Saffron Finance

Allows users (i.e. liquidity providers) to customize and dynamically manage risk/reward exposure in the pool with which they choose to interact. The main use case for this protocol is to act as an intermediary between a liquidity provider, who can provide liquidity to a lending agreement through various SFI files, and a lending agreement. The protocol's native token, SFI, is used to access specified portions of the agreement and to manage the agreement through staking. In the upcoming V2 release, SFI holders will also be entitled to contract fees in the future.

The protocol currently provides liquidity providers with three tiers (TIER S, tier A for revenue enhancement, tier AA for risk mitigation). While the returns on tier A may be significantly higher than those on Tier AA, in order to get A higher return, tier A participants must pledge Saffron's Native Token (SFI) to mitigate the failure of the underlying lending platform (Compound or Aave). If the underlying lending platform fails, liquidity providers in the riskier tranche will be in the first position to lose money, while liquidity providers in the more senior tranche will be effectively insured. In exchange, such "insurance" liquidity providers in the senior tier receive lower returns.

The pledged SFI tokens and the assets deposited in the protocol cannot be redeemed before the end of a period of 2 weeks, Because it allows for a more accurate distribution of interest earned between batches, and ensures that premium batches are insured. After the release of V2, although there is still a lock-up time, SFI pledger and liquidity provider will not have to repledge and cancel the pledge at the end of each Epoch, it will be done automatically by the agreement.