Introduction

Fyde is a decentralized finance (DeFi) platform designed to facilitate asset management and yield optimization for crypto investors. It uses artificial intelligence (AI) and machine learning (ML) to offer unique Liquid Vaults that enable automated, AI-driven rebalancing and liquidity optimization. These vaults are structured to provide a secure, non-custodial environment for digital assets, allowing users to gain exposure to a diversified portfolio while minimizing the risks associated with manual management.

The Liquid Vaults are built to handle various digital assets, each carefully curated and managed by advanced algorithms to ensure good performance. Machine learning models monitor on-chain data, transaction patterns, and market liquidity, providing traders an additional layer of risk management.

The platform’s governance retention feature allows users to retain control over their deposited assets, making it an attractive option for investors who want automated management and control.

What is Fyde?

Fyde is a DeFi platform live on the ETH Mainnet that combines AI and Machine Learning with decentralized financial solutions. The platform’s Liquid Vaults allow users to deposit multiple digital assets into a secure, non-custodial environment where advanced algorithms can manage them. The vaults’ functionalities include AI-driven portfolio rebalancing, liquidity optimization, and risk management.

The Liquid Vaults are designed to tackle the complexities of asset allocation and liquidity management. Users can deposit assets into the vault, and the AI system takes over, adjusting the portfolio based on real-time market data, liquidity conditions, and risk metrics, an ideal automated process for investors looking to minimize their hands-on involvement in asset management, allowing them to benefit from advanced technology-driven solutions.

Fyde Development Team and Partnerships

The development team behind Fyde comprises seasoned highly skilled professionals, with extensive backgrounds in technology, finance, and blockchain.

Leading the team is Andrey Stejko, PhD, who serves as the Technology Lead, bringing in a deep technical background, including experience with NASA where he conducted research on computational heliophysics. His work in complex systems and applied physics translates into Fyde’s sophisticated AI and machine learning-based infrastructure. Supporting him are team members like Bo Zhang, Head of Investment Strategy, who previously worked as a portfolio manager at JP Morgan, bringing valuable insights into investment management.

Other team members include Carlos Saavedra, CFA, who oversees ecosystem development, and Victoria Gong, who specializes in quantitative finance. Their combined expertise spans sectors such as fintech, data science, and blockchain, enabling Fyde.fi to offer advanced, secure, and high-performance DeFi solutions.

Fyde benefits from a network of backers who provide financial support and strategic guidance. Inception Capital led Fyde’s seed funding round, alongside investors like Arrington XRP Capital, Merit Circle, and Big Brain Holdings. These firms bring capital and expertise to support Fyde’s growth in the DeFi sector. Fyde’s seed round raised $3.2 million in December 2023, accelerating development and expanding its DeFi ecosystem.

Fyde has formed strategic partnerships that enhance its platform’s capabilities. Collaborations with companies like Magna strengthen Fyde’s token distribution and treasury management processes. Fyde’s partnership with Nektar also enables users to stake Ethereum (ETH) in Fyde’s vaults and earn rewards through Nektar’s Liquid Staking Token (LST) program, expanding Fyde’s liquidity options and enhancing its ecosystem.

Technical Features

One of Fyde’s main features is its AI-driven rebalancing system, which automatically adjusts asset allocations within the vault based on pre-defined parameters. The AI models consider factors such as volatility, performance trends, and liquidity to determine the best allocation for each asset. Then, the AI ensures that the vaults remain aligned with the target performance levels, aiming to reduce volatility risks and maximize returns.

Liquidity Optimization

Liquidity is very important in DeFi. It impacts every aspect of users’ ability to trade or withdraw assets without incurring significant slippage. Multiple protocols address this issue, but Fyde uses machine learning algorithms to analyze liquidity pools and adjust the asset mix within the vault to maintain optimal liquidity levels. This feature is particularly beneficial for investors trading large volumes of transactions, as it enables them to access substantial liquidity without impacting market prices.

The ML models used for liquidity optimization are programmed to monitor different trading elements, such as trading volume and liquidity depth, to ensure that the assets in the vault remain highly liquid. By doing so, the platform minimizes slippage and enhances the flexibility of its vaults, allowing users to interact with their assets efficiently, even during periods of market volatility.

Risk Management with Machine Learning

The Machine Learning (ML) algorithms used in this platform monitor on-chain data and transaction patterns to help identify potential risks before they can affect the assets stored in the vault. Risks may include governance attacks, price manipulation, or other abnormal market behaviors. If the algorithm detects a potential threat, it is trained to take preventive actions, such as adjusting the asset allocation or quarantining affected tokens separately, to optimize the results from that vault.

The vaults are subject to a rigorous whitelist process, ensuring that only high-quality assets are included. This process evaluates assets based on factors such as liquidity, market cap, and historical volatility, helping to safeguard the vault’s holdings against unforeseen risks.

Governance Retention

A unique feature of Fyde’s Liquid Vaults is the ability for users to retain governance rights over their deposited assets. This is made possible because, by depositing tokens into the vault, users have the option to mint governance tokens, known as $govTRSY, which allow them to participate in protocol governance.

The governance retention feature mints $govTRSY tokens that can be delegated to specific wallets or voting spaces, enabling users to participate in decisions about protocol changes, asset selection, and other governance matters. By allowing users to retain governance rights, Fyde offers a flexible solution for those who want both automated asset management and control over protocol governance.

