STFX, Single Trade Finance Exchange, is a DeFi and SocialFi protocol for short-term asset management. What is its idea? Let’s find out!
The project is pioneering the concept of Single Trade Vaults — short-duration, non-custodial, active asset management vaults that are dedicated to one trade. STVs stand in contrast to long-term, continuous, multi-asset portfolios that have existed in DeFi and TradFi to date.
Its idea is simple: 1 STV = 1 vault = 1 trade.
STFX allows users to create or invest in short-term STVs focused on a single trade.
- STFX is a decentralized protocol running on Optimism’s L2 solution
- Single Trade Fund Exchange (STFX) is a product based on Single Trade Funds (STF)
- STF-vault (as a product) is an investment idea for a trading transaction from users (managers) whose financial model is based on crowdfunding from other users (investors)
- The main idea of STFX is to switch from long-term stock and trading strategies to fast and short-term trades
- The project is positioned as TikTok for the cryptocurrency investment market
- Ambitious traders with their own strategies, who lack the resources to trade large amounts of money
- Traders who have lost their deposit
- High-risk investors, who cannot stay outside the market
STFX users:
- Managers who create and manage the trading strategies
- Investors
System Flow:
- The manager outlines trade parameters: instrument type, direction, approximate entry, stop or liquidation, take profit, and leverage. The manager will select which of these parameters they want to make visible, and those which will remain opaque
- The manager “initiates” the vault, which pushes the underlying trade parameters from step #1 as metadata into a smart contract on Optimism
- Following initiation, the STV fundraising period commences. The fundraising will be completed when one of the following ensues: the vault raise capacity is hit, or the duration limit expires
- Once the fundraising is over, a commission fee is levied on the vault, and the collected capital is autonomously transferred to Perpetual Protocol. This capital is then used as margin collateral to execute the trade according to the contract specifications
- Trade is executed on Perpetual Protocol and other decentralized derivative exchanges
- Once the position is closed (TP/SL/liquidation is triggered), the PnL is sent back to the Optimism smart contract
- If a profit is generated, the manager and STFX platform performance fees are debited, and investors can then claim their original principal + accrued profits
- STF vaults (as a technical solution) is a smart contract to which users send their funds to participate in an investment transaction.
STF — vaults consist of:
- Transaction Asset
- Transaction direction (long/short)
- Transaction amount
- Leverage of the deal (max — x10)
- Take profit value
- Stop loss value
- Time to collect funds for transaction implementation
– Minimum — 1 hour
Maximum — 1 week
Perpetual Protocol — executor of STF — vaults
– STFX is a taker placing orders of its users on Perpetual Protocol via the STF smart contracts
– Once funds are collected and confirmed to be ready for trading by the STF keeper STFX automatically opens a position on the parameters of the STF account in the Perpetual Protocol using the collected funds
– If after 72 hours, the STF account manager does not confirm the readiness to open the position, all investors may get their funds back
- STF-vaults aggregator
- The user interface for creating and investing in trading transactions
STF — vault managers:
Create STF vaults via the user interface
Manage STF Vaults:
- confirm readiness to open a trade
- open trades
- close trades
– Each manager has a level of reputation, depending on past trades on STFX
A high reputation allows to:
- increase the maximum limit of funds for a managed vault
- manage more vaults at the same time (1 vault at the start)
Have no direct management of investor funds
Investors:
– Invest their funds in the transaction
– Get a percentage of profit and initially invested funds from successful trades
– Receive initially invested funds minus losses from unsuccessful trades
– Receive their initial investment minus a protocol fee for breakeven trades
– Each investor has a different level of reputation, depending on past vault investments
– A high reputation allows for investing in more vaults at the same time (3 simultaneous vaults at the start)
STFX is the native token of the STFX platform, with a hard capped supply of 1B units, set to exhibit deflationary properties over time. STFX is designed as a utility token that services many key functions within the network.
The total amount of tokens — is 1 billion
Token stakers will receive fees from the protocol business — 80%
The commissions for token stakers are reduced
Commission — 0.3% on all STF stakes
Commission — 3% from all profitable trades without taking into account the original commission
Profit distribution
- 80% of the profit from the protocol goes to the stakers
- 20% of the profit goes to the DAO STFX protocol treasury
– Perpetual protocol will not be able to cope with the volume of STFX trades. In this case, it may inflate its liquidity (it is possible if STFX becomes more popular)
– Perpetual Protocol is limited to $200–220 million TVL
For high volume sales STFX has to:
- Be a liquidity provider if Perpetual Protocol can’t cope with trades before reaching the maximum TVL
- Find other DEX derivatives to provide trades
- Create its own DEX derivative and provide liquidity there
– Hacking STFX/Perpetual smart contracts. The project needs audits and stress testing in testnet format
- The team has a clear idea of its target audience. The project team understands that most people in the crypto sphere are looking for emotions and fast money
- The project has the potential to be a full-fledged product that solves real market problems
- The market goal is to offer a product that will open convenient access to cryptocurrency for everyone who wishes and will not require much time
- The product as a business can generate profits through commissions and through liquidation of positions on Perpetual of its users (there is a direct return on investment)
- The product is capable of scaling to different networks and protocols, which will attract even more users
- The product is based on balanced mechanics between managers-investors-protocols, where everyone profits
- Perpetual protocol as a platform for implementation raises several questions in terms of liquidity and transaction collateral volumes
- Now everything is at an early stage, the project has a foundation, a market vision, a team, and an idea. It needs solid marketing to succeed
- The project is being done in a bear market, the team will not have inflated expectations and will have time to implement all product ideas
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