Francium Protocol Review

What is Francium Protocol?

Francium is a DeFi strategy platform built on Solana. The Francium protocol provides various yield targets and multiple leveraged strategies, such as portfolio management, yield farming, and algorithmic trading strategies. 

The project was launched in July 2021 with the help of grants received from Solana and Serum. During the Solana hackathon, Francium became First Runner-Up in the East Asia category and was included in the top five most popular projects.

How does Francium Protocol work?

The Francium app offers two roles for its users. The first one is lender: they earn variable, low-risk returns on their assets by depositing them into Francium lending vaults. These assets become available to yield farmers for leveraging their positions. Lenders bear some risks, such as the asset return timing, because the platform may not have enough liquidity for them to withdraw funds until leverage farmers repay their debе (all the mainstream lending protocols such as AAVE, Compound also have such kind of inconvenience).

The second role is yield farmer: they borrow assets from Francium lending pools with a leverage up to 3x. Borrowing interest is subtracted from their total return. As it may be expected, higher yields and leverage increase volatility and potential risks, including liquidation, impermanent loss, etc. 

There is also a special role of liquidator (performed by bots only): it monitors the pool for underwater leveraged farming positions (when equity collateral becomes too low, thus approaching the risk of default) and liquidates them.

How to use Francium Protocol?

To use Francium Protocol, a wallet such as Phantom, Sollet, Coin98, Solflare, Math Wallet, Slope, or Ledger needs to be connected to the Francium Protocol app. 

On the Francium platform, users have two options. The first is leveraged farming. To deposit liquidity, the user does not need to get LP tokens, the platform automatically converts the deposited assets into LP tokens. The user will only need to select a pool and specify how many paired tokens they plan to deposit. There is also an option to deposit only one token. For example, if the user only owns POLIS and no USDC, they may deposit POLIS. Francium's smart engine will convert POLIS to a USDC/POLIS LP token. In addition, the leverage may be adjusted at 1x-3x and a stop-loss level. The second option to use the platform is to put your assets into a loan pool to earn interest.

There is no entrance/exit fee on farming or lending. For leveraged farmers, 4% of the yield reward(not including the trading fee) is taken by bots that call the reinvest function. For lenders, 10% of the borrowing interest is put into the reserve pool. While the bot help to close the position, it would charge 0.3% as a stop-loss fee. While liquidating, 5% of the position value would go to the person that calls liquidate function on underwater positions.

Is Francium Protocol safe?

The Francium Protocol team is anonymous. All Francium Protocol audits are available on the project’s dashboard on this webpage.

Partners 

Francium has partnered with Marinade —  liquidity staking protocol on Solana. They work together to provide joint incentives to the Francium mSOL lending pool.

What's next?

For 2022, the team has planned oracles integration, as well as collaboration with renowned partners to create innovative DeFi strategies. They also plan to expand the supported LP tokens and synthetic assets. In the medium term, the introduction of modular development components is planned.

Links

https://docs.francium.io/