FODL is a fully decentralized leverage trading platform, Use liquidity from mortgage platforms like Compound and Aave rather than capital utilization or margin trading.
One of the most important things to do when the market is volatile is to hedge positions in ETH, WBTC and other volatile tokens, The sheer number of traders has squeezed the liquidity available to support such trades. It is also necessary to pay a maximum fee for liquidity access to leverage during market peaks of trading volatility. Leveraged trading is also the most expensive when it is most important to a portfolio allocation strategy, whether on a CEX like Binance or a DEX like DYDX. A big chunk of leveraged profits is eaten up by fees. FODL is not looking for risky leverage or exotic put/call options,FODL just needs a transparent, low-cost way to secure leverage for its long and short positions.
Another strategy used by FODL is revenue folding, The most popular InstaDapp maximizes its 4x COMP reward using this strategy. If you can leverage the same asset back and forth 4 times to earn as much COMP as possible, why can't you do the same thing with cross-asset folding, using the deep liquidity of lending platforms as a source of trading leverage? Clearly, cross-asset folding is much riskier and easier to liquidate if the market moves in the wrong direction, but this can be easily resolved by automating the management and closing of positions ahead of any such clearing using smart contract robots. There is also a need to address the problem of "trading too much" to open these folded leverage positions, which can be easily solved by incorporating flash loans into smart contracts and executing them in individual atomic trades. As another benefit, folding strategies can also be made cheaper by providing deeper liquidity to the platforms FODL is using.
FODL is designed to meet the need for high liquidity, low cost and full on-chain leverage. Instead of reinventing centralized exchanges, FODL looked at how to leverage existing DEFI Lego to achieve FODL's goals, further supporting existing platforms with new cases. Mortgage platforms combined with flash lending proved to be a good way to take advantage of liquid markets to diversify leverage "for long and short trades".
FODL obtains liquidity from the mortgage market, enabling traders to trade with leverage without paying the financing rate. Rather than volatile up/down chain financing rates driven by a smaller market of margin traders, lending platforms offer deep liquidity, low volatility and governance token rewards that allow users to almost always fully pay for their positions.
FODL's second goal is to make the platform compatible with DeFi The spirit remains consistent with a fully decentralized platform, revenue distribution model and user experience. With FODL, everything is computed and executed on the chain. Users do not send their funds to centralized liquidity pools or protocols. The user retains the key to his position and can choose to enable stop-loss and stop-profit robots to open the position. All revenues from the agreement are used to buy back the tokens of the agreement from a decentralized liquidity pool, meaning that nothing is sent to the team wallet or central party.
As FODL provisioning is increasingly distributed to platform users and liquidity providers in the community, FODL looks forward to building a DAO community with full control of the platform and 100% of the protocol revenue and FODL-USDC LP through FODL-ETH. Over time, the team behind FODL plans to further decentralize the platform while simultaneously developing, maintaining, and operating stop loss/profit and clearing robots. The project will use 10% of the FODL supply allocated to the development grant and, in conjunction with the DAO, seek to fund the community of developers and strategists around the platform to fully decentralize the project.
