DeFi is reshaping every facet of the financial landscape. It offers new ways to facilitate financial flows of all kinds from the provision of credit to the exchange of one asset for another while allowing people to engage directly with one another all around the globe. The open nature of DeFi has resulted in the development of an enormous financial ecosystem built to facilitate all of these activities spanning a vast array of financial protocols such as Aave, Compound, Maker and Lido.

And this brings us to the automated market maker, a fundamental innovation standing in the middle of this massive revolution, allowing every other DeFi activity to take place and function as the base layer. AMM's allow users to engage in swap activity with each other on a 24/7 basis, acting as the beating heart by enabling the constant circulation of liquidity that allows DeFi to function and grow day after day.

Balancer sits at the center of the AMM space and expands on the concept by offering a programmable base layer, enabling the development of a large variety of liquidity use cases on top of it. The Balancer architecture is built with composability in mind to accelerate the development of DeFi money Legos. This is where Dynamo comes into play. Dynamo is built to leverage Balancer's composability and optimize the returns of liquidity providers by mobilizing their idle liquidity. Liquidity is cycled into lending markets like Aave and Compound via vaults, allowing liquidity providers to passively benefit from a multilayered yield generation strategy by depositing in a single stable swap pool on Balancer.

User deposits on Balancer benefit from an optimized liquidity distribution strategy that combines market-making and lending through a single liquidity interface, which takes out the grunt work of yield aggregation. Dynamo’s ERC-4626 vaults are built using Vyper, which offers increased security and composability. The vaults react to interest rate fluctuations through the use of a decentralized rebalancing process that allows any externally owned address (EOA) to propose a rebalancing proposal that brings higher returns vs the currently active strategy. As long as the proposed strategy remains active, the proposer (strategist) earns a share of the yield. In short: Dynamo is built to optimize the returns of AMM liquidity providers by offering a holistic yield generation strategy that links liquidity provision to multilayered yield strategies in DeFi money markets.