Skyrim Finance: The First Multichain Decentralized Finance Marketplace

5 min readApr 20, 2021

Background

In 2020, we were in the front seats bearing witness to an extraordinary wave of DeFi innovations and the explosive growth that comes with them, especially in the sectors of decentralized trading, lending/borrowing, options, fixed-rate return, algorithmic stable coins, synthetic assets, and even more. Furthermore, we have seen this niche market growing more diverse day by day, almost to the extent that people feel this movement can replicate or even disrupt the entire landscape of traditional finance.

With the constant iterations to DeFi protocols come new possibilities and opportunities for users of different profiles to reap returns. Be it via lending, providing liquidity in AMMs, or minting synthetic assets.

Structured Products (SP) is a combination of financial derivatives. It is usually a structured product that derives from a series of derivatives, with a purpose to achieve a certain return.

One of the most distinctive advantages of this tool is that it can supplement the known investment vehicles of the current market. Although there are manifold derivative tools that can be used to form a well-designed trading portfolio, experienced traders are only in the minority, and most market participants do not yet even know the concept of placing derivatives into their investment portfolio to optimize the risk/return ratio. And, we believe, that is where Structured Finance can pitch in. It can pack multiple derivatives into a product that anyone can purchase without worrying about the underlying complexity of its structure. In a broad sense, you can understand it as a financial product that is customized for all clients.

In the traditional finance world, Structured Products (SP) are usually the ones lying above on investments that generate fixed-rate returns and often combined with financial derivatives that include equity-linked financial assets such as stocks, bonds, interest rates, foreign exchange, all sorts of index, commodities, and funds.

Due to its flexibility and customizability, this tool has witnessed massive development and has become a powerful tool for asset management. We believe that is where the magic and imagination of Structured Finance lies.

So what is Skyrim Finance?

Skyrim Finance is the First Multichain Decentralized Structured Finance Protocol for Fixed-rate and Leveraged-yield DeFi Products. Skyrim Finance aims to build the Robo-Advisor of DeFi.

The objective of Skyrim Finance is to help investors of different profiles have risk-adjusted return through fixed-rate and leveraged-yield DeFi products. We believe that the structured finance market will become one of the biggest DeFi markets in the future.

Skyrim Finance is ultimately an ecosystem of DeFi products with risk-adjusted returns. We will use a multitude of strategies to optimize yield through both fixed APY vaults and yield farming opportunities.

Skyrim Finance team has extensive experience in financial mathematics, computer science, and cryptography. In addition to technology, the finance talents are from global elite education institutes like the University of Pennsylvania, NYU, The University of Manchester, and London Business School. They are now entering the DeFi space to research and explore the new frontiers of Structured Finance.

Market Opportunity

The DeFi market consists of two types of DeFi investors. We aim to create a blended product that fits these two target markets so that participants can have a single-touch hedged approach to DeFi.

Fixed-rate APY: Many crypto holders are seeking the fixed-rate APY without standard risk.
Leveraged APY: There are many yield farmers seeking higher yield farming APY with high leverage.

Skyrim Finance Features

Multiple Structured Financial Products

Interoperability through NFTs

Skyrim Finance represents deposits and bonds using ERC-721 standard NFT (non-fungible tokens). This means that users can transfer their assets between accounts, and also wrap tokens to add to the feature set.

Self-evolving and Community-based

Token holders can propose and vote on upgrades and management of the platform. Like other ecosystems, larger holders will have more voting power. The project doesn’t earn any fees from the services or contract interactions.

Built on ETH, BSC, and Polkadot

Skyrim Finance will firstly be built on Ethereum and Binance Smart Chain. The Skyrim Finance V2 is planned to be integrated onto Polkadot using the Substrate Framework. The project will support DeFi multichain interoperability.

What does the product look like?

Skyrim Finance project will collaborate with different development teams to deliver innovative decentralized structured finance products. They are included but not limited to:

Architecture

dTRANCHE: Fixed-rate Vault is the first product that Skyrim Finance is building.

The purpose of our first product is to satisfy investors’ different risk preferences or financing needs. dTRANCHE can be deployed with a two-token structure that allows investors to invest in two different kinds of fungibles, interesting bearing tokens: SENIOR and JUNIOR. JUNIOR, known as the “risk token”, takes the risk of “defaults” (real yield < expected yield) first but also receives higher returns. SENIOR, known as the “yield token”, is protected against defaults by the JUNIOR token and receives lower returns. This is similar to common Junior/Senior investment structures.

The Loan Market Maker deposits collaterals to mint two kinds of fungible tokens SENIOR token and JUNIOR token in exchange for their deposit. MMs can choose to sell the fungible token(s) to earn a premium, or provide liquidity in Uniswap pools with the fungible token(s) and earn fees with liquidity rewards. Both senior and junior investors can choose the interest rate with the adjusted risk and leverage they need.

The workflow consists of five main components: Collateral Deposit/Withdraw (Deposit/Withdraw), Yield Tokenization (Invest), Vault of Yield (Vault). Yield Clearing Process (Settlement) and Liquidity Pool Reward (Pool).

About Skyrim Finance

Skyrim Finance is the First Multichain Protocol focusing on Fixed-rate and Leveraged-yield DeFi Products. Skyrim Finance aims to build the Robo-Advisor of DeFi. The objective of Skyrim Finance is to help investors of different profiles have risk-adjusted return through fixed-rate and leveraged-yield DeFi products.