fija Strategies
fija offers a variety of yield strategies.
fija Yield Strategies: Operational Overview
fija provides institutional-grade yield infrastructure through a suite of automated, rule-based strategies. By bridging the gap between traditional finance and decentralized protocols, we enable partners to access DeFi yield through a secure and transparent smart contract framework.
1. Technical Architecture & Execution
Smart Contract Foundation: All fija strategies are built as individual smart contracts, with each contract representing a unique investment logic.
Vault Interaction: Partner-facing Vault contracts interact directly with these strategy contracts in order to deposit funds into a strategy.
DeFi Deployment: The strategy contract then automatically deposits the funds (crypto assets) in decentralized finance (DeFi) Web3 applications, such as lending protocols, staking applications, DEXs, or bridges for liquidity providing.
Yield Generation: The goal is to earn money by providing liquidity to these applications. The apps in return pay “interests,” derived from the fees they charge their customers for lending, swapping cryptocurrencies, or using a proof-of-stake network.
2. Deposit, Harvesting & Reinvestment
Investment Claims: The apps to which the strategy contracts deposit funds provide "investment tokens" or grant a claim to the assets. These claims are held by the strategy contract.
Strategy Tokens: The strategy contract distributes "strategy tokens" to the vaults. These tokens represent the claim on the underlying strategy and can be redeemed to retrieve funds from the strategy contract.
Harvesting & Reinvestment: In given time intervals, the strategy contract harvests the fees paid out by the underlying apps. During this process, the strategy is rebalanced to achieve the initial distribution of funds into the underlying assets, resulting in the contract receiving more investment tokens.
3. Rebalancing & Optimization
Rule-Based Allocation: fija strategies use a regular rebalancing process to ensure optimal allocation of funds.
Operational Adjustments: Rebalancing occurs at strategy-specific intervals. During this process, the strategy moves funds between different positions to ensure an optimal risk/reward profile, such as adjusting long vs. short positions or moving funds between different Liquidity Pools.
Trigger Mechanism: Rebalancing, Harvesting, and Emergency mode functions are only triggered if the Strategy Smart Contract requests it based on pre-defined rules set with deployment or upon instructions from the Partner.
4. Security & Capital Preservation
Emergency Mode: In case of emergency (e.g., unexpected activities like a depeg) or if a strategy is discontinued, the strategy is set to “emergency mode.”
Capital Protection: During emergency mode, all funds are retrieved from the DeFi protocols and stored in the strategy contract in the deposit currency. No profits are earned during this period.
Non-Custodial Integrity: The holder of the fija token can retrieve their funds through the vault. fija does not have access to the funds at any time, even during emergency mode.
5. Strategy Evolution & Timelocks
Proposed Updates: A strategy for a specific vault can be changed by proposing a new strategy in the vault contract and informing customers.
Timelock Mechanism: A timelock mechanism (defaulting to three days, though differing periods can be agreed upon) ensures customers have sufficient time to react.
User Choice: During the timelock period, customers can choose to redeem their tokens or accept the upcoming change. After the period ends, funds are automatically moved from the old strategy to the new one via the vault.
6. Profit Distribution & Partner Rewards
Reinvestment (75%): Seventy-five percent (75%) of the generated profits are reinvested into the strategy, increasing the token price.
Service Fee (25%): The remaining twenty-five percent (25%) of profits are automatically allocated to a fija wallet.
Partner Share: A share is allocated to the Partner. The Partner receives a monthly statement, and payments are made in either FIAT or crypto-assets based on preference.
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