FODL Finance is an Ethereum-based decentralized finance protocol that enables users to enter leveraged trades without paying funding rates. With FODL Finance, you can open long, short, and correlated trading positions. FODL is the name and ticker of FODL Finance's native ERC-20 token.
In place of a funding rate, with FODL Finance, users can leverage their position using collateralized assets from existing DeFi protocols like Compound and AAVE. In this way, FODL Finance eliminates the hefty funding rates and provides a low-cost way to secure leverage.
To achieve a funding rate-free leverage, FODL Finance uses a cross-asset yield folding mechanism where the protocol borrows cryptocurrency against collateral from a decentralized lending platform. It then re-deposits this borrowed sum as additional collateral and takes out a new loan in another cryptocurrency. This process is repeated until the desired leverage is achieved.
The risk of asset liquidation in case the market moves against the position, and the fees involved in executing too many swaps are current limitations of such a complex yield folding strategy. FODL Finance combats these two issues using smart contract bots and flash loans. Smart contract bots close the position before the liquidation occurs, and flash loans bundle all the swaps of a cross-asset fold into a single transaction.
FODL tokens serve as the native governance token of the FODL Finance DAO and distribute rewards to platform users and liquidity providers. In addition, FODL also acts as a utility token for evenly distributing platform revenue by purchasing FODL tokens from decentralized liquidity pools. The project is secured by Quantstamp.
FODL price and tokenomics
FODL has a total supply of 1 billion tokens. The LP and LP staking rewards will be locked for six months.
About the founders
FODL Finance announced its beta launch in October. 11, 2021. The decentralized leverage trading platform is built by the 0xb1 team.
