Crypto DeFi on Ethereum L1 has proven attractive, but at this stage is best characterised as early-stage venture capital investment. Uncertainty, combined with the ever-present risk of ‘hacks’ involving theft of funds, suggest better risk-adjusted returns from diversified portfolios. For the average investor, achieving the requisite actively-managed, broadly-diversified exposure across many promising tokens, while aggressively staking and collecting the DeFi rewards available, and with composability permitting responsible hedging, is best achieved by saving both time and money via an activist pooled investment management platform like PowerPool.
Ethereum L1 will struggle simultaneously to transition to POS and also to scale. Despite many EVM-compliant protocols moving to alternative L1s and L2 roll-ups or sidechains, surges in transactions traffic will keep the Ethereum L1 ecosystem gas fees too high for the average investor to achieve thematically-balanced, actively-managed, broadly-diversifed, rewards-rich and hedge-able portfolio on their own. The PowerPool Universe value proposition posits that responsible investing will be multi-chain/level and that the future Ethereum ecosystem gas fee environment is best managed by pooling average investors' tokens together with thousands of others.
PowerPool ‘basket’/index tokens can be minted directly, but to save gas fees, most investors simply buy them on DEXes. The compositions/weightings of diversified token baskets are actively managed by the stakeholders of the PowerPool DAO, although the composition of some may be managed in partnership with other DAOs to provide a full range of thematic investment options; borrowing/lending, synthetic shorting, and derivatives positions using perpetual futures and options. In future, the average investor need only hold a gas-efficient self-managed mix of PowerUniverse family tokens, which can be traded/swapped gas-free on the PowerPool website.
The PowerPool DAO governance CVP tokens can be staked/redeemed as xCVP tokens, earning a share of the NAV of the DAO Treasury, essentially an ownership share in a crypto hedge fund. Quadratic voting minimises the influence of 'whales' in managing the DAO affairs via xCVP/LP CVP tokens, minimum holdings of which are also used to 'gate' access to portions of the Community's online presence, such as the Forum Product Development discussions.