Friktion was sunset on Jan 25, 2023.
Friktion was a decentralized yield optimizer built on Solana. Its vaults automate complex strategies like automated hedging or options selling.
Friktion provides five options strategies that are suitable for different market conditions, including covered call, cash secured put, range-bound, delta neutral, and capital protection. These strategies execute weekly and bi-weekly options contracts for a variety of crypto assets. Each strategy vault, or Volt, is time locked, which means deposited funds can only be removed as the weekly options expire and before the following week's contract begins. These cycles are called epochs and range between 1 to 2 weeks depending on the asset or strategy. Users who deposit into a Volt receive fTokens in return which represent your share of ownership in the Volt.
Friktion Volts use a fee structure that mutually aligns incentives between users and the platform. The platform charges a 10% to 15% fee on profitable positions and a 0.1% fee on withdrawals (on deposit value). In this set up, the user relies on Friktion to select an ideal strike price each week to create a profitable position. And Friktion is incentivized to properly manage risk as they only earn fees when the vault makes a profit. Some Volts also charge an annualized execution fee of 0.5% to 1% per epoch.
You can generate yield by depositing assets into Friktion's Volts to collect option premiums. For more advanced DeFi users, you can leverage the protocol's other option strategies to generate yield based on your market outlook, whether range-bound, delta-neutral or volatile markets.