Fission Finance

Neutron Grants Program Batch #3 — Fission Finance

Thesis

We have decided to award a $125,000 grant to Sturdy and Pacman, the co-founders of ApolloDAO, to build and launch Fission Finance, a protocol that enables the splitting of yield-bearing tokens. The last year has proven the use-case of the splitting of yield-bearing assets and fixed yields and we believe that the market for such products in Cosmos is extremely large. Fission Finance is the best bet on this within the Cosmos and for Neutron especially given the team's expertise already building ApolloDAO. We are excited to support Fission Finance on their building on Neutron!

Summary

Fission Finance is a DeFi application launching natively on Neutron built by the co-founders of ApolloDAO, Sturdy, and Pacman, which enables splitting yield-bearing tokens such as (but not limited to) the vault tokens created by Apollo DAO into a principal token and a yield token. The principal token represents a claim on the underlying token (known as a zero coupon bond in traditional finance), while the yield token accrues all of the yield from the yield-bearing token. These two tokens have a maturity date at which point no more yield accrues to the yield token and only the principal token is needed to redeem the underlying token. This functionality enables many features and use cases, such as betting on whether yields for a particular token will rise or fall, creating liquidation-free leverage, and, most importantly, creating fixed-rate borrowing and lending. Fixed-rate lending is enabled by buying principal tokens at a discount and waiting until maturity before redeeming them for the underlying token, thus earning a fixed rate of interest during this period. Fixed-rate borrowing is enabled by minting principal tokens with exogenous collateral and selling the principal tokens at a discount. At the end of maturity, the user can unlock their collateral with either the underlying token or principal tokens, which are now equal in value to the underlying token. This means that the borrower paid a fixed rate of interest for their loan as the interest is determined at the point when the principal token is sold.

Grant Deliverables

The deliverables are as follows:

• Development and launch of the Fission Finance application exclusively on Neutron
• Finish v1 minter contract
• Finish AMM with yieldspace curve
• Frontend Design completion
• Write lockdrop contract
• Build frontend & backend
• Launch Testnet
• Audit completion
• Mainnet launch of Fission v1
• 1M in TVL
• $1M in AMM volume

For Milestone 1 completion, the criteria are as follows:

• Finish v1 minter contract
• Finish AMM with yieldspace curve
• Frontend Design completion

For Milestone 2 completion, the criteria are as follows:

• Write lockdrop contract
• Build frontend & backend
• Launch Testnet

For Milestone 3 completion, the criteria are as follows:

• Audit completion
• Mainnet launch of Fission
• $1M in TVL;
• $1M in AMM volume

Grant Payment Terms

• Upfront Payment: $43,750 USDC
• Milestone 1 Payment: $43,750 USDC
• Milestone 2 Payment: $25,000 USDC
• Milestone 3 Payment: $12,500 USDC

Further information

• Website: https://fission.finance/
• Social Media: https://twitter.com/fission_finance

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