Pools

The fdo.one system consists of pools of liquidity. Pools in fdo.one collect deposited base assets from liquidity providers and deploy them on platforms to earn interest. For example, the first Fiducia DeFi Online pool is the DAI pool, which launched with a DAI/Compound adapter.

Adapters

Adapters connect pooled capital to platforms. The first adapter is a DAI/Compound adapter. The DAI/Compound adapter, as its name suggests, connects the DAI pool to the Compound platform giving DAI pool LPs the opportunity to pool together and earn interest on Compound.

Strategy

The strategy connects all pools and adapters together and selects the best adapter to deploy capital to every hour for each pool. It also generates and distributes FDO tokens to LPs at the end of every epoch.

Epochs

Epochs are two week periods where liquidity is locked up and deployed to platforms by the system. At the end of an epoch it is wound down and the interest earned is calculated and can be distributed to LPs according to their proportional tranche ownership. During the wind down FDO tokens are generated and can be redeemed using the same proportional calculation used to redeem interest. In the first version of the Fiducia DeFi Online, capital is only deployed on yield farming platforms, but in later versions Fiducia DeFi Online will be able to create dynamic risk selection for LPs by adapting to different types of DeFi protocols. The first epoch (epoch 0) starts on 2020-10-31 at 14:10:00 UTC.

FDO

The FDO token is capped at 100,000 and is generated every 2 weeks during the wind down of an epoch. Tokens are earned by LPs proportional to how many dollars per second (dsec) they provided to the system for the duration of an epoch. FDO token subsidy is halved every epoch until epoch 8. From that point on, the system steadily releases 200 FDO tokens per epoch, until reaching the 100,000 cap. There are no fees on Fiducia DeFi Online in version 1. Later versions will introduce Fiducia DeFi Online platform fees, and at that time, staking FDO tokens will earn FDO holders a proportion of fees incurred by users. When FDO token generation ends fees will continue to provide incentives to liquidity providers. FDO tokens must be staked for LPs to join the enhanced return A tranche.

Tranches

Pools are divided up into tranches each with their own unique properties. There are three user-facing tranches for LPs to add liquidity into and two backend tranches that exist only at the smart contract level to provide LPs with aditional optionality when adding liquidity. The risky, high interest earning tranche (tranche A) earns interest according to its principal contribution multiplied by the tranche interest multiplier. The tranche interest multiplier defaults to 10. As a result, A tranche LPs earn 10x more interest than they would without fdo.one, likewise AA tranche LPs earn 1/10th of the interest they normally would.

• AA Tranche: LPs adding liquidity to the AA tranche earn less interest but are covered in the case of loss from platform risk. That covered capital comes from the principal and interest earnings of A tranche LPs. AA tranche LPs are are awarded with 80% of the FDO token generation.
• A Tranche: LPs adding liquidity to the A tranche earn more interest but lose their principal and interest earnings in case of loss from platform risk. A tranche LPs earn 10% of the FDO tokens generated per epoch. FDO earnings are not included in covering first loss for AA tranche LPs.
• S Tranche: The S tranche earns 10% of FDO generated per epoch. The system uses the S tranche to balance the A and AA tranches such that they are always in a perfect equilibrium with each other such that the tranche interest multiplier is maintained at its exact value. For example, with a tranche interest multiplier of 10, the AA:A ratio in a pool is always 10:1.