If you want to know how Pavo Finance works, you need to understand DeFi first. To understand DeFi, let us start with the banks we are all familiar with.
Banks are the most leveraged institutions in the traditional financial system. They are the financial industry giants that facilitate payments, accept deposits, and provide credit to individuals, enterprises, financial institutions, and governments. They allow money to flow worldwide by providing value transfer services (deposits, withdrawals, transfers), extending credit limits (loans), etc.
According to relevant data, the total market value of the top ten banks globally by 2021 is $2.5 trillion (data source from TheBanker)! In 2021, the total market value of the entire cryptocurrency industry was only $2 trillion, and Defi section only accounts for 6.9% of this market value, or $143 billion (data source from Coinmarketcap). This shows that DeFi has excellent growth potential.
However, banks also have some drawbacks:
1. Funds are hard to track: It is overly complex, if not impossible, to track the money we deposit in the bank, and we will never have the details if the bank does not disclose them.
2. Unbalanced distribution of asset returns: People with more assets have higher financial returns, and there is a lack of balance between the rich and the poor in terms of financial returns.
3. Arduous to operate: both parties must hold accounts that can support the currency in the transfer.
4. Tedious review cycle: there is still a long waiting process to open an offshore account.
5. Potential human risk: Controlled by human beings, it is vulnerable to human mismanagement and corruption.
6. Risk of privacy breach: people’s private information can be easily compromised.
To solve these problems, DeFi was created and it’s a financial tool that allows anyone to use equally. All asset information is open and transparent without personal information and without waiting for long periods for funds transactions to be reviewed.
But there are also some challenging issues in the rapidly growing world of DeFi:
1. Asset tracking sometimes is cumbersome — If you invest in multiple projects, you need to go to various platforms to check the statistics data to calculate the total assets.
2. Hard to select safe and high-quality projects — according to Certik, $1.3 billion was lost in 2021 due to hacking attacks.
3. No reliable data comparison — when forming LPs, you need to consider many factors to increase your return with controlled risks, such as the current currency price trend, APR, lock-up volume, and your actual position, and there is no data information that you can use for comparison in the market.
4. Difficult to maximize the return — few people can optimize the return on their assets at the right time and reap the benefits of repeated investment.
5. Impermanent loss of LP caused by price fluctuation — the biggest concern of users is that the impermanent loss is greater than the asset gains.
6. Development bottleneck in the later stage of a project -.when a DeFi project reaches a later stage of development, users will find that the project becomes less attractive because the token rewards for users are reduced or completely gone.
Pavo Finance (hereinafter referred to as Pavo) aims to solve the mentioned problems.
Pavo is a portfolio tracker and multi-chain yield optimizer that help you monitor, track on-chain assets and manage your portfolio intelligently with only one click. You can easily browse your asset information with this asset tracking overview feature for free.
Generally, Pavo will filter out some quality projects and help you invest in various liquidity pools for income through a set of income farming investment strategies protected and executed by smart contracts. Pavo automatically reinvests your earnings, which helps you achieve a high level of compounding. By compounding your earnings with Pavo, you can save a lot of gas fees and time.
Specifically, Pavo will have a single-coin mining pool that you can enter and exit at any time without worrying about the impermanent loss of LP, and there will also be a stablecoin mining pool with higher stable returns than that on Anchor protocol.
Also, Pavo will build a smart treasury, which will decide what feature Pavo will launch later, and it will be written on a smart contract so that everyone can monitor it. Only those in the Pavo community can decide what it does.
Moreover, Pavo will create a mobile-friendly app that you can go to at any time to manage your assets, and it will also access more payment channels for the convenience of users.
In a nutshell, Pavo is committed to building a high-yield DeFi platform that everyone can participate in.
Pavo will officially be launched in the next quarter. For more updates, please check the following channels: