LTO: Protocol f(x)

Projects you should know. From the teams themselves.

Project Name

Protocol f(x) (Built by AladdinDAO)

Written by: Kmets the Great

Neighborhood

Mainnet

Socials

@protocol_fx on X

Describe Your Project

Protocol f(x) is a defi primitive that splits assets into two tokens: one is a low volatility token (f-tokens) that serves as a stablecoin, and the other is a high volatility token (x-tokens) that acts as a zero funding, no liquidation leveraged version of the base asset.  By staking the stablecoins into the protocol’s stability pools, users can earn very high yields from the reserve asset, plus FXN token emissions.

Why is this important?

Protocol f(x) is revolutionary as it creates a way for users to have a stable position and still collect the yields of the base asset.  The stablecoins have effectively solved the stablecoin trilemma, as they are perfectly pegged, fully decentralized, and inherit all of the liquidity from the reserve asset.   Additionally, the zero funding, no liquidation x-tokens are the first of their kind in defi, and allow users to take a very bullish position on the underlying reserve asset, like ETH or BTC, while not having to worry about funding costs or threat of liquidation.  You can almost think of them as an improved version of holding a spot position.  Both of these primitives allow users to modulate their exposure to the base assets in unique ways that are not widely available elsewhere in defi.

Besides your project, what are you excited about / watching right now?

Obviously, as a Convex and CLever Maxi, I am very excited about Asymmetry Finance.  They have tokenized one of CLever’s strategies in the form of afCVX and created a leveraged version of vlCVX that has no threat of liquidation and yields about 1.5x that of normal vlCVX bribe yields…pretty great!  They also have a few more tricks up their sleeves to ramp that yield up even more. 👀

Also, outside of defi, I am really interested in Facet.  Facet is the first “based sovereign rollup” that actually lives on mainnet…no centralized sequencers!  It’s is almost like a Layer 1.5, in that the compute for contract logic that is done by the validators on mainnet are done off-chain, but the result of the transaction is actually pushed through to mainnet contracts via calldata.  It’s a very unique solution that helps scale Ethereum in a maximally decentralized and secure manner.

What will the greater landscape of onchain finance look like in 18 months?

18 months from now I think everyone will be stunned at the growth of the market capitalization of the entire stablecoin space and crypto in general.  Stablecoin payments via mobile phone will start to become a legitimate method of transferring value.  I also think no matter who wins the US presidential election, favorable legislation and regulation will be working to advance crypto not only in the US but across the entire globe.  Honestly, I’ve never been more excited about the potential of defi and crypto as I am now.