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🦞Lobster x dHEDGE — How to Combine Profitability and Security

Published on 
February 28, 2024

Hello Lobs 🦞!

If you’re already familiar with our platform (and if you’re not, you can learn more here), you know that we are built on top of the dHEDGE protocol.

What exactly is dHEDGE, and what are the advantages of using their infrastructure? Let’s dive into these questions.

What is dHEDGE? 🧐

dHEDGE is a decentralized, non-custodial asset management protocol operating on Ethereum, Optimism, Polygon, and Arbitrum networks. It offers a censorship-resistant and non-custodial vault, in the form of a smart contract, for individuals to allocate funds to asset managers like Lobster.

In simpler terms, dHEDGE vaults enable users to maintain full ownership of their funds while leveraging the expertise of top strategy managers to oversee their capital. In addition, through blockchain technology, which provides unparalleled transparency, it allows users to track every transaction made by the vault. Let’s take a look at what the advantages are of using dHEDGE infrastructure.

What are the benefits of their infrastructure? 🛠️

One of the primary benefits of using dHEDGE is the enhanced security it offers to their investors. dHEDGE provides vault smart contracts that have undergone multiple audits by renowned firms such as Certik and Iosiro. This rigorous auditing process ensures the highest level of security for its users. Additionally, dHEDGE has partnered with ImmuneFi to organize a bug bounty program, further fortifying the robustness of their smart contracts.

dHEDGE vaults can interact only with a specific whitelist of smart contracts on the most trusted DeFi protocols, as chosen by the dHEDGE DAO. This means managers can only execute operations with these approved contracts, and any attempt to transact outside of this list is automatically blocked.

Additionally, another advantage of dHEDGE vaults is their ability to guarantee users immediate access to their funds. Unlike other investment strategies that might lock funds for a set period, dHEDGE ensures that when a user decides to withdraw his investments, the process is executed smoothly and instantly by the smart contract, withdrawing the funds directly from the underlying platforms. This feature preserves the liquidity of the user’s investment, setting it apart from options like staking, where funds can be blocked for varying duration depending on blockchain conditions.

Why is Lobster using dHEDGE? 🦞

Lobster uses dHEDGE for 3 main reasons:

🛡️The security of our users is one of our most major concerns. By using dHEDGE infrastructure, Lobster can provide investors with robust security. We want our users to be able to generate sustainable yield on their cryptocurrencies investment in a safe way.

🔒Lobster’s algorithm is plugged to the vaults and is permitted to perform a specific set of operations on the funds, as defined in the vault’s smart contract. These operations include liquidity providing on Uniswap V3 and lending on AAVE. Importantly, all other transactions are forbidden, ensuring that operations outside the agreed-upon scope cannot occur, and funds cannot be withdrawn inappropriately. An important aspect to mention is, even if a hacker impersonates Lobster’s algorithm, he won’t be able to withdraw the funds thanks to the whitelisted smart contracts.

💧Furthermore, dHEDGE infrastructure ensures that users funds remain liquid and can be withdrawn at any time. This leads to a more trusting collaboration between our users and Lobster.

Exploring the Future with dHEDGE 🚀

Lobster has come to the decision to build on dHEDGE with the vision that their solution is the best for our users. We, at Lobster, want to make sure that our investors benefit from extreme safety for their investments but also from the integrity and efficiency of our asset management process.

Their protocol stands out in the decentralized finance landscape for its commitment to security and transparency. We invite you to explore further the capabilities of dHEDGE and how it empowers our services at Lobster. Join our Discord and become a part of this innovative financial journey!