Strong Q2 From Friktion Labs: Messari Report

Friktion remains one of Solana's most significant options protocols, reaching $2 billion in traded volume this quarter.

By
Mark Jurgens
on
July 28, 2022
Category:
DeFi

Earnings Season

Friktion, a DeFi portfolio manager on Solana, had a solid second quarter.

Here is a summary of Messari's critical insights from Q2:

  • The protocol launched two new Volt strategies in Q2 (Volt #03 and #04) and just announced the launch of Volt #05. 
  • Friktion earns performance fees if the strategies deliver positive net returns and withdrawal fees. It generated almost $1 million in revenues in Q1 and Q2.
  • Total Value Locked (TVL) fell from over $111 million on April 1 to roughly $32 million on July 1. However, in $SOL terms, TVL increased by 8.4%.
  • Given the downward direction of the markets, the covered call strategy was the best performer.
Source

Covered Call Strategy (Volt #01)

By the end of Q2, users could hedge a bearish stance on 14 different tokens and collect yield using this strategy.

  • TVL: $37 million
  • Return (Q2): 4.75%
  • Revenue (Q2): $289,000
  • Sub-Volts: 16
Source

Cash-Secured Put Strategy (Volt #02)

Users can remain in stablecoins, take a slightly bullish view, and collect yield using this strategy. 

  • TVL: $2.5 million
  • Return (Q2): -31%
  • Revenue (Q2): $114,000
  • Sub-Volts: 9
Source

Crab Strategy (Volt #03)

This strategy does not require a directional view, earning yield on stablecoins when the market moves less than is implied by derivative pricing.

  • TVL: $1.1 million
  • Return (Q2): 5.58%
  • Revenue (Q2): $8,500
  • Sub-Volts: 1
  • Launch date: April 4
Source

Basis Strategy (Volt #04)

This strategy receives a yield on stablecoins when demand for short leverage exceeds long leverage.

  • TVL: $7.5 million
  • Return (Q2): 0.02%
  • Revenue (Q2): $2,000
  • Sub-Volts: 2
  • Launch date: April 26
Source

Capital Protection (Volt #05)

This strategy was just announced on July 20 and is designed to generate returns in volatile market conditions while offering protection on deposited principal. 

Source

The protocol expects to launch Volt #06 in Q3, introducing credit and bringing the protocol closer to institutional DeFi users. Boosting retail adoption, Friktion will soon be launching a DeFi education academy.

What is Friktion:

Friktion is a DeFi portfolio management protocol that runs on Solana and is designed to perform across market cycles. It is an asset management tool that automatically allows users to maximize returns while mitigating risks by employing automated 'Volts' strategies. 

Where to find Friktion:

Website | Twitter | dApp | Discord

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Mark Jurgens

Mark is an industrial engineer, born in Colombia and raised in Argentina, a place that is in deep need for the freedom crypto can offer the world. He is searching for projects that want to make a positive impact. Analytical and creative. Loves to travel around. Biggest holdings are Defichain, Ethereum and Solana.

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