Neo Global Development (NGD) has accepted Saffron Finance as the sixth project to join the N3 Early Adoption Program.
NGD rolled out the N3 Early Adoption Program in June of 2021. The program allocates $10 million to provide financial and other support to encourage enthusiastic, driven developers and project teams to build their technologies on the future-oriented, all-in-one Neo N3 platform.
Saffron Finance is a peer-to-peer risk management platform that uses a tranche-based yield aggregation to divide earnings into senior, junior, and fee tranches. Saffron also provides a separate insurance fund that generates yield to depositors. If there is a coverage event, assets from the junior tranche and insurance fund are used to cover the senior tranche first, then the junior tranche. Doing this allows users to select a risk profile for their deposited funds. In exchange for their lower coverage priority, junior depositors receive a higher share of the platform’s total earnings than the senior depositors do.
Saffron also has its own governance token, SFI, that is used in the Saffron ecosystem. The SFI token is primarily used by liquidity providers to gain access to higher risk tranches on the platform. To gain access to the higher-yielding tranches, liquidity providers must stake SFI tokens. Ultimately, this process is used to insure other tranches in the event of an insolvency of an underlying protocol. In addition to use for access, SFI tokens are also used to govern the protocol. Upon the release of V2, SFI holders that stake also will receive fees from the protocol.
Saffron and Neo N3
Saffron is relatively new to the Neo ecosystem, having reached out to NGD after the launch of the Neo N3 blockchain. The Saffron team is already passionate about building on Neo. The team initially plans to launch with Flamingo Finance liquidity mining. All tokens added to the Saffron pool are deployed to Flamingo and earn interest. Each Saffron pool will have tranches that either provide lower interest with increased coverage, or multiples of underlying interest with no coverage. Saffron will also introduce a reserves system (or Insurance Fund) to pools to further protect yield generation from adverse smart contract hacks, drained accounts, bugs, and errors.
Psykeeper, the founder of Saffron, said, “Working with Neo N3 gives us an opportunity to provide risk-reduced exposure to new EVM alternative chains with large pools of capital. This expands the Saffron risk marketplace, while at the same time lowering the barrier to entry for DeFi across the board.”
NGD, in turn, expects Saffron to become an important part of Neo’s presence in the area of decentralized finance (DeFi) in the future. “We are pleased to have Saffron join the N3 Early Adoption program,” said John Wang, Head of Neo Eco Growth. “Through Saffron, it will be possible to transfer billions of dollars of income financial products from centralized financial institutions to a decentralized, open-source network. This unique ‘bridging’ role is significant for the entire Neo N3 ecosystem.”
Saffron Finance app: https://saffron.finance
Saffron Twitter: @saffronfinance_
Neo official website: https://neo.org
NGD N3 Early Adoption Program: https://neo.org/eco#earlyadoption
Follow Neo on Twitter: @Neo_Blockchain