We are currently seeing a trend shift in Decentralized Finance (DeFi) from the previously unsustainable ponzinomics into a more reliable profit model.
DeFi participants are starting to realise that reward tokens are not sustainable as they are hyperinflationary and supply will quickly flood the market which pushes the price down.
The search for sustainable yield has led many to profitable services like Ribbon Finance, a decentralized options vault or GMX, a decentralized spot and perpetual contract trading platform. However, these run the risk of losses should the counterparty out-trade the protocol.
But what if the they could guarantee the safety of your initial capital?
What is Struct Finance?
Singapore-based Struct Finance, founded by Louis Ng, Ersin Dalkali and Miguel Depaz, is set to launch on the Avalanche blockchain.
“Struct Finance is the first permissionless protocol designed to unlock the next generation of instruments by building the tools, infrastructure, and foundation necessary to enable structured products on DeFi.“
Avalanche is one of the fastest blockchains and with the use of subnets, it is able to theoretically handle an infinite number of transactions per second. Currently, they boast thousands of nodes with transitional finality under 2 seconds.
It is projected to launch its ICO on the Avalaunch launchpad, one of the fastest and most efficient platforms for decentralized fundraising.
“Through the leadership of Louis, Ersin and Miguel, we believe Struct Finance will set the gold standard of templated smart contracts.“
Galen Law-Kun, Founding Partner of Double Peak
Their Three Pillars
Struct Finance’s focus revolves around the three core pillars: Factory, Aggregator and Composer.
The first pillar, Factory, is a smart contract that is able to customize interest-rate products based on parameters such as hurdle rate, token type, maturity date and size.
The second pillar is Aggregator. As the name suggests, it is an consolidates and incorporates derivatives available across decentralized exchanges (DEX).
The last pillar, Composer, allows investors to be creative and produce their own vaults and enable them to offer their very own structured products to other DeFi participants.
Guaranteed Capital?
Once the pillars are up and running, interesting investment products can be crafted like principal-protected investments which guarantee the user will get back 100% of their original investment.
It is similar to the principal protected note (PPN) in the traditional finance (TradFi) world. It guarantees a minimum return equal to the investor’s principal no matter how poorly the underlying option performs. But if the underlying option does well, the investor will receive the profit on top of the initial investment.
This allows users to gain access to investment products that were once only available to high-net-worth individuals.
Top tier backers
“Struct Finance’s roadmap on allowing investors to create their own structured product is very exciting for our institutional clients!”
Mustafa Yilham, Partner at Bixin Ventures
The platformed managedto secure a staggering US$3.9 million seed funding from some of the biggest names in the crypto space.
This seed round saw participation from some crypto powerhouses like Singapore-based QCP Capital and leading crypto market maker Wintermute.
While Struct Finance has not officially launched any product yet, their core product functionality has been completed. The smart contract was audited by Dedaub and there were only minor issues that have been quickly resolved.
The Alpha testing has just concluded and it will be moving to Beta testing soon.
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[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chain Debrief
