The revolution of on-chain asset management. - by Evix

Overview

Chain: Arbitrum

Category: Asset Management/Vault

While DeFi shows promise, it remains in its early stages. Creating, executing, optimizing, and managing complex strategies, either for oneself or for others, can be quite complicated. The current issues include a lack of transparency, isolated protocols, a complex user journey, limited flexibility, technical barriers, and an inability to fractionalize.

Factor aims to address these issues by providing a platform for the simple, fast, and no-code, modular creation of vaults. These vaults can range from a simple index to the implementation of complex strategies using other vaults.

• DeFi Middleware

• Vaults

• Users

• Tokenomics

• Governance

• Current State

• Conclusion

DeFi Middleware

Factor aims to become a pillar of DeFi Middleware. By interconnecting DeFi protocols within its ecosystem and providing builders with the tools and framework suitable for designing and deploying innovative solutions on a large scale. This could stimulate DeFi growth.

Furthermore, with a unified interface that simplifies interaction, reduces complexity and lowers entry barriers for users, it could become the front-end of DeFi.

Vaults

Tokenized baskets

Factor enables the creation of tokenized asset baskets, providing a seamless way to increase assets under management and keep a performance record on the blockchain. The assets in these baskets are secure and can generate returns in the Factor ecosystem. The baskets are fully collateralized and allow exposure to various investment strategies.

Yield Pools

Factor's Yield Pools allow for the creation of customizable, non-custodial lending and borrowing pools, suited to various risk profiles. Each pool is isolated to contain risk and represented by dedicated tokens. Investors can supply and borrow assets in these pools, with a predetermined collateralization factor for borrowing. Additionally, the protocol supports the creation of permissioned pools, thereby meeting the treasury management demand for DAOs.

Derivatives

Factor is developing standards for vaults aimed at simplifying trustless and permissionless processes for originating, liquidating, and trading decentralized derivatives on any underlying asset. This innovative technology provides users with the ability to create advanced risk management tools, such as hedged positions, delta-neutral strategies, or credit default swaps to protect against stablecoin disconnection. These sophisticated structures provide treasury managers with the necessary tools to hedge their positions during periods of market uncertainty and high volatility.

Users

Due to its flexible infrastructure, Factor targets several types of users.

DeFi Protocols: They can expand their asset exposure, combine them with others, create innovative, diversified, and unique use cases, thus increasing their TVL and revenue.

DeFi Natives: Simplified liquidity management. They no longer need to spend time and resources building their own infrastructure. They can bring their ideas to life quickly with a fully customizable tool.

Treasury Managers: Allows DAOs to manage their treasuries effectively. They have access to a wide range of markets/tokens and can establish permissions for transactions to be backed by consensus. They can create pools specific to their needs.

Asset Managers: Can constitute an asset under management and establish an on-chain history. The fact that vaults can include any type of token, rules can be customized as much as possible, and the no-code aspect makes their activities less burdensome, allowing them to focus on their core business.

Yield Farmers: Generally lower gas fees, more efficient transaction management, asset composability, higher returns. Here again, customization and composition open up a world of possibilities.

Depositors: Benefit from a wide range of opportunities, from passive/active strategy to thematic investing. Gas savings and ease of use. Analysis and rating tools will allow users to optimize their strategies and track their performance.

Tokenomics

Factor's ethos is based on the principles of fairness, community engagement, and long-term sustainability. The tokenomics have therefore been designed according to these values.

Token: $FCTR

Maximum Supply: 100,000,000 (No additional issuance)

Utilities: Governance - Sharing of protocol yield

Issuance:

veFCTR

Holders of $FCTR can lock them for a period of up to 4 years to obtain veFCTR. The lock-up duration changes the amount of veFCTR obtained per $FCTR locked.

You have the choice to vote or delegate your voting power.

There is a "rage-quit" system subject to a fee based on the remaining time.

The use of a veToken serves to prevent yield mercenaries, as an anti-whale mechanism, and for long-term incentives.

When you obtain veFCTR, you are entitled to share 50% of the protocol fees, participate in governance, decide on the issuance of $FCTR on the vaults, and for creators, a fee reduction (≥ 10,000 $FCTR).

Plateform Fee

Here is a simplified overview of the fee structure:

Governance

Factor has opted for community-oriented governance and sectorization of its activities.

The MainDAO is the central unit and is composed of several subDAOs. It will oversee its subs and ensure alignment of efforts.

The subDAOs are poles dedicated to specific sectors, which will be governed and coordinated by actors specialized in their fields. These include:

• Treasury management subDAO: Ensures that treasury assets generate optimal returns.

• Governance and coordination subDAO: Ensures that the community has its say in the direction and future of the protocol.

• Research and development subDAO: Ensures that Factor remains competitive and innovative.

• Growth and education subDAO: Ensures the creation of reliable sources of information for the community and the creation of a brand image.

• FactorInsight subDAO: Ensures the provision of data and insights to help users make informed decisions about their exposure.

Each of these subDAOs will have a transparent and auditable record of its activities, which will be accessible to the public, ensuring that all actors can ensure the legitimacy and precision of their actions.

As for the Governance Voting model, Factor has opted for a hybrid model. For the MainDAO, the voting system used is the widely spread "one token, one vote" system. For the subDAOs, however, Quadratic Voting will be used.

Current Situation

Currently, Factor offers 4 vaults on Arbitrum which are indexes:

• ArbDeFi Index: It includes about ten tokens that represent innovative protocols of Arbitrum.

• ArbiDerivatives Index: Which includes four tokens from derivative product platforms.

• ArbiLending Index: Which includes three tokens from lending protocols.

• Roundtable Index: Which includes four leading protocols on Arbitrum.

Factor is currently only in its early stages, as you can see the only live products are Indexes but this will evolve. V2 is coming with more complex products.

Several partnerships have been concluded with DeFi protocols. I can mention PlutusDAO, BufferFinance, Just Bet, Lodestar and many others.

Some Metrics:

• Market Cap: $3.7M

• Fully Diluted Valuation: $25M

• Token Price: $0.25

• Vaults: 4

• Depositors: 200

• TVL: $22k

Conclusion

Factor's value proposition is interesting and the challenges the protocol has to meet are numerous.

By targeting a wide range of potential users from Asset Managers to DAOs, it is not making things easy for itself.

If it achieves its objectives, then it will become tentacular and open up many opportunities for all DeFi and its users. Offering lockers exponential revenue and the governance power of a pillar of the ecosystem.

However, there are still many products to release and users to acquire. This should happen over time.