The Struct Protocol
What is Struct?
Struct Finance is a protocol decentralizing structured finance in DeFi, and is currently available on Avalanche network.
Vision
Struct Finance is a suite of DeFi protocols that aims to bridge the demands of institutional and retail investors with the supply of off-chain and real-world assets.
We envision a future where decentralized finance is not just a niche or alternative market, but the cornerstone of global financial operations. We believe that structured finance will serve as a catalyst for the sustained evolution and stability of this emerging ecosystem.
Strategic Liquidity Provision
Leveraging a dual strategy, Struct Finance transforms risk and rates by tranching underlying yield-bearing positions and strategically channeling liquidity to core protocols. This positions Struct as a pivotal liquidity provider within the ecosystem.
Traditional liquidity providers benefit from a predictable payoff through Struct, as opposed to the variable yields of direct liquidity pools. Additionally, risk-tolerant LPs have the option to leverage their positions at an increased exposure.
By deepening liquidity for integrated protocols, Struct initiates a self-reinforcing cycle, potentially boosting trading activity across the board.
If you have any questions along the way, please join our Discord server. Our team, and members of the community, look forward to helping you.
Challenges in DeFi
Decentralized Finance (DeFi) has brought about transformative changes in the finance industry. However, structured financial products within the DeFi space encounter several challenges.
Volatile Returns: Traditional investment instruments in the DeFi landscape often deliver unpredictable returns. While decentralization introduces transparency and inclusivity, it also brings inherent market volatility. The absence of intermediaries and the automated nature of smart contracts can lead to significant price swings and, consequently, unpredictable returns for investors.
Capital Inefficiency: A pressing issue within the DeFi ecosystem is the inefficiency related to capital usage. Many DeFi platforms necessitate high collateral requirements, which often result in capital inefficiency. This means that users may need to over-collateralize their positions, locking up more assets than they might otherwise need to, thereby limiting their ability to maximize potential returns.
Lack of Alternatives: The current spectrum of DeFi instruments is somewhat limited, making it challenging to cater to the dynamic needs of users and fluctuating market conditions. Investors and users require tools and platforms that are versatile and responsive to real-time market situations.
Decentralizing Structured Finance
Structured finance enables risk distribution by repackaging risky assets into tiered assets with varying returns. This expands investment options, offering instruments that match investors' risk and reward preferences. By attracting a larger investor base, it enhances capital efficiency, unlocking market liquidity and capital.
Structured finance fosters liquid markets by unlocking collateral, converting illiquid assets into tradeable securities. It broadens funding options, offering diverse instruments to different investors. Additionally, it reshapes liquidity profiles, allowing easier asset conversion, which overall market liquidity.
For more details on the Struct Protocol, its features, and potential use cases, explore this documentation site and visit the official website as well.