Ao Functions is an automation service tailored to facilitate scheduled responses to a diverse range of onchain conditions across the DeFi landscape, initially focusing on EVM-based blockchains. Unlike the prevalent approach in the market, which typically employs a mix of onchain and off-chain modules to address the blockchain automation dilemma, our objective is to leverage the ao tech stack to develop software that operates entirely onchain.
four advantages
This gives us space fo prioritizing transparency while maintaining economic efficiency and scalability. Ao functions will run a comprehensive set of web3 functions on the ao runtime, enabling automation of various strategies within DeFi protocols.
Some of the schemas include 1 different approaches.
1. Automated Execution & Liquidity Pool Rebalancing: As the traditional AMM model becomes increasingly complex (for example, Uniswap v3 and the forthcoming Uniswap v4, Maverick Protocol etc.), there is a growing need for active management of one’s LP position to remain a profitable provider. Automating liquidity provision restores simplicity relatable with passively managing the LP pool, with complete transparency regarding the function’s logic executed atop the ao ledger.
portfolio assitance and support
2. Active Portfolio Management: The substantial influx of newly issued assets like ETH’s LSTs and LRTs derivatives presents a broad spectrum of arbitrage opportunities through looping strategies (borrowing the underlying asset, in this case, ETH, and leveraging yield-bearing ones). This delta-neutral strategy can be expanded globally, positioning ao Functions as a decentralized, active fund manager. All actions taking advantage of ao arbitrarily scalable execution, as well as Arweave’s seeding.
3. Unlocking Transparency in DeFi Protocols Automation: There is a notable lack of transparency regarding how automation is implemented in major protocols such as Summer.fi, Gamma.xyz, Enzyme, Sommelier, Arrakis, or CIAN. Ao Functions could introduce much-needed transparency to a landscape currently dominated by off-chain web3 functions.
4. Seamless Third-Party Integrations: Novel brokerage primitives such as Gearbox, Delta Prime, Alpaca, and Extra Finance could seamlessly plug into ao Functions to leverage pre-built DeFi strategies. Additionally, they can utilize the advantages that come from ao Functions’ moat, potentially kicking off ao Functions flywheel effect.
We’re already in contact with our planned launch partner, Delta Prime, to bring the first iteration of our product to life—delta-neutral positions rebalancing, with the logic layer outsourced to ao.
