Kriptoks

Saffron is revolutionizing the way on-chain assets are managed by introducing a protocol that tokenizes these assets, giving liquidity providers greater access to their underlying collateral and more control over their staking and risk management.

Peer-to-Peer Risk Exchange

Traditional decentralized earning platforms present numerous risks to liquidity providers, as the outcomes of code-driven systems can be difficult to predict. The possibility of large losses, market volatility, and economic attacks leave liquidity providers in a vulnerable position. Saffron offers a solution to this problem by offering dynamic exposure that narrows down the range of possible outcomes and gives liquidity providers greater control over their risk.

Dynamic Exposure

Saffron's first application gives liquidity providers the ability to choose from customized risk and return profiles using Saffron pool tranches. These tranches separate the future earnings stream from the utilized principal in each tranche. Earnings are then distributed to all tranches through a payback waterfall system, which is based on tokenized holdings.

Payback Waterfall

The payback waterfall system is divided into two main tranches: a yield-enhanced "A" tranche and a risk-mitigated super-senior "AA" tranche. When liquidity is removed, the initial principal of AA holders is paid back first, followed by the principal and interest of the yield-enhanced A tranche. Participants in the A tranche must stake Saffron's native tokens (SFI) to mitigate against failures on underlying platforms like Compound, Aave, or Curve. The Saffron protocol acts as an escrow service, transferring risk between A tranche participants and AA tranche participants. The protocol also features an "S" tranche that allocates liquidity efficiently based on a tranche balancing algorithm.

Saffron is a pioneering protocol that has disrupted the traditional centralized finance model with its innovative tokenization approach. The protocol allows for the tokenization of on-chain assets, including contracts that were previously difficult to access, giving liquidity providers the ability to leverage their staking and manage their risk with greater ease. The dynamic exposure offered by Saffron narrows down the set of possible outcomes and gives liquidity providers the power to choose their preferred risk and return profiles.