Edmond Truong, co-founder of cross-chain Defi revenue aggregator Formation.fi, spoke to RulyAMA about how to find the optimal strategy for multi-chain aggregators. Pancake and Uniswap will be available on its Token Form, and it plans to launch a centralized trading platform.
Edmond Truong:Having worked in traditional finance before, I got into blockchain with the Harmony Protocol in 2019. Then I began to explore more deeply the limitless opportunities in the blockchain space. This led me to start my first DEFI project, which involved cross-border transactions and partnering with Kraken, Galaxy Digital, Huobi and many of these major overseas deals OTC. Soon after that came Formation, which eventually spread to the community.
Edmond Truong:Formation Fi's main core tenet is to consider and analyze risk. If we look at the current market, there is currently no high-yield DEFI yield product that successfully addresses or even resolves the risk. But we are bringing to DEFI ahead of time, through our core principles of risk parity, the tried and true fundamentals that will be used on traditional Wall Street for 10 to 15 years.
Formation Fi is building a portfolio with a high degree of composability across major blockchain networks by introducing a risk-adjusted portfolio of decentralized financial crypto assets in the form of algorithmic rebase indices and using the basic principles of the risk parity movement.
Edmond Truong:There are definitely a lot of problems with the current Defi aggregators. The platforms currently on the market don't address any of these huge risk issues, and wherever you go, they only talk about how much money you can make and hide that you can lose a lot as well.
We are creating a platform that people can easily manage, structuring risk through our systems architecture to align portfolios, optimizing risk-return for each unit of risk, and ultimately delivering returns over time. Consider an optimized hedge fund portfolio that can provide a relatively similar APY return to the user, but we will be able to minimize the user's losses during slip points and pull times.
Edmond Truong:All right.
Alpha is a cross-chain yield mining strategy with a fluidity mining program provided by the DEFI program to maximize APY. It's a highly leveraged and risky strategy.
Beta is a cross-chain themed ETF, each built specifically around the core infrastructure of Web3. No leverage and market average risk.
Gamma is based on the yield of cross-chain stablecoins that generate tokens through a top-level DEFI lending and asset management protocol that provides a fixed monthly income.
There is leverage but low risk.
Parity is a collection of cross-chain production mining strategies that are weighed and optimized against the risks of environmental change. There is leverage but the risk is manageable.
Edmond Truong:The Alpha and Beta versions are very different. Alpha will be primarily driven by liquid mining, rewards and LP tokens with a high APY. The key strategy is to maximize returns but offset certain volatility risks. We can also think of Beta as an ETF-like product. Similar to what I said earlier, these ETFs will be built specifically around the core infrastructure building blocks of Web3.
Edmond Truong:Risk is a measure of price volatility. We will measure the APY standard deviation over time. This will be done exclusively by our in-house quantifiers and mathematicians and will be a way to really understand the correlation matrix of contrast assets.
Edmond Truong:The current weighting between ERC, BSC and HECO is currently in a somewhat arbitrary state (for illustrative purposes only). However, statistical decisions will be made based on the correlation of R running on the chain
Edmond Truong:Bridgewater's all-weather strategy is interesting because it hedges portfolio risk through inflation, deflation and basically all market conditions. We believe this is definitely something that DEFI needs because there are a lot of people who have made a lot of money and are looking for specific ways to protect their assets and still get an attractive ROI.
Edmond Truong:Our utility token FORM is not just a token but also has three functions:
1. Form tokens give their holders voting rights
2. A portion of the future net income generated by the Agreement
3. Exclusive access to the secret Dark Pool, accessible only to members of the Formation.Fi ecosystem.
We really believe that the community will love these things because it will allow them a lot of different ways to get rewarded and ultimately make money by being part of our ecosystem. I strongly encourage you to read the article that explains what our tokens do.
Edmond Truong:The traditional high-yield DEFI mining method is to pick each individual LP token and high-yield pool separately. It takes too long to pledge and cancel the pledge. Formation users will have our index tokens, which are basically made up of 50-60 different monetization mining strategies, and maybe 80-100 different types of LP tokens across multiple chains.
Formation reduces the barriers to entry caused by the complexity of Defi for users, and has many other benefits, such as the ability to get the best strategy, no longer having to jump from chain to chain (which can be expensive if you move less money), and so on.
I believe that multi-chain is absolutely necessary for the long term sustainability of the industry. It gives users access to a whole new dimension for new opportunities. Besides, it is more practical. Because users don't have to continue and jump from one chain to the next and be deterred by the cost or waste valuable time.
Edmond Truong:Our future plan is that V1 will be launched from the ERC mainnet and BSC around the end of Q2 to early Q3 and will be released with a custom bridge with a dedicated bridge. Then at the end of Q3 to the beginning of Q4, we'll add L2 (probably Polygon) and HECO and use a custom bridge between them to connect them to the ERC mainnet and the BSC.
After DAO Maker's SHO/IDO, we are about to officially launch Form Token. We have a record number of registrations in DAO Maker and the order for SHO is $45 million (DAO+USDC), which is 200 times oversubscribed.
In the final community Q&A, Edmond Truong revealed that Pancake and Uniswap, as well as a centralized trading platform, will be available, but can't say which one yet.
律动 BlockBeats 提醒，根据银保监会等五部门于 2018 年 8 月发布《关于防范以「虚拟货币」「区块链」名义进行非法集资的风险提示》的文件，请广大公众理性看待区块链，不要盲目相信天花乱坠的承诺，树立正确的货币观念和投资理念，切实提高风险意识；对发现的违法犯罪线索，可积极向有关部门举报反映。