DeFi Wealth Management New Paradigm: Simplifying Complex Operations while Balancing Safety and Returns

On April 16, a startup focused on simplifying on-chain investments completed a $4 million financing round, led by a well-known venture capital firm. This reflects that the DeFi sector is undergoing a significant transformation: complex on-chain activities are being simplified, and the technological infrastructure has matured. The old models are facing a historic opportunity for reshaping, and new opportunities have emerged.

This company started as an internal startup project of a certain institution at the end of 2023, initially taking the form of on-chain robots, which combine different operational steps to facilitate user investment and usage. Although helping users with financial management is not a new business model, building such a tool stack from a technical perspective is not difficult with the support of technologies like AI, large language models, and chain abstraction. The real challenge lies in traffic operations and establishing a trust mechanism.

Looking back, in 2020, there were similar projects that received investment, aimed at helping users cope with complex Decentralized Finance strategies. However, they ultimately failed to retain users, mainly because on-chain yield strategies are a public market, making it difficult for retail investors to compete with well-funded large players. Compared to unsustainable high yields, safety concerns and strategy optimization became secondary considerations.

Currently, we are entering the era of democratized asset management. From some exchanges testing ETF tools in 2021, to the emergence of the RWA paradigm driven by asset tokenization, and then to the appearance of various on-chain strategy showcase platforms, all indicate a strong market demand for simplified investment thresholds. However, due to on-chain transparency, efficient strategies are difficult to keep confidential, often evolving into an arms race, where final yields tend to balance out.

Looking to the future, interest-bearing assets on the blockchain may become a mainstream trend. Although currently only a few product types such as exchanges, stablecoins, Decentralized Finance, and public chains have gained widespread market recognition, RWA has been rooted and growing since 2022, accelerating productization and practicality. Whether it is complex asset types or a variety of on-chain DeFi strategies, they are driving exchange users to migrate to the blockchain.

The emergence of this new company reflects the industry's expectation for on-chain yield conversion into civilian asset management. Just as index funds and retirement plans have created a long bull market in U.S. stocks, there will be tremendous demand for stable income in the future market. The significance of the next generation of DeFi may lie in ensuring the innovation of Internet 3.0 while becoming a true version 2.0 of financial technology.

However, challenges still exist. How to balance AI assistance with human intervention, and how to delineate the responsibility for investment mistakes are pressing issues that need to be addressed. Perhaps separating information flow from capital flow, creating a strategy community driven by user-generated content, and allowing projects to compete with each other for the benefit of retail investors could be a direction worth exploring.

Despite the numerous challenges, this world is still worth our continuous exploration of the unknown. As a public space in a divided world, cryptocurrency will undoubtedly continue to thrive, unfolding new possibilities.