Introducing Volt #05: Capital Protection

  • Deposit value is protected — meaning loss is limited to the interest generated. Principal value cannot fall below deposit amount (subject to lending platform risks).
  • Earn in volatile markets with systematic exposure to convex instruments such as call/put options that payout during sharp market moves.
Friktion Volt#05: Capital Protection — Payoff

Volt Flow — how is capital deployed?

  1. User deposits USDC or SOL into Volt#05 — assets will be deployed following a weekly Epoch system. The first deposit assets accepted will be USDC (a fully collateralized stablecoin pegged to the US Dollar) and SOL (Solana). The strategy will expand to a variety of assets in the future.
  2. Volt lends Deposit Asset (USDC or SOL) to generate continuous interest payments. Friktion is leveraging Tulip, Solana’s leading lending aggregator, which optimizes across utilization rate based lending platforms in which borrowers are overcollateralized.
  3. Each week (Epoch), interest earned from lending is systematically allocated to a strategy which provides Volatility Protection, in the form of a basket of call or put options. Using Channel, Friktion’s RFQ engine, this Volt access the deepest markets for options in DeFi+CeFi. During periods of elevated market volatility, the options will outperform.
Friktion Volt#05: Capital Protection — Strategy

Volt Risks

  • Borrow/lending smart contract risk: Friktion addresses this by composing with protocols that have been battle tested, audited multiple times, and are transparent with performance data.
  • Lending optimizer rebalancing logic: Tulip was carefully selected based on their rebalancing logic, risk management, and transparency. Notably, Tulip’s Strategy Vault had 0% exposure to Solend during a recent spike in pool utilization.
  • Friktion smart contract risk: Volt#01 and #02 have been audited with no critical or high severity issues found and the results are available here. Volt#05 will be unaudited software on launch.
Friktion Volt#05: Capital Protection — Risks

Exclusively for Genesis Wielders

How to Participate?

Next: Volt Launch imminent

About Friktion

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Friktion

Friktion

Friktion brings high quality portfolio management to DeFi.