Yield Tower
Suitable Scenario
Rangebound products are suitable for boring, sideways markets. Users have a higher chance of earning upside payoffs when volatility is low, and prices aren't moving much.
Product Overview
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For EARN Products (Secured), all invested amounts will be staked in the Aave protocol to generate passive returns.
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Moreover, a portion of the Aave returns will be retained as Base Yield, and the remaining part will be deployed to option strategies to generate potential Upside returns.
Fee Structure
SOFA will collect 15% of the user's option premium as a base trading fee.
Furthermore, if a 'winning' payout occurs for the user, a further 5% settlement fee will be charged against the total
Gross Upside Winnings. All the fees will be used to purchase and burn RCH tokens.
Vault
Withdraw
Once the deposit and smart contract transaction has been executed, assets cannot be withdrawn until the Settlement Date. A "Claim & Withdraw" option will be available post-settlement to transfer the final payout back to the user's wallet.
Risk Disclosures
The SOFA protocols were developed as a transparent and open-source effort, with maximum security and safety of assets at the top of mind. However, unforeseen and "force majeure" risks are always a remote possibility, and users shall explicitly acknowledge and accept full responsibility for any adverse outcomes that might arise from their activities on the SOFA protocols.
1. Payoff Variability & Losses
· Surge-based products are prone to full capital losses due to unfavorable market outcomes.
· Earn-based products could see fluctuations in realized yields from external factors, such as changes in Aave's prevailing interest rates.
2.DeFi Extensibility Risks with External Protocols
· SOFA protocols are fully extensible with 3rd party DeFi projects beyond our control, and exploits to these external protocols could bring unforeseen negative impacts.
3. Staking Yield Deficit
· A shortfall in staking income from Aave (extreme case = 0%) could cause Earn-based products to return a total payout slightly less than the original deposit.
4. Blockchain Systemic Risks
· SOFA protocols are reliant on Ethereum and EVM-compatible L1s for overall network and asset security.
5.Smart Contract Code Integrity
· The SOFA protocols have passed a full chain audit from Peckshield as of May 2024.
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