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Saffron Weekly (7/28/21)

What’s new in the week of 7/28/21–8/03/21.

Last week Bitcoin dipped below 30k, this week Bitcoin broke 40k. Nothing like some crazy volatility to keep your head on a swivel! In all seriousness, if you’re feeling whiplash from sudden price fluctuation you’re not alone, there was a massive short squeeze that happened late Sunday night that caused this meteoric rise. We’ve seen altcoins pump a little in response, but I have a feeling we haven’t seen the full extent of this yet — I feel that August is going to be a pretty crazy month. This week we’re concluding our V2 preview series, taking a look at the latest Saffron Academy Podcast episode, and have an important message for our community.

Saffron Series Preview: V2 Behind The Scenes

Last week we took a look at the roadmap for Saffron V2, and this week we’re concluding this three part series by summarizing some of the more technical aspects of V2 and giving a behind the scenes look as to why we placed priority on the features that we did.

Perpetual staking was prioritized because it was identified as the biggest pain point for our users. But why did it take until now to start getting implemented? The way we built our V1 mechanism meant that yield was calculated at a predictable rate — once every two week period (aka once every epoch). In the initial rollout of V1 in November, staking and restaking after every epoch wasn’t prohibitive from a cost perspective because gas fees were minuscule. However as the bull run began, starting from January onward it became a big prohibiting factor and kept users from engaging with our protocol. Naturally, we wanted to tackle this first and we will the SFI Staking pool implement this new, perpetual staking mechanism as it’s easier to roll out compared to the tranche based offerings that we have. The market rate pools, fixed interest rate pools, and others are all small derivations of our tranche based system set up and are more mathematically complex — as these all deal with multiple assets that have fluctuating yield that’s independent from one another.

To peel back the curtain slightly, each epoch is set up like an accounting period — similar to how banks calculate interest rates internally. Having a fixed accounting period makes the math a lot easier, which was the origination of our epoch system — however, as outlined above this was becoming untenable with gas fees getting more and more expensive. With perpetual contracts for these tranche based pools, the math gets a little more complex. We have to introduce the idea of creating accumulators — and we’ve come up with a mechanism that allows interest to be calculated essentially with every block that’s created on Ethereum. What this means for the user is that you’ll be able to make a deposit into one of our tranche based pools for an indefinite amount of time, and when you go to withdrawal the correct amount of interest will be withdrawn simultaneously when you redeem.

For the tranche based pools, the act of modeling the math was a bit of a challenge because we needed to have the idea, the model, and some effective way to test that model. The testing period of this — using simulations and mock data to predict results — was one that needed a lot of effort invested into before we could even begin to publicly narrow down a release window. This naturally lead to us hiring a research team to model what our engineers have developed and test it from the academic approach. As of this writing, this team is in the process of testing and mathematically scrutinizing all the aspects of V2 to make sure that they come out in the best state possible for our users. This same team will be the ones authoring our V2 whitepaper.

As the first mover in DeFi tranche based risk management, we’ve had the fortune of being able to grab attention and cultivate an amazing community, but we’ve also had to face challenges head-on of being in uncharted territory. Our greatest challenge was getting translating our ideas for V2 into a testable model that we can take a look at and examine — and it’s safe to say that the initial scope of V2 has grown exponentially since it was first announced, partly due to the surprise I alluded to last week. During V2 development, Saffron Finance identified another weak area in the DeFi market space and we thought it would be useful for SFI holders to get this implemented into V2. Obviously I can’t go into any more detail about it today than I could last Wednesday, but we will have more information to share in the future.

It’s been a long time coming and we’re finally in the home stretch, and I wanted to thank you all for your continued patience and understanding while we roll these new features out. As the first mover working on a revolutionary new product and building a new ecosystem — the likes of which has not been seen in DeFi before — there is no set playbook for what we’re attempting to do. If anything we are inadvertently helping author it as we run into triumphs and pitfalls along the way — but in the end I think that you will be more than glad that you have been on this journey with us. We’ll announce the official release date of our perpetual staking pool soon.

Saffron Academy Podcast

Tomorrow, Zack sits down with Hamzah Khan — head of DeFi at Polygon (formerly MATIC) — for the Saffron Academy Podcast! They talk about what DeFi will look like going forward, the importance of institutional capital vs retail investors, how Polygon is tackling the issue of scalability in blockchain technology, and more. They also get into Polygon Gaming Studios and how they are using NFT and blockchain technology to improve and advance the gaming experience. It’s going to be a great listen, so make sure to check it out when it releases tomorrow at 12pm EST on iTunes and Spotify.

Beware of Imposter Groups

We haven’t had one of these messages in a while, but over the past few weeks I’ve received quite a few DMs from people about a influx of Saffron imposter groups. We do not have an official Indonesian Telegram group — the only official Telegram group we have is the one that is linked at the bottom of every Weekly — . The one exception to this rule is that we have an unofficial group called Saffron Soldiers meant for price discussion and speculation — but we do not run any promotions through there, nor do we offer any kind of troubleshooting assistance. All users need to go through the main Telegram group for assistance. If you ever have any doubts or questions about the legitimacy of a Telegram group, please ask in the chat there or DM me.

We try reporting these imposter groups and encourage our users to do so as well, but Telegram isn’t exactly the quickest when it comes to taking disciplinary action. It ultimately falls to each individual user to educate themselves and be the custodian of their own wallet. This is incredibly important to keep in mind going forward, especially as Saffron begins to pick up momentum with V2.

As always you are responsible for your own funds so please be careful on where you send your tokens to. No one on the Saffron team will DM you first and we will NEVER ask for your seed phrase (nor should you ever give that away to anyone) or for you to send us money. Period. As a general rule of thumb if it sounds too good to be true, it usually is. Please take care of yourself and protect your funds!

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Saffron is a peer to peer risk exchange and decentralized risk arbitrage marketplace.

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