Feeder Finance
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Feeder Finance

Introducing Feeder Finance — DeFi Aggregator for Diversified Yield Generation

TL;DR

  • Feeder Finance is an automated protocol for optimizing profits while reducing risks across multiple DeFi protocols and products
  • Users will be able to earn passive income from their tokens (ie. BNB, BUSD, USDT, etc) using single deposits across multiple target locations, spreading out risks, and optimizing returns
  • Our team goal is to build a simplified investing experience through DeFi product construction — A Macro Approach

Feeder Finance Summary

  • Feeder Finance aims to provide passive and diversified yield aggregation solutions for DeFi investors
  • Our model makes assumptions and runs on the two principles that should be clear to anyone with a finance or economics background: 1) The Efficient Market Hypothesis, and 2) Random Walk Hypothesis
  • Our first product will focus on a so-called vault of vaults that rebalances regularly based on simple but powerful formulas based on TVL and a variable allocation for weighting into targets with APY outperformance and vice versa (“overweight” and “underweight”) — Feeder Finance does not aim to reinvent the wheel, simply create a simple and useful product for passively-minded investors for the long-term
  • We adopt the concept of real-world “Feeder Funds” (also known as “fund of funds”) and apply it to DeFi supporting the best capital allocators (Vaults, Liquidity Pools, and perhaps more…) within the DeFi ecosystem
  • Our Tokenomics is set on three fundamental value driver for $FEED: 1) DEMAND from the usage of the protocol through liquidity pool buying, 2) UTILITY in a sense that the native token is required (fees) for usage of the protocol, and 3) CASHFLOWS through the distribution of profit sharing contribution
  • The total supply will be 100 million tokens and farming distribution can be found in this Medium (below) or at our docs.
  • All current and future codes are included in the coverage report in our docs; while initially audited internally (beta-phase)by test codes, we’ve currently engaged CertiK for the deployed contracts auditing and PeckShield for the 1st product audit
  • We encourage you to join our community at https://t.me/FeederFinance and get to know us and our project. The protocol is aimed at a like-minded community of DeFi investors and we’d love to get your feedback and ideas.

Brief Introduction

Feeder Finance is a DeFi aggregator for diversified yield generation on Binance Smart Chain (“BSC”). Feeder aims to allow investors to feed capital into lending protocols, liquidity pools, vaults, and other DeFi products in an automated and diversified process — A single deposit with macro exposure.

Feeder Finance Expected Product Diagram

‌Background

Prudent investors look for ways to manage risk while earning yields effectively. At this point (Q2–2021), many dozens of DeFi protocols have been launched on BSC, within it, hundreds of investment options that are ever-growing. Maintaining a diversified portfolio, not to mention keeping up with the changes, in yields and products, requires a substantial amount of time and effort, something some investors enjoy, while others look for ways to automate the process. Feeder Finance aims to simplify this process by taking a macro approach through product construction.

What is Feeder Finance?

As DeFi evolves, it is likely that more and more unique yield generating products will emerge, however at this juncture, two main yield generating products stand out: 1) Liquidity Pools/Farms and 2) Vaults/Lending. Acting a lot like a real-world feeder fund, we call this “Feed”, capital is invested by the investor through an intermediary, in this case, Feeder Finance, to efficiently automate yields generation. Essentially for a fee, Feeder provides a platform for simplified diversification and automation, enabling easy allocation of capital into desired end-products.‌

Automation and Diversification Mechanics‌

The automation and diversification mechanics is based on a very simple yet widely regarded assumption. The market as a whole, is the best allocator of capital (aka “Efficient Market Hypothesis”). Hundreds of thousands of BSC users make decisions about where, and how much of their capital to invest. While not all users agree, in aggregate, and over time, they form an efficient consensus about risks and rewards.‌ To overweight and underweight an allocation, we refrain from making predictions and rely on the Random Walk Hypothesis; which, put simply, states that the best predictor of tomorrow’s returns is yesterday’s returns. The product will aim to base allocation on target assets/products TVL and apply an overweight and underweight allocation to optimize for improved APY.

Each of Feeder Finance’s products will cover a select list of products or protocols and use a formula to decide how to allocate among the covered products and when to rebalance. The factors driving decisions are:‌

  • Total Value Locked (TVL)
  • Last Period APY
  • Protocol Fees
  • Rebalance Thresholds

Think about Feeder Finance products as a Smart ETF. While not 100% passive, it makes minor tweaks to optimize. As a whole, investors are receiving what closely represents the market return; while lowering risk through diversification.

