Formation FI A Beast In the DeFi Space For Long Term Gains Reviewed!
Losing money is painful. Being rekt is even more painful. Crypto is volatile, we all know this. So we should just get used to it, learn from our mistakes and hopefully not get shakin out. Right? There must be a better way!
I love telling my buddies about my gains in crypto, but losses, well, not so much. I mean, not as bad as the gambler who is in love with the Casino and only ever talks about their winnings. We know you lost at some point and tell the whole story, like when you won $5k… how much did you lose first? How much did you throwback on the roulette table and lose? In crypto, we essentially are the house if we are doing our research thoroughly (DYOR!), but what I’m getting at is, our gains and holdings are as important to discuss as our losses. Let’s get real. We all experience losses at some point or another. Formation Finance brings risk mitigation to crypto.
$FORM Token went live on both the Binance Smart Chain and Ethereum Network on June 18th, 2021.
What does Formation Finance do exactly?
Formation.Fi uses algorithmic predictive intelligence to help investors find the best investing pools for their personal tastes. Gamify your yield farming experience and maintain your portfolio via a risk-parity protocol. With Formation.Fi you can make juicy yields even in the most bearish of bear markets. Got your attention? Well, the market is on its way up, but we’ll save that discussion for another time 😊
The four classes of cross-chain yield-farming include ALPHA, BETA, GAMMA and $FORM. Before we get into the $FORM token, we’ll first discuss ALPHA, BETA and GAMMA yield-farming strategies. The Raging Bull ALPHA is the riskiest but where people will go for potentially the highest APY. The Web3 Formation BETA has moderate risk and moderate rewards attached to it. The Fixed Income GAMMA is where the conservative investor will go as it is where the lowest risk and lowest rewards are. Investors may want to balance their portfolio between all 3 pools, using the examples on the chart below, and then add leverage for some nice and juicy APY while managing their risk.
For the more ‘techy’ reader, Formation.Fi explains their product this way: “Risk Parity Protocol’s systematic architecture constructs risk adjusted parameters to optimize the return to risk ratio for each unit of risk. Through prioritizing secular diversification, the risk parity rebalancing mechanism sorts smart-asset allocation by pairing countertrend assets. This allows for iso-diversification construction to occur within our index coins to minimize risk fluctuations at a fundamental level — as it can detect levels of asset behaviors. Risk Parity Protocol rethinks and restructures how we interact with risks and it outperforms the most popular financially engineered strategies.”
The Anatomy of Formation.FI’s Triple Utility
Now to the $FORM Token… $FORM is a governance token with reward. Simply put, it provides a right to vote and future income to its holders who stake their assets. While such functionality is nothing new in DeFi, I’d like to bring your attention to the specific combination of three utilities which make $FORM unique.
GOVERNANCE: $FORM token holders will be able to vote on many issues related to the critical functioning of the ecosystem, such as approving budgets, new partnership proposals, and changing certain parameters of monetary policy. Because Formation FI executes on the idea of Progressive Decentralization the DAO governance structure will be deployed over time on a step-by-step basis. An explanation of Progressive Decentralization will be available in a future Medium post from FormationFI but what we know now is the following; their DAO will achieve open governance by financially incentivising long-term engagement and offering exclusive original research and quantitative analysis.
REWARD: $FORM token holders will receive rewards in $FORM when they provide liquidity to the ALPHA, BETA, GAMMA, and PARITY indices. A full 50% of the revenue collected through the protocol will be distributed proportionally to $FORM token holders who provide the liquidity. The other 50% will go to the Operational Treasury until the weekly maximum is reached, after which all excess profit will be burned as a deflationary measure. (Token holder profit will never be burned.)
SPECIAL MEMBERSHIP TO DARK POOLS: $FORM will offer its holders special member-only access to secret liquidity generation pools which harness the wisdom of the crowd to incubate and fund the most promising new DeFi projects. We don’t know a lot about these Dark Pools yet, other than, “Details will be revealed to those who posess the ability to recognize its power”. Oooooo you have my attention 😊
The tokenomics are clear, and you may notice what I noticed right away with the 25% of the tokens being distributed to the Team. This is typically higher then I like but their team is huge, and their tokens are being vested over 4 years so it’s fair in my mind.
To summarize this all and highlight the main point of Formation Finance… The best fund managing strategies are only available to large fund managers, governments, pension funds, corporate funds and other large institutions — they aren’t available to everyone. Well, this is what Formation Finance is building — a platform where anyone can easily participate in the best fund management strategies with only a few clicks. If the massive team at Formation Finance can pull this off, we’ll all be managing risk better than ever before
That’s all for now. Till the next Medium, you’re on your own. Laterrrrr.
