Saffron

Saffron.finance is a decentralized finance (DeFi) protocol operating on the Ethereum blockchain, launched in October 2020 by its pseudonymous founder, 'Psykeeper'. Psykeeper, described as a crypto veteran with a background in traditional finance and engineering, conceptualized Saffron as a peer-to-peer risk exchange. The platform's introduction on October 31, 2020, was followed by the deployment of its smart contracts on the Ethereum mainnet on November 1, 2020. A key milestone was reached in March 2021 when the project secured funding from Dragonfly Capital.

The core business of Saffron.finance is to provide a platform for tokenizing on-chain assets, thereby offering liquidity providers customizable risk and return profiles. It acts as an intermediary between these providers and various lending protocols. The protocol's main product revolves around a tranche system, which segments liquidity pools into different risk levels (e.g., senior 'AA' and junior 'A' tranches). Users, primarily individual investors and liquidity providers in the DeFi space, can select a tranche that aligns with their risk appetite. Those in lower-risk tranches receive lower, but more protected, returns, while those in higher-risk tranches are exposed to greater potential returns and risks. Revenue is generated from transaction fees associated with liquidity provision within these tranches.

The platform's native utility token, SFI, is integral to its ecosystem. It is used for staking, which is required to access certain tranches, and for participating in the protocol's governance, which is community-driven. The protocol operates on a two-week epoch system; at the end of each epoch, liquidity providers can withdraw their initial assets along with earned interest. By tokenizing ownership of on-chain assets, Saffron.finance allows for greater flexibility, enabling leveraged staking and customized risk management for its users.

Keywords: Saffron.finance, SFI, decentralized finance, DeFi, risk tranching, liquidity provider, yield farming, peer-to-peer risk exchange, tokenization, Ethereum blockchain, Psykeeper, asset collateralization, crypto lending, dynamic exposure, smart contracts, governance token, staking, payback waterfall, liquidity pools, Dragonfly Capital