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1/ Let's talk about Impermanent Loss and how it can be solved using tranches and segregating returns between parties.
๐๐ฅ๐๐ข๐ฆ๐ฌ ๐ญ๐ก๐ข๐ฌ ๐ฉ๐จ๐ฌ๐ญ ๐๐จ๐ง๐ญ๐๐ข๐ง๐ฌ ๐๐ฅ๐ฉ๐ก๐ ๐๐ซ๐ ๐ฎ๐ง๐๐ข๐ฌ๐ฉ๐ฎ๐ญ๐๐.
๐๐ฅ๐๐ข๐ฆ๐ฌ ๐ญ๐ก๐ข๐ฌ ๐ฉ๐จ๐ฌ๐ญ ๐๐จ๐ง๐ญ๐๐ข๐ง๐ฌ ๐๐ฅ๐ฉ๐ก๐ ๐๐ซ๐ ๐ฎ๐ง๐๐ข๐ฌ๐ฉ๐ฎ๐ญ๐๐.
2/ @saffronfinance_ is building a tranche ecosystem that is bifurcating yields between high-risk/high-return and low-risk/low return tranches. The initial products were aimed at interest generation. High-risk tranche earns 10x interest of low tranche, in exchange for insuring the
3/ principal of the low-risk tranche if there is an adverse event in one of the underlying lending/yield aggregating platforms. Now, thinking outside the box and expanding a bit this can be applied to insurance, more specifically IL insurance.
4/ A low-risk tranche (LPs) can deposit their LP tokens (Uniswap, Sushiswap, etc.) into this tranche in exchange for a portion of their LP rewards & trading fees. A high-risk/high-yield tranche contains both of the LP tokens and covers the IL of the low-risk tranche.
5/ If the low-risk tranche has IL, the tokens are taken out from the high-yield tranche. The low-risk tranche can now be a LP and earn at least 12% APY with *zero* risk of IL. The high-yield tranche will receive elevated returns from the LP rewards + trading fees obtained from
6/ insuring the low-risk tranche. Yields for this tranche could very well be 88% APY. Now imagine users can only enter the high-yield tranche by having the $SFI and staking it, which is fixed and limited in supply.
7/ If the pair has excessive IL and the high-yield tranche is losing too much principal a third tranche could be created that also contains the two principal tokens. This tranche would receive $SFI rewards as compensation. Conceivably in the future, the $SFI token could receive
8/ protocol fees among all tranche products making it a cash-flow generating token, and a bet that there is high-demand for tranche products. Given its unique PMF and basically no competitors in DeFi, it is.
9/ Now also imagine that @iearnfinance does not have a tranche product, and is basically acquiring the entire DeFi stack. What if?
Some other similarities between the two projects: the lead dev for @saffronfinance_ could have rugged 50m DAI, but choose not to. Andre could have
Some other similarities between the two projects: the lead dev for @saffronfinance_ could have rugged 50m DAI, but choose not to. Andre could have
10/ rugged 198m DAI in July (initial $YFI farming) but choose not to. Both products are focused on composability and improving DeFi, while also making returns more simple and sustainable. Andre has also been experimenting/thinking about IL insurance for quite some time.
11/ I would have shared this information in @basedkarbon 's paid group, but he is a scammer and I cancelled my subscription.
Tokyo is back on the menu $100k EOY.
Imagine the smell.
Tokyo is back on the menu $100k EOY.
Imagine the smell.
