Fractal Protocol

Yield Generation

Staking, liquidity provisioning, and on-chain lending offer alternative and uncorrelated sources of yield to TradFi based on new financial primitives. However, these are inaccessible and difficult to understand. There is an opportunity space in building the bridge between complex DeFi products and simple interfaces for the next 100 million crypto users. This is why Fractal exists.
Generating yield in crypto used to be as simple as providing stable coin liquidity on Curve and collecting rewards on a semi-regular basis. Today's environment requires custom smart contracts, systematic risk monitoring and more financial structuring complexity. Yields are also cyclical, volatile and opaque — leaving users with too much work to optimize them efficiently. This is where Fractal comes in.

Core Fractal Components

The Fractal architecture is composed of 6 core pieces:
  1. 1.
    Master Vault
  2. 2.
    Yield Reserve
  3. 3.
    Bridge Routers
  4. 4.
    Strategy & Lending Manager Vaults
  5. 5.
    Strategies & Loans

Strategy Vaults

Strategy manager vaults are deployed on each chain and are responsible for the allocation between strategies. They receive assets from the Yield Reserve and allocate them to 1,….,N active strategies on their respective chain. Strategy Manager Vaults are also responsible for internal accounting. They keep track of the balance deployed and the interest earned.

Strategy Contracts

Abstract Strategies

Strategy contracts are the money-makers of the system. Experience has shown that all chains need the same core DeFi primitives: money markets, AMMs, option protocols and perpetual swap protocols. Fractal contributors have developed abstract strategies to deploy capital to any Uniswap, Compound or Aave fork, and are constantly developing more adapters. Example strategies include optimizing folded yields between money markets, customized decentralized option vaults and many more.
If you would like to work on strategy development, please reach out on Discord!

Centralization vs. Decentralization dilemma

While DeFi ambitions to be fully permissionless, non-custodial, and decentralized, some components of our infrastructure rely on centralized scripts, such as being a liquidity relayer for a bridge. These strategies are implemented using institutional grade security. Funds are always secured on MPC Vaults on Fireblocks with independent signers. There is always a trade-off between speed of execution and decentralization. We are choosing to favor rapid execution in the short term for the benefit of Fractal Users and will be progressively working towards decentralization in the coming months.