Cryptocurrency is all about adoption.Resent studies shows that only under 3% of world population hold some kind of cryptocurrency.

To popularize adoption of cryptocurrencies changes from our current system and technologies is a vital part

Banking is one of these system that is being disrupted by crypto universe. 2020–2021 marks DEFI Boom!

Infancy problem of DEFI platforms.

Under 3% statistics of crypto currency itself shows how small people have adopted this new type of technology, plus the volatility on top of that..Phew!!.Then one can imagine how DEFI can be.

Hacking into DEFI platforms, Soft rugs ,Hard rugs are day to day stories at DEFI space.

The lucrative thing about DEFI platforms is better interest on the coins you keep, better lending and borrowing power than a bank, And those juicy 1 Million APY on certain coins!

But if you are not careful enough,your portfolio will be “rugged” before you even realize it.

The FORMATION.FI solution

One of the most effective strategy of investment in modern times is not focusing in maximizing yield but reducing risk.The best way to achieve this is by investing in funds which are non correlated.

In traditional investments this is achieved by investing in Stocks ,gold or bond.Which all give different rate of returns in different market conditions, but together will hedge against each other and produce stable but good returns.

                          This risk parity method is easier to do in traditional asset class, but in crypto and DEFI its a different story.

In the decentralized and trust less world of crypto , assets(coins) exits in different network(Smart Chains). FORMATION.FI aims to bring these assets together in a risk free way with maximizing returns and minimum risk.

How FORMATION.FI works

The project aims to automatically and periodically update farming and yield strategies across all networks using algorithms. Initial networks will be Ethereum, Binance Smart Chain (BSC), Huobi Eco Chain (HECO).More tokens will be added soon

This is the indexed to 3 token class namely ALPHA BETA & GAMMA.

• ALPHA is the index token class representing aggressive yield farming strategies with liquidity mining programs from top performing protocols across major networks. Alpha class assets are high growth projects with high risk. The protocol employs modest leverage to boost yield in a bull cycle.
• BETA is the index token class representing market indices designed to track the top Web3 infrastructure projects in key segments like DeFi (lending/borrowing, DEXes, derivatives, asset management), Layer 1 and 2 projects, open data market, oracles, AI, and storage across major networks.
• GAMMA is the index token class that produces consistent monthly income. These are generally based on stable coins staked in the top lending protocols across major networks. This produces solid, predictable yield without any exposure to liquidity mining.

The beauty of this tokenized approach is that it can itself be indexed and tokenized, allowing us to produce PARITY, a fourth token class which synthesizes the other three:

• PARITY is the index token class which tracks a risk-adjusted, balanced portfolio of ALPHAs, BETAs, and GAMMAs across the network to generate the most protected APY against environmental changes. It’s the kind of portfolio of the yield farming strategy where you let the robo-advisor manage your portfolio through all economic seasons (bull, bear, boom and bust). It’s long-term growth focused. It will have both a small leverage to boost yield and certain perpetual futures and options to hedge.

The final outcome of this rigorous allocation of assets by risk is the matrix of cross-chain yield farming strategies algorithmically engineered and maintained in a single PARITY index coin. In theory, a single PARITY-composite coin could represent the best, risk-adjusted portfolio of cross-chain, an algorithmically re basing DeFi asset that can be staked, exchanged, or traded without any limit.

$FORM Governance token

Governance is a major player in any project and FORMATION.FI doesn't want to fall short in that.So they introduced $FORM token which got three fold utility.

• Governance Voting. $FORM holders vote on proposals for the FORM operational treasury.
• Staking + Liquidity Mining. $FORM will be awarded to a user who deposits or stakes underlying digital assets to generate Alpha, Beta, Gamma and Parity or swap among the index coins.
• Dark Pools: $FORM will confer access to investment liquidity pools which harness the wisdom of the crowd to incubate and fund the most promising new DeFi projects.

Tokenomics

ROAD MAP Conclusion

Formation.Fi is an ambitious project with strong fundamentals.The team behind it is developing at a good pace to meet the road map ,which is a good sign. The developer got good vision about the project and a good support group.If developed successfully this project could mitigate current issues of DEFI. (DISCLAIMER: I am not a financial adviser)

Reference

First published in Medium.com.Handle given in reference.