How Fyde Works

Fyde’s Liquid Vaults allow users to deposit multiple whitelisted tokens. Users will receive $TRSY tokens upon depositing their assets, representing their share in the vault’s portfolio. These $TRSY tokens are fully collateralized by the assets in the vault and can be traded, held, or redeemed at any time. The vault employs AI-driven strategies to manage these assets, ensuring the portfolio remains balanced according to the defined allocation targets.

The vault’s rebalancing mechanism is designed to lock in gains and minimize losses. When certain assets outperform, the AI reallocates a portion of the gains to underperforming assets or converts them to stable assets like $ETH. This helps maintain a balanced portfolio and provides users with stable, risk-adjusted performance.

Users who wish to retain governance rights can mint $govTRSY tokens, which allow them to participate in governance decisions related to the vault.

An important feature of Fyde is its AI Portfolio Optimizer, which is responsible for curating a whitelist of eligible assets and ensuring that only high-quality tokens are included in the vault. This optimizer evaluates assets before they are added to the portfolio using a variety of carefully outlined filters, such as market cap, liquidity, and volatility analysis. Through pattern recognition and threat detection, the AI Portfolio Optimizer safeguards the vault by filtering out assets that do not meet Fyde’s quality standards.

Increasing Liquidity with Machine Learning

Fyde’s ML algorithms help enhance liquidity within the vault. These algorithms analyze liquidity pools and adjust the asset allocations to minimize slippage and maximize accessibility. This is particularly beneficial for larger investors, as it provides a mechanism to access liquidity without significantly impacting the market price of assets.

The platform’s focus on liquidity ensures that users can interact efficiently with the vault, even during periods of market volatility. By prioritizing liquidity, Fyde provides a solution for users who require a stable, accessible investment environment. The ML models continuously optimize the liquidity levels, enabling the vault to respond dynamically to changes in market conditions.

The FYDE Token

The FYDE token is a very important part of Fyde’s ecosystem, serving as both a utility and governance asset that enhances user engagement and participation. This token enables holders to vote on various aspects of the platform, such as the selection of new assets for the vaults, updates to fee structures, and the development of new features, allowing users to have a say in the platform’s direction.

As a utility token, FYDE is also used to fulfill different functionalities within the Fyde platform, such as paying transaction fees, accessing premium services, and participating in exclusive features and events. This enhances user experience and engagement with the platform. This utility extends to various incentive structures, including staking and liquidity mining programs, aimed at rewarding active community participants.

Incentives and Staking

Fyde offers many staking incentives for FYDE holders. By staking their tokens, users contribute to the platform’s liquidity and governance and receive a share of the rewards generated by the protocol’s activities.

The revenue generated from fees within the Fyde ecosystem—such as imbalance penalties and yield strategy fees—is partly allocated to FYDE buybacks, creating a feedback loop, where increased platform activity benefits FYDE holders by reducing the token’s circulating supply and driving demand.

Stakers earn rewards that align with the platform’s performance, incentivizing long-term holding and participation in governance. FYDE staking supports protocol stability by allowing users to lock their tokens and further secure the platform’s vaults. As the platform grows, so too will the staking opportunities, with FYDE token holders being given greater responsibilities and rewards for maintaining and advancing the ecosystem.

FYDE Tokenomics

Token Distribution

The total supply of FYDE is capped at 100 million tokens, structured to support both immediate and future platform needs, deployed at ETH mainnet.

A portion of the tokens is allocated for development, team compensation, and early investors, with vesting schedules in place to align incentives over the long term. For example, tokens allocated to the team and initial investors are locked for 12 months and then vest linearly over the following two years. 50% of FYDE is earmarked for incentives and ecosystem growth, supporting initiatives such as community rewards, hiring, and the platform’s operational runway.

Revenue generated from platform fees (from imbalance penalties and yield strategy fees) is split, with 80% dedicated to FYDE buybacks and 20% allocated to ongoing development and operational expenses. This dual structure aligns the platform’s growth with FYDE’s value accrual, ensuring increased activity benefits token holders directly. As the protocol matures, FYDE holders will have new opportunities to create personalized vaults, develop unique strategies, and vote on platform enhancements, which could drive further token demand and engagement.

The distribution of FYDE tokens is structured to support the platform’s growth and incentivize community participation. A portion of the tokens is allocated to the development team for ongoing improvements and marketing efforts, while another is reserved for community rewards. Public sales and liquidity mining programs are also used to ensure widespread distribution of the token.

Vesting Schedule

Conclusion

Fyde.fi’s AI-rebalanced and Liquidity-Optimized Vaults represent a unique blend of AI-driven asset management and liquidity optimization within the DeFi landscape. By incorporating advanced technologies like machine learning, Fyde.fi provides users with a sophisticated, hands-off approach to digital asset management. The platform’s AI rebalancing and risk management strategies ensure that users can maximize returns while maintaining a stable, diversified portfolio. Additionally, the FYDE token offers utility, governance, and incentives that enhance user engagement and contribute to the platform’s ecosystem.

As Fyde.fi continues to innovate, its Liquid Vaults and associated features make it a compelling choice for DeFi investors who seek to optimize their returns through technology-driven solutions. By combining AI with a commitment to user control and governance, Fyde.fi provides a flexible and secure environment for digital asset management. With its focus on efficiency, liquidity, and risk mitigation, Fyde.fi is well-positioned to significantly impact the DeFi space, offering a next-generation solution for automated portfolio management and yield optimization.