The Financial Abstraction Layer: where DeFi stops being artisanal
In DeFi, most users interact directly with strategies: pools, staking, lending, farming. Each decision is manual and each error falls on the individual. That logic works for experimentation but not for asset management at scale.
Here comes the Financial Abstraction Layer (FAL) of Lorenzo Protocol.
The FAL acts as a financial abstraction layer that separates the end user from operational complexity. It does not eliminate risk, but rather structures it. Instead of each person having to understand custodians, off-chain execution, rebalancing, or liquidations, the system orchestrates it as a whole.
It can be thought of as an on-chain financial operating system. The user interacts with a simple interface; behind it, the FAL coordinates multiple functions: capital routing, strategy selection, NAV calculation, and yield distribution.
This architecture allows for something uncommon in DeFi: integrating strategies that do not live completely on-chain — such as quantitative trading or institutional management — without losing traceability. Execution can occur off-chain, but allocation, control, and outcomes are recorded on it.
The result is not more yield, but less cognitive friction and better capital governance. That is the difference between a set of protocols and financial infrastructure.
In that framework, the token $BANK functions as the alignment layer: governing how the system operates, not how performance is pursued.
@Lorenzo Protocol shows that abstraction is not about hiding risks, but designing them.
Image: Lorenzo Protocol on X
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This publication should not be considered financial advice. Always do your own research and make informed decisions when investing in cryptocurrencies.
