The architecture is composed of the following components:
These are on chain vaults of the following types:
Fractal operated public pools (USDC, ETH, WBTC): permissionless and compostable DeFi pools. Our USDC pool currently has 9m TVL.
Integrations on top of DeFi-native lending protocols such as Clearpool, Maple or TrueFi.
Segregated credit pools: permissioned and lender specific on-chain credit facilities with specific risk constraints. For example, we could create a credit facility that is only underwriting delta-neutral basis strategies on ETH MainNet.
From the balance sheet source to the subaccounts
This is the core generalized contract. It is owned by the customer with select exposed functions to the risk-engine such as liquidation or the ability emergency unwind a position.
Adapters on top of existing DeFi protocols. Protocols supported include Aave, Compound, Curve, Convex, Uniswap, GMX, Paraswap, 1inch as well as all of their forks on different EVM chains.
Structured product contracts: total return swap, interest rate swap, forwards and options. These contracts rely on an off-chain pricing feed between two counterparties and automatically handle margining.
A software program that monitors the health of Fractal margin accounts, triggers margin calls, and liquidates customer positions should this be required. This logic is running off-chain and has the required permissions to perform the required operations on-chain. It was developed during Alex’s time at LedgerPrime running the DeFi book over 2+ years.
Fractal's risk framework for each asset is based on an adaptation of the CME’s SPAN Methodology including parameters such as volatility and price ranges, cross-asset correlation, holder distribution, and order book depth.
The initial capital base will come from willing lenders/LPs in exchange for yield. As the network gains traction, part of the network fees will be used to fund the insurance pool until it becomes self-sustaining.