DeFi Portfolio Manager Smart Contracts

Abstract

The DeFi Portfolio Manager is a system of smart contracts designed to automate and optimize DeFi investments on the MultiversX blockchain. It consists of two main components: a Smart Account Deployer and individual Smart Account contracts for each user, allowing for personalized portfolio management based on risk tolerance.

Introduction

This system enables users to deploy their own Smart Account contracts and manage DeFi positions across multiple protocols with automated rebalancing based on AI-driven strategies. The system supports various position types including simple token holdings, staking, liquidity provision, and farming.

Deployment and Usage Flow

1. Initial Setup

1. Deploy Smart Account Template Contract

   • This serves as the blueprint for all user Smart Accounts
   • Contains all the logic for position management and portfolio operations

2. Deploy Smart Account Deployer Contract

   #[init]
   fn init(
       &self,
       smart_account_open_fee: BigUint,
       admin_address: ManagedAddress,
       smart_account_template_address: ManagedAddress, // Address of deployed template
       egld_wrapper_address: ManagedAddress,
   );

   • Uses the template address for future Smart Account deployments
   • Sets up admin controls and deployment fees

2. Strategy Configuration

Admin configures available strategies in the Deployer contract:

#[endpoint(setStrategiesPerEpoch)]
fn set_strategies_per_epoch(
    &self,
    risk_tolerance: u64,
    risk_strategies: MultiValueEncoded<
        MultiValue4<u64, PositionType, ManagedAddress, TokenIdentifier>
    >,
);

• Defines strategies for each risk tolerance level (1-5)
• Sets allocation percentages and position types
• Configures protocol addresses and tokens

3. User Flow

1. Deploy Personal Smart Account

   #[payable("EGLD")]
   #[endpoint(deploySmartAccount)]
   fn deploy_smart_account(&self) -> ManagedAddress;

   • User pays the deployment fee
   • Receives their personal Smart Account address

2. Initialize Smart Account

   #[payable("EGLD")]
   #[endpoint(initializeSmartAccount)]
   fn initialize_smart_account(&self, risk_tolerance: u64);

   • User selects their risk tolerance
   • Deposits EGLD for investment
   • Smart Account automatically distributes funds according to the strategy

4. Position Creation

The Smart Account processes the strategy steps in sequence:

1. ESDT Positions
   • Direct token swaps and holds
2. Staking Positions
   • Token swaps followed by staking
3. LP Positions
   • Token swaps and liquidity provision
4. Farm Positions
   • LP token creation and farm entry

Smart Account Deployer

Main Features

• Deploys individual Smart Account contracts for users
• Manages strategy updates based on risk tolerance
• Handles Smart Account template upgrades
• Controls access through admin functionality

Smart Account

Position Types

• ESDT: Simple token holdings
• Staking: Staked positions
• LP: Liquidity provider positions
• Farm: Yield farming positions

Storage

• user_strategy: Stores the current strategy configuration
• user_portfolio: Maintains the list of active positions
• user_risk_tolerance: Stores the user's risk preference level

Strategy Management

Structure

Strategies are defined per risk tolerance level (1-5) and consist of:

• Percentage allocation
• Position type (ESDT/Staking/LP/Farm)
• Contract address for interaction
• Output token identifier

Constraints

• Maximum 5 positions per portfolio
• Total allocation must equal 100%
• Risk tolerance levels from 1 to 5

Security Considerations

• Public endpoints have strict validation
• Admin-only functions for strategy updates
• Safe math operations for calculations

Future Improvements

• Enhanced rebalancing mechanics
• Additional position types
• Optimized gas usage
• Extended analytics capabilities

Backend Service

The mx-portfolio-pilot-service handles all interactions with the smart contracts:

Core Functionalities

• Manages contract deployment and initialization
• Updates strategies based on AI recommendations
• Processes user operations and portfolio management
• Monitors positions and handles rebalancing

The service requires setup for:

• Network configuration (Gateway, Chain)
• Contract addresses (Deployer, Template)
• AI service integration
• Monitoring parameters

Security Considerations

• Public endpoints have strict validation
• Admin-only functions for strategy updates
• Balance checks before operations
• Safe math operations for calculations
• Transaction signing using secure key management
• API authentication and rate limiting

Future Improvements

• Enhanced rebalancing mechanics
• Additional position types
• Optimized gas usage
• Extended analytics capabilities