Underneath the Social Layer is the Technical Layer where the magic happens. This layer consists of a heavy load of smart contracts and coding to protect the Farms from the prying eyes of bad actors and to make sure that everything works perfectly. The Farm is essentially a DeFi Vault, where users' assets get locked into the smart contracts.
The Farm is non-custody, which means the assets still belong to the owner. Farm Managers only have the right to direct the actions of the Farm through our smart contracts. Different from the majority of current DeFi Vault projects, with deFarm, Managers will navigate through our DEXes and Perpetual DEXes partners to search for profits, rather than other types of DeFi action such as Yield Farming, Staking, Lending, etc. deFarm focuses on trading on short-term and mid-term only.
The Liquidity Layer will come from our perpetual DEX partners. We need them to provide the necessary liquidity and technical support for our Farms. The trading pairs that Farm Managers are able to trade will be limited as the Liquidity partners.
The final layer within our structure will be the Infrastructure Layer, the blockchains on which we will base our codes. In the first phase of development, we are EVMs compatible and will initiate our dApp on Ethereum and Layer 2s, such as Arbitrum and Optimism. In the future, we are open to being a Chain-Agnostic protocol and will support other chains and languages if possible.
It's important to understand the flow of the platform to provide comprehensive instructions for users. The platform's flow involves several steps that are crucial for Farm Managers and Investors to follow in order to maximize their investments:
Farm Manager creates a vault, which is a decentralized pool of funds that investors can deposit into to invest in the platform. The managers ensure that the vault meets certain requirements such as minimum deposit amounts, investment objectives and fees.
Once the vault is created, investors can deposit funds into the vault at any time before the vault expires. The funds are then added to the pool of funds that the managers can use to open new positions on only whitelisted assets from partners.
After depositing funds into the vault, the vault smart contract generates ERC-4626 tokens as the shares of the vault corresponding to the value of their deposit and returns them to the investors’ vault balance.
Once the vault has enough funds, the manager is able to deposit and open new positions to be executed right on the front-end based platform of DEX (Decentralized Exchange) partners.
During the opening positions, the managers manage all kinds of orders such as TP (Take Profit), SL (Stop Loss), and Trailing Stop, or even open new positions based on the remaining capital.
The smart contract executes the orders to the platform's DEX partners.
When the managers decide to close the position, the margin accrued by realized profits and losses (PnL) is sent back to the smart contract.
Once each party wants to withdraw, the vault smart contract swap and burn ERC-4626 tokens back to the underlying assets.
For each winning vault, the manager receives a portion of performance fees and some others.
In case the vault creates profits, two parties: managers and investors distribute a small percentage of the profit back to the deFarm treasury, as platform revenue.
After all fees and expenses have been accounted for, a portion of the revenue generated by the platform will be distributed to all token holders by the treasury.
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