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.

Options

Friktion

Protocol Code Quality

Protocol Maturity

Protocol Design

Risk Rating

Watch Out

* [Documentation](https://docs.friktion.fi/) 
 * Auditors 
 	* [Kudelski](https://files.gitbook.com/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MkpFbZXX5YhImPUVLlg%2Fuploads%2FeIRs0wqbPRMDBcP4qZQR%2FKudelski_Friktion_Security_Assessment_code.pdf?alt=media&token=35408fa3-56de-4268-9808-f7dd6d591cca&utm_campaign=friktion_audit_1) 
 * Please see our [FAQ on experienced auditors](https://help.exponential.fi/en/articles/6381015-what-are-experienced-auditors)

Exploit/Hacks

green

None

* [Website](https://friktion.fi/)  
 * Tags: Options

Info

* TVL: $5.1M (Rank #133)  
 * TVL Ranking by Options: #5  
 * Blockchain: Solana  
 * Chain TVL  
 	* Solana: $5.1M

Key Metrics

Information


- Code reviewed by at least one experienced auditor; [Kudelski](https://files.gitbook.com/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MkpFbZXX5YhImPUVLlg%2Fuploads%2FeIRs0wqbPRMDBcP4qZQR%2FKudelski_Friktion_Security_Assessment_code.pdf?alt=media&token=35408fa3-56de-4268-9808-f7dd6d591cca&utm_campaign=friktion_audit_1) audited in May 2022
- Public team promotes accountability
- No documented protocol hacks since launch
- Basic controls to prevent oracle price manipulation

yellow


- Core protocol launched in 2021; maturity less than 1 year increases technical risk as smart contracts are less battle-tested
- Top 10% by total value locked reduces risk
- Centralized governance increases risk
- No governance token and/or contracts are fully immutable

Risk Assessment

Friktion's option vaults (Volts) help investors make directional bets on assets without requiring specific technical knowledge.

What we like

Friktion currently has no timelock or governance process used to secure program upgrades, and there is not yet a public token to facilitate governance decisions.

What we like less

Offers you offensive and defensive strategies through decentralized options to help you earn recurring yield and hedge your investments.

What it means for you

Summary

#### How Friktion works
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.
#### How Friktion makes money
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.
#### How you make money on Friktion
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.