Vanna Finane

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About

The problem it solves Problem: - While crypto has grown significantly, derivative volumes in DeFi remain low compared to the high volumes in centralised finance (CFI). This disparity is due to the lack of adoption among retail traders, driven by access to limited liquidity to these traders and the absence of user-friendly position management dashboards. Solution: - Our approach involves connecting two groups: Traders/Liquidity Borrowers who lack liquidity and Passive Lenders who have liquidity but lack trading expertise. - On one side, liquidity providers supply liquidity unilaterally, similar to how lending works on platforms like AAVE and Compound, they earn passive APY without risking permanent loss. - On the other side are leverage takers, who borrow this liquidity with minimal collateral (10x leverage) to use in existing defi options/futures protocols and the equity markets, enabling more dynamic and flexible trading opportunities. - By grouping them together, we can leverage the strengths of both parties. - These leverage takers can operate without needing to undergo KYC checks, rely on a credit score, or provide under-collateralization. - Additionally, we will provide a trader-friendly position monitoring dashboard to the leverage takers to enhance their trading efficiency and decision-making. - In this, every action of the trader or liquidity borrower goes through Vanna Finance's predefined rules to maintain protocol solvency. Note: - I already built this idea on the Arbitrum chain with integration on the MUX protocol before the buildathon was announced. After the buildathon announcement, I started integrating with the Avantisfi protocol and Uniswap on the Base chain, which you can confirm through the commits I've made in the repo [https://github.com/vanna-finance/core-ui/commit/7d503b5c45c066b8da4f1ed916399833a6aee289]. - So, I did most of the work for integrating the Prop desk on the Base chain during the buildathon period.

How it's made

Challenges we ran into Vanna Finance serves as an additional layer on top of existing options and futures protocols. We integrate these markets into our platform, enabling traders and liquidity borrowers to execute their strategies seamlessly. However, a challenge arises because these protocols do not mint LP tokens like Uniswap or Compound, making accounting management difficult. To solve this, we introduce the TrackToken. This token is minted to users and accompanied by a dedicated oracle that provides accurate pricing for the TrackToken. This system helps us manage internal accounting within the protocol and effectively oversee Vanna Finance's risk factors.