Friktion Glossary
An evergrowing list of terminology for Friktion users!
Volt: A Friktion neologism for "vault" - a single entity that accepts user deposits and invests them in yield-earning products.
Volt #1 Generate Income: Automated covered call strategy, the first volt Friktion launched. Profits relative to holding underlying during low volatility, moderately bearish scenarios.
Volt #2 Sustainable Stables: Automated protected put strategy, the second volt Friktion launched. Profits relative to holding underlying during low volatility, moderately bullish scenarios.
Volt #3 Crab Strategy: Automated "crab" strategy using power perpetuals on entropy, the third volt Friktion launched. Profits in any relatively low volatility regime. As compared to Volt 1 & 2, has the advantage of continuous liquidity and no directional bias.
Volt #4 Basis Yield: Automated basis strategy on Mango Markets. The difference between the funding rate on linear perpetual and the interest rate on borrowing the corresponding spot asset profits.
Volt #5 Capital Protection: Automated capital protection strategy. 100% principal protection, using interest from lending yield to hedge against downside volatility. Earns outsized returns when price of SOL falls more than price hedge %
Volt #6: SoonTM
Collateral: assets an entity controls. For example, the "volt's collateral" refers to all assets the volt controls, typically deposits from users' wallets.
Rebalancing: The process of accepting new deposits, processing further withdrawals and entering/exiting an investment position depending on net inflows/outflows.
Rebalancing Period: The period between each rebalancing of a volt.
Epoch (Round): a single rebalancing period. Single-word synonym for time users must wait for a deposit/withdrawal between each opportunity. Also demarcates when fees are taken by the volt.
Share Token: SPL token that represents one share of the volt's total collateral. The value of a share token can be calculated as: $ value = 1 / (share token supply) * total deposits * price of deposit token
Volt Token: synonym for Share Token
Pending Deposit: A user sends some deposit tokens (e.g., SOL, BTC, USDC) to the volt to receive newly minted share tokens once the current epoch ends.
Pending Withdrawal: A user burns some share tokens to have a claim on their share of the volt's collateral once the current epoch ends.
User Facing Instruction: a Friktion volt program instruction that can be called permissionlessly from the friktion.fi or any other Solana cluster client.
Claim Pending Deposit: A user-facing instruction to claim share tokens after the epoch attached to a pending deposit ended.
Claim Pending Withdrawal: A user-facing instruction to claim deposit tokens after the epoch attached to a pending withdrawal ended.
DOV: Short for "DeFi Options Vaults," a common term describing protocols offering automated options selling strategies. Friktion offers these products via Volt #1 & #2.
Last modified 6mo ago