Bril Finance is preparing to launch a cross-chain liquidity pool on the DeFi markets on the crypto DEX PancakeSwap based on AI (artificial intelligence).
The new tool will be called CupcakeHop, and it will consist of a cross-chain liquidity pool and a yield aggregator. It has been developed in collaboration with the DEX PancakeSwap.
Crypto and DeFi: the new AI tool CupcakeHop coming to PancakeSwap
CupcakeHop has not yet been released, but according to the developers of Bril Finance it could significantly transform the DeFi landscape.
CupcakeHop in fact, according to its developers, would have the ability to redefine the optimization of yield and cross-chain liquidity.
This new protocol promises to simplify the DeFi for both novice and experienced investors, making high-yield opportunities more accessible.
They even promise that its advanced portfolio management and risk mitigation features, based on AI, will be destined to set new standards in the sector.
CupcakeHop is defined as a revolutionary cross-chain liquidity pool that aggregates yields from various sources, thus offering users the best rewards for their contributions to the liquidity pools.
Additionally, it will be equipped with an automated portfolio management system based on AI, which optimizes investment strategies in real-time, tailored to the user’s specific goals.
The fact of being developed in collaboration with PancakeSwap should ensure robust and easy-to-use functionalities.
The liquidity pool
A liquidity pool is made up of crypto funds locked in a smart contract that are used to facilitate trades within decentralized exchanges.
In fact, DeFi platforms usually use automated market makers (AMM) to enable crypto trading in an automatic and permissionless way, and liquidity pools allow AMMs to function correctly.
Obviously, the more a DEX has to handle high trading volumes, the more it needs a lot of funds to be immobilized in its liquidity pools, and so they often try to attract as much liquidity as possible by providing incentives and returns to those who deposit their tokens in their liquidity pools.
The problem is that not only on the same DEX there are multiple liquidity pools, but now there are also many DEX that operate on many chains.
The most important DEX in the world, Uniswap, now operates on as many as 19 blockchains, and PancakeSwap on 9.
Besides these two, which are the most famous, there are now hundreds of other DEX, such as Curve, Balancer, Raydium, and many others.
Just think that out of 19 billion dollars of TVL immobilized overall on all the DEXs in the world, only 5.6 are on Uniswap, while on PancakeSwap there are 1.9 and on Curve almost 2.
Navigating this world in search of the best returns is very complicated if done manually.
The cross-chain research
For this reason, over time, several protocols have already emerged that allow for the search for the best returns, but they generally operate on a single chain.
Protocols like the new CupcakeHop, on the other hand, search for the best yields simultaneously on multiple chains, exponentially increasing the potential to find the best ones.
By now we are increasingly moving towards a cross-chain DeFi, that is, one that operates simultaneously on different chains with protocols that allow exchanges even between different blockchains.
AI transforms the DeFi landscape: PancakeSwap will welcome the new cross-chain crypto pool
CupcakeHop furthermore promises an AI-based automated portfolio management.
In fact, even in the case of cross-chain management, it is practically impossible to keep up with the best returns, which in some cases change continuously, if operating manually.
Therefore, it is not only useful for a yield research protocol to operate cross-chain, but also to allow automated management of fund allocation, so that they can be reallocated very quickly, if necessary or useful, to those DEX that offer better yields.
It is necessary, however, to specify that it is not at all certain that artificial intelligence tools perform well, because regardless of correct functioning from a technical point of view (which is absolutely necessary), it is not 100% certain that they also perform at their best from a financial point of view.
For example, the fact that CupcakeHop was developed in collaboration with the DEX PancakeSwap certainly provides good guarantees regarding its technical functioning, but in reality, it does not add guarantees to its optimal functioning from a financial point of view.
Furthermore, it is still a DeFi protocol, meaning public and without insurance. Therefore, at least for the initial period, its use is not recommended for operators with little experience in decentralized finance.