments

In the fast-evolving landscape of decentralized finance (DeFi), Summer.fi has emerged as a shining star, offering a fresh perspective on DeFi services. Formerly known as Oasis, Summer.fi’s journey began back in 2016, even before the inception of the Maker Protocol and the Single Collateral Dai. In June 2023, Oasis rebranded itself as Summer.fi, a name that encapsulates simplicity, vitality, and a friendly atmosphere.

Summer.fi‘s approach to DeFi services is underpinned by blockchain technology, offering users unparalleled transparency and decentralization. With a suite of products, including Borrow, Multiply, and Earn, Summer.fi brings a host of benefits over traditional financial systems. In this comprehensive Summer.fi review, we will delve into the fundamental aspects of Summer.fi’s DeFi services on Layer 2 and explore its innovative features.

Borrowing with Ease

Summer.fi Borrow is the gateway to creating and interacting with Vaults, which are instrumental in unlocking liquidity from your crypto assets. Allowing users to finance large purchases, participate in other DeFi protocols and construct their own strategies.

One standout feature of Summer.fi Borrow is its support for over 20 cryptocurrencies as collateral, including ETH and WBTC. Additionally, Summer.fi has a generalized UX that gives users the opportunity to seamlessly select from a range of protocols to utilize for borrowing including Maker, AAVE, and Spark with many more in development.

Multiply: Simplifying Investment Management

Summer.fi’s Multiply feature powers up the process of borrowing funds. With a single transaction, users can adjust their collateral by depositing a supported cryptocurrency, borrowing a stablecoin, and then using it to acquire additional collateral. This streamlined approach eliminates the need for multiple transactions, reducing fees and saving time.

From July 2023, Summer.fi embraced Layer 2 scalability by launching on the Optimism and Arbitrum Layer 2 solutions for Ethereum. This move dramatically improved trading functionality, reduced transaction costs by up to 42 times, and enhanced scalability. Layer 2 solutions ensure seamless trading experiences even during peak periods, offering leverage-like trading with significantly lower fees.

Earning with Confidence

Summer.fi’s Earn products are curated DeFi options designed to help users maximize their yields. Users maintain full custody of their assets while enjoying the benefits of DeFi yield farming. By working with Aave and Maker protocols, Summer.fi provides secure and controlled yield opportunities for users.

One noteworthy strategy within the Summer.fi ecosystem is the StETH Earn strategy, which allows users to increase yields by borrowing ETH and staking it as StETH. This innovative approach leverages the power of DeFi to optimize returns on crypto assets.

Additionally, Summer.fi offers a passive income opportunity through the Dai Savings Rate (DSR), allowing DAI holders to share in the revenue generated by MakerDAO. There are no lock-ups or fees for using the Dai Savings Rate, providing users with a hassle-free way to earn.

Partnering for Success

Summer.fi understands the importance of partnerships in the DeFi space. To enhance user experiences, they integrated the 1inch Network decentralized finance aggregator protocol. This integration aimed to alleviate the challenge of high gas costs, making transactions more cost-efficient for users.

The platform supports a range of compatible wallets, including Metamask, WalletConnect, Ledger, Portis Wallet, MyEtherWallet, Coinbase Wallet, and Trezor Gnosis Safe, ensuring accessibility for users across various platforms.

Transparent and Competitive Fees

Summer.fi charges fees for its services, but these fees are competitive within the DeFi ecosystem. Stability fees, which function as interest rates for borrowed funds, vary depending on the type of Vault and are determined by MKR token holders.

Summer.fi Borrow: No fee; users pay transaction gas costs in ETH.
Summer.fi Multiply: A 0.2% fee, settled in Dai, plus transaction gas costs in ETH.
Summer.fi Earn: A 0.04% fee, settled in Dai, to set up a Vault, plus transaction gas costs in ETH.
Summer.fi Stop-Loss: A 0.2% fee, settled in Dai, to close a Vault, plus transaction gas costs in ETH; additional fees apply when protection is triggered, settled in Dai.

Importantly, the only withdrawal fees users encounter are the standard transaction gas fees, including network fees and a flat platform fee.

A Diverse Range of Supported Cryptocurrencies

Summer.fi supports a diverse array of cryptocurrencies, including Dai (DAI), Ethereum (ETH), Wrapped Staked ETH (wstETH), Wrapped Bitcoin (wBTC), Chainlink (LINK), Polygon (MATIC), Decentraland (MANA), Ren Bitcoin (renBTC), Gemini Dollar (GUSD), Uniswap Governance Token (UNI), Uniswap Liquidity Provider Token (UNI LP), Curve Liquidity Provide Token (CRV LP), Yearn Finance (YFI), and many more. This wide selection empowers users to explore various digital assets while enjoying the transparency and security of the Summer.fi platform.

Final Thoughts

In conclusion, Summer.fi has carved out a prominent place for itself in the DeFi ecosystem by offering a user-friendly, secure, and transparent platform for borrowing, lending, and earning yields on crypto assets. Its seamless transition to Layer 2 scaling solutions, integration with protocols like Ajna, and innovative strategies such as StETH Earn demonstrate its commitment to providing users with cutting-edge DeFi services. Summer.fi is more than a platform; it’s a beacon of DeFi innovation in the world of blockchain finance.