Strategies

Yield Based Debt Alchemix Finance pioneered the idea of combining yield aggregators (e.g. Yield Finance) with collateral-based debt (e.g. Compound). Instead of paying interest on over collateralized loans, why not use the interest earned elsewhere on that collateral to pay off the debt over time? The execution of this simple idea has been a hit among the DeFi community — this is a clear improvement over previous DeFi interest-bearing loans.

Flash Loans Popularized by Aave, this form of lending is exclusive to only DeFi. Flash loans are instantaneous and unsecured, enabled by a smart contract code that reverses a lending transaction if the borrower is unable to fulfill borrowing obligations. Their use cases cover arbitrage, liquidation, and so on.

CHRFY CHFRY enhances previously proposed frameworks and introduces a platform that combines flash loans with the yield based debt model. CHFRY unlocks capital efficiency by combining yield aggregators with the yield-based debt model and diversifies the yield source by tapping into the potential of the flash loan applications.

As such, users can mint up to 50% of their deposited amount in the form of fUSD, while their deposited assets (DAI/USDC/USDT) are put to work to earn yield and pay off the loan. In order to diversify the sources of yield (a) 20% of the base asset is set aside as collateral for flash loans, and (b) the remaining 80% is deposited to YFI or Curve yield pools to gain reward. (This weight (%) can be modified by CHFRY DAO's proposal in the future).

Vault depositors earn fees on flash loans, which go toward the maturing of debt positions, along with the harvested yields. Flash Fryer fees provide a natural hedge against scenarios whereby DeFi aggregator yields come down — while maintaining the integrity of vault deposits. Consequently, CHFRY creates uncorrelated high yield strategies for its users, which means that the debt repayments can't be interrupted by market fluctuations.