Tokenomics

As a project, we’ve designed our products wrapped around the concept of creating utilities and demand for the FEED token. Which ultimately brings benefits to FEED holders and its community.

Feeder Finance Tokenomics

Fees on Feeder Finance platforms can be broken down into three pieces:

Entry Fees — 0.1% on Deposit

Destination: Governance Treasury

Users pay an entry fee of 0.1% of deposit. These fees are in their deposit token and will be used to buy FEED on the open market and deposit into the Governance Treasury wallet. This will ultimately be managed by the community.

Objective:

  • To create DEMAND for our native token that correlates with the usage of the protocol
  • To create UTILITY that drives part of $FEED intrinsic value

Exit Fees — 0.1% on Withdrawal

Destination: Developer Wallet

Users pay a withdrawal fee of 0.1% on their withdrawal amount.

Objective:

  • To pay for GAS FEES that the smart contracts need to run on
  • To support DEVELOPMENT and MAINTENANCE of the platform
  • To support any other INITIATIVES for future products that may require advisors or partnerships

Profit-Sharing — 5% of Profits

Users contribute 5% of returns over investment amount (profits) to the community and for continued development; we call this profit sharing.

Destinations

  • 3.5% to Staking Pool
  • 1.5% to Developer Wallet

Objectives:

  • Staking Pool: As the project becomes more popular, FEED stakers benefit from CASHFLOWS generated by usage of the protocol; further driving value of the native token
  • Developer Wallet: The main purpose of the developer wallet is to drive Development and act as a SAFETY net in extreme events.

Farming and Distribution

Feeder.finance starts with 31,750,000 FEED distributed to Treasury (5,000,000 $FEED are used to provide initial liquidity on PancakeSwap) and the remaining 26,750,000 $FEED are time-locked and released according to schedule for Team, Marketing, and Developer wallets.

The remaining 68,250,000 FEED of supply will be distributed at a decelerating rate through distributions.

The total FEED distribution is broken down as below:

$FEED Total Supply Distribution Breakdown

The total period from minting to complete distribution will happen over 65 weeks (~17 months)

$FEED Distribution Schedule Chart
$FEED Distribution Schedule Chart

Mechanics‌

  • Farm Harvest Fee: 7% of Reward Earned
  • 5% goes to Developer Wallet for on-going development and associated costs
  • 2% goes to Insurance Wallet which will be used for reserves

Farm and Staking Pool Withdrawal Fee: 5% of Staking/Farming Token

  • 100% goes back to the community (as Staking Pool APY)
  • The LP will be broken down and used to buy back FEED from the market and deposited to staking pool.‌

Farming & Staking APY Split

  • Greater distribution will be allocated to LP Farm to compensate for potential impermanent loss (“IL”) and greater capital needs to participate, ie.: BNB on the other side.
  • As of latest (June 2021) the distribution is 70% Farm / 30% Pool
  • Stakers, on the other hand, will benefit from above fees collected on top of FEED distribution in the long run.
  • After 100,000,000 FEED have been distributed. We’ll revisit the Fee split to make sure our liquidity pool remains sufficiently liquid, but it is too early to make a decision on this now.‌

Team and Governance‌

The project is led by an experienced full-stack developer, a successful online marketing professional, and a finance industry professional. The inspiration for the launch of Feeder Finance came down to a quest to find ways to automate investing in DeFi and failing. As participants of various crypto communities, the team recognizes communities’ importance for long-term success. Ultimately, Feeder Finance will be governed by FEED holders. The goal is to launch core products and hand the governance over.‌

Why Binance Smart Chain (BSC)?‌

Very simple, to be able to diversify, speed and transaction cost is vital. While Feed Finance may explore expansion to allow investors access to products on other networks, Ethereum for instance, it will be decided and implemented once the core base is complete and ready.

Tests and Audits

As an experienced full-stack software development company, we understand the importance of security. To ensure that the contracts are doing what is intended without bugs, errors, or vulnerabilities, we have done internal audits at the launch phase by scenario testing it with automated test scenarios to simulate actions and events at certain blocks or times.

All test codes can be found on our GitHub repository and can be forked to perform a repo and run tests against to verify the results.

Our tests are included in the coverage report (percentage of code covered by automated tests). The coverage and tests report is published in our docs.

All codes are currently undergoing audits. Deployed contracts audited by CertiK with preliminary report having shown no critical or major issues. The first product is presently being audited by PeckShield and is expected to be released by the end of June 2021.

Find us at:

Feeder Finance reimagines the DeFi journey with a simplified user experience, multichain vault aggregation, on-platform swapping tools, and much more — Think less, Earn more.

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