I Like he idea and option of ySFI vault in Yearn for On-chain collateral via dynamic exposure.
Adding more Spice in the Yearn ecosystem can lead to more Tvl.
Existing decentralized earning platforms expose liquidity providers to complex code-driven outcomes. Network participants must evaluate an array of catastrophic scenarios where the resulting state could wipe out their holdings or lead to a significant impermanent loss. It is hard to anticipate the net effect of extreme market volatility or focused economic attacks. Saffron narrows the set of possible outcomes by giving liquidity providers dynamic exposure.
Saffron’s first application gives liquidity providers the option to select customized risk and return profiles via Saffron pool tranches. Saffron separately tokenizes the future earning stream and the net present value of utilized principal in each tranche. Earnings, based on tokenized holdings, are distributed accordingly across all tranches via payback waterfalls.
The initial application of the payback waterfall is split between two primary tranches.
- A yield enhanced “A” tranche.
- A risk mitigated super-senior “AA” tranche.
When removed, added liquidity is used to pay back the initial principal of AA holders before paying the yield’s principal and interest enhanced A tranche. In exchange for this enhanced return, participants of the A tranche must stake Saffron’s native tokens (SFI) to mitigate against failures on the underlying platform (Compound, Aave, or Curve). In this scenario, the Saffron protocol acts as an escrow service to transfer risk between A tranche participants and AA tranche participants.
So interested or not in ySFI spice saffron vault ?