How Axal Built 9% APY Automated Savings with Smart Wallets

Axal provides 6-10% automated stablecoin savings accounts that make DeFi accessible to everyone. By aggregating USDC lending pools across Morpho, Pendle, and Euler, Axal diversifies user funds across these pools and uses a proprietary rebalancer to keep APY high and funds safe.

Their users are crypto-natives too busy to manage their stablecoins manually, plus newer crypto users seeking better returns. While similar fintech products like Robinhood Gold and Wealthfront offer modest yields, Axal users earn double through automated DeFi exposure - all without the complexity.

The Multi-Protocol DeFi Challenge

For Axal to deliver on their promise of simplified, high-yield DeFi, they faced two critical infrastructure barriers that were blocking widespread adoption:

• Gas accounting complexity: When investing stablecoins across multiple protocols, users shouldn't have to think about native gas costs. Traditional EOA gas sponsorship wasn't secure or scalable due to gas sweeping vulnerabilities and unpredictable network spikes that could lead to astronomically high transaction costs.

• Sequential processing bottlenecks: Processing each transaction onchain sequentially wasn't scalable for their transaction engine. This created poor UX with slow transaction processing that users could see in real-time, often leading to frustration.

The impact on users was significant:

• High friction onboarding: Users faced barriers entering DeFi due to gas complexity

• Poor user experience: Sequential transactions took over a minute with multiple protocol deposits

• High operational costs: Getting into diversified positions cost ~$1 in gas fees, making small deposits economically unfeasible

• Capital inefficiency: Users couldn't access diversified yield opportunities due to technical limitations

Smart Wallets Built for DeFi

Before using Alchemy, Axal tried several approaches that fell short. Various bundler solutions couldn't handle their specific ERC-7702 + batching requirements, and 4337 wallet solutions created vendor lock-in risks where user funds could be locked if the bundler went down.

The team had clear requirements: native ERC-7702 support with reliable bundling infrastructure, proven security for handling user funds, sub-second transaction processing with atomic execution guarantees, and comprehensive technical documentation with responsive engineering support.

Axal's solution leverages Alchemy Smart Wallets to create a seamless experience.

• Generate new EOA wallets for users with quorum key signing

• Convert wallets to ERC-7702 enabled accounts on first deposit

• Leverage the bundler infrastructure for transaction batching and gas sponsorship

• All signing operations secured through their Trusted Execution Environment (TEE)

• Batch multiple contract calls into atomic transactions confirmed in the same block

With user funds, security was paramount.

• All transactions are processed through their TEE with express user approval

• Complete application audit by Sherlock before production release

• Quorum key architecture prevents single points of failure

Higher Yields, Lower Costs

The transformation has been dramatic across every metric that matters:

• Performance breakthroughs: Deposits to multiple protocols on Base now complete in ~400ms (including round-trip time to TEE signer) - a massive improvement from sequential processing taking over a minute.

• Massive cost reduction: 6-figure stablecoin deposits into 4 pools cost just 1 cent versus ~$1 in previous gas fees - a 99% cost reduction that makes small deposits economically viable.

• UX wins: Axal eliminated gas complexity entirely. Users never think about native gas costs, removing a major DeFi adoption barrier.

• Yield optimized: Atomic multi-protocol deposits enable 9% average APY through diversification that was previously impossible due to technical constraints.

Join the DeFi Infrastructure Revolution

Axal demonstrates how smart wallets transform complex DeFi operations into simple, user-friendly experiences. By eliminating gas complexity and enabling atomic multi-protocol transactions, they're setting the standard for next-generation DeFi applications. You can learn more about Axal here and open an account.

Their success shows what's possible when technical barriers are removed - users get higher yields with better UX, and developers can focus on building innovative financial products rather than wrestling with blockchain complexity.

We're here to help you build DeFi applications anyone can use with smart wallets.

Start building today:

• Learn about Smart Wallets and try the demo

• Schedule a call with our team to discuss your use case