Unlock DeFi Automation with Gelato's Web3 Functions

With its unparalleled potential, DeFi is transforming our financial world. Its open, decentralized nature democratizes access to financial services. Yet, this brave new world is not without its complexities. The promise of DeFi comes with the challenge of managing intricate smart contract operations. This is where Gelato Network steps in, introducing a potent solution — Gelato's Web3 Functions.

To fully understand the paradigm shift DeFi represents, let's compare it to its traditional counterpart, Centralized Finance (CeFi):

• Access: CeFi is permissioned and requires approval. DeFi is permissionless and open to anyone with an internet connection.

• Control over Assets: In CeFi, third parties custody your assets. DeFi allows direct control without middlemen.

• Transparency: CeFi systems are opaque. DeFi is powered by blockchain, making it transparent and verifiable.

• Governance: CeFi has centralized decision makers. DeFi is governed by its community.

• Privacy: CeFi requires identity disclosure. DeFi allows pseudonymous, secure transactions.

Challenges in DeFi

DeFi often requires constant interaction with multiple protocols — from claiming staking rewards to rebalancing positions or executing trades based on market conditions. This requires time, effort, and expertise from users.

Additionally, many DeFi operations rely on off-chain data (market prices, events, user-specific conditions). Without it, rules cannot react to real-world changes. Integrating off-chain data is essential for effective automation.

This is where Gelato’s Web3 Functions come in: they automate routine tasks, execute condition-based actions, and bring off-chain data into DeFi protocols.

Introducing Gelato's Web3 Functions

Gelato Network is leading the automation revolution with Web3 Functions. These serverless tools let developers build decentralized applications that connect on-chain and off-chain worlds seamlessly.

• On-chain: Smart contracts that users want to automate.

• Off-chain: Web3 Functions that access APIs and execute custom logic to control those contracts.

The link between them is the Web3 Function Task, which defines the triggers and target contracts.

Bridging the Gap

Web3 Functions address DeFi’s automation challenge by integrating smart contracts with off-chain data. This enables automated responses to any condition: yield farming, swaps, liquidity management, oracles, derivatives, and lending.

Yield Farming

• Automated Reward Management: Reinvent rewards automatically. When thresholds are reached, Web3 Functions reinvest them into pools for compounding returns.

• Smart Liquidity Management: Monitor yields across pools via APIs and shift assets dynamically to optimize returns.

Oracles

• Automated Oracle Updates: Monitor off-chain sources and trigger smart contract updates to ensure accurate, timely data.

• Automated Synchronization: Keep oracle contracts synchronized across multiple networks (e.g., testnets, mainnets).

Token Swaps

• Dynamic Rate Monitoring: Monitor balances and DEX rates off-chain. When favorable conditions are met, execute swaps on-chain automatically for optimal efficiency.

Crypto Derivatives

• Vault & Collateral Automation: Track vaults and collateral off-chain. When thresholds are reached, trigger on-chain actions to manage risk and reduce errors.

Lending and Borrowing

• Automated Position Management: Monitor pool liquidity and loan health off-chain. Adjust liquidity or loan terms automatically when thresholds are reached.

Across DeFi, Web3 Functions streamline operations, minimize manual intervention, and boost efficiency.

Join the Revolution!

Gelato’s Web3 Functions give developers the tools to build decentralized, serverless applications that connect on-chain and off-chain data seamlessly. They are already transforming DeFi by automating complex operations.

👉 Join our community and developer discussions on Discord.

👉 Web3 Functions are available today in private beta. Read the documentation and try the Hardhat template to write, test, and deploy your own functions.

👉 Apply here to test Web3 Functions!