DAM
Decentralized digital asset management (DAM) is a newer concept to traditional financial markets yet repeatedly replayed construction in the space of digital markets and blockchains. Thanks to the accessible, composable, and premissionless nature of decentralized finance (DeFi), global crowdsourcing of capital has been made easier than ever before. DAM marries this recent advancement in capital aggregation with strategic deployment of assets to achieve some objective such as yield generation, efficient asset appraisal, or risk optimization.
Quasar is a platform to explore the full breadth and depth of DAM. Quasar is uniquely positioned to leverage interoperability between independent blockchains with the interblockchain communciation protocol (IBC) to unlock the full potential of DAM applications.
Without DAM instruments in DeFi, individuals managing digital assets on DeFi protocols can quickly be subjected to the losing side of market trades due to reasons such as competition from larger market movers (whales), lower prioritization of transactions, MEV, or more outcome sensitivity to volatile gas fees. DAM applications help aggregate singular actions into collective ones that can amplify the outcome of individual strategic asset managment. A simple example is that of arbitrage. An individual may notice a price discreprancy between two decentralized exchanges (DEXs), yet only owns a modest amount of capital that would be significantly negatively impacted by gas fees and larger, competitive trades. However, it is highly probable that there are multiple individuals that have identified the same arbitrage opportunity. If each actor acted independently, a small percentage of the actors may realize a positive outcome, yet the market will still be left in an subpotimal state because not all buyers would not have been able to execute their desired trade. If, however, individuals could coordinate to execute arbitrage collectively each individual many more market participants can benefit and concurrently the marketplaces can be made more efficient with asset prices being more reflective of intrinsic value. The coordination layer is the critical value proposition for DAM based instruments in DeFi.
Vaults and Strategies are Quasar’s core solution to DAM. Vaults are composable multi-party smart contracts for aggregating digital assets. Strategies are composable smart contracts with execution logic to carry out market strategies on the Vaults underlying assets. The Vault-Strategy model, explained more in the next section, is a design approach Quasar believes will offer the greatest flexibility, scalability, and sovereignty for independent parties to make collective actions in DeFi.