Tranche Finance, a decentralized protocol for maximizing returns and minimizing risk – allowing users to plug into existing DeFi protocols at their preferred risk/return levels – has deployed its Crypto Collateralized Debt Obligation (Cypto-CDOs) solution on the Fantom Network.
Tranche introduces debt seniority to DeFi. The protocol integrates with any interest accrual token, such as Compound’s cTokens and AAVE’s aTokens, to generate two new interest-bearing instruments – a low-risk senior tranche with a fixed rate (Tranche A), and a high-risk junior tranche with a variable rate (Tranche B).
By integrating with Yearn on Fantom, the team is hoping to achieve double-digit APYs on their junior tranches (Tranche B), while providing senior tranche (Tranche A) holders with steady, protected, fixed-rate returns.
Given that Tranche’s mission is to “serve a $SLICE of DeFi to everyone”, users seeking higher returns can deposit into junior tranches (Tranche B), while users seeking stable low-risk returns can deposit into senior tranches (Tranche A). Currently, users can forgo the compound return of 7.85% in preference to a higher return, 43.2% on Tranche B, or a fixed-rate return of 1.14$ on Tranche A.
While the project is still early-stage, crypto-CDOs showcase a lot of promise. The Tranche mechanism can be applied to a wide-range of DeFi protocols and applications. This is why we believe the Tranche Protocol is the #future_of_france.
About Tranche Finance
Learn more about Tranche at https://tranche.finance/
Twitter – https://twitter.com/TrancheFinance
Discord – https://discord.com/invite/Nv44PTdF3K
Medium – https://tranchefinance.medium.com/