DeFi Pooling

Introduction

Decentralized finance (DeFi) offers to democratize financial services to include anyone with a smartphone. However, to truly live up to its potential and accommodate the smaller investors, fees must fall.

While it is difficult to reduce the fees involved in processing a smart contract on an Ethereum blockchain, sharing those fees with others is a relatively trivial process. Fee sharing is well established within layer 1 (L1) Pools; however, joining, leaving, and re-balancing an L1 Pool is still expensive (often prohibitively so). The solution? Layer 2 (L2) transaction pooling – share the transaction costs across a larger group.

By batching transaction requests, the pool of users can be significantly larger. This solution is known as DeFi Pooling. DeFi Pooling offers a new way to split the L1 bill and makes position re-balancing available on L2.