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What is FLI?
What is FLI?
The Flexible Leverage Index (FLI) lets you leverage a collateralized debt position in a safe and efficient way, by abstracting its management into a simple index, reproducible by a fully-collateralized ERC20 token built on Set Protocol.
2/8/2022
Index Coop
Cryptocurrency Leverage Made Simple
Video Excerpt
"So our FLI Series or Flexible Leverage Index Series is a way to put on a leveraged ETH or BTC position on Compound. Now, if you're going to do this on your own, you need to first stake Ethereum or BTC to the Compound platform, you then need to borrow USDC, then you need to go and make a transaction to buy more ETH or BTC to create leverage.
If you buy FLI all of that is done behind the scenes. You simply make a single token purchase and don't have to worry about the rest. The other benefit of the product is that there’s flexible leverage, so it doesn't hit exactly 2x and that flexibility is to the benefit of the user. There's also some safeguards built in to protect the token holders against liquidations. So for example, in May 2021 the markets had some pretty nasty down days where billions of dollars of liquidations took place on Compound, Aave et cetera. None of our holders experienced a penny of loss showing that the product worked quite well to prevent against liquidation. So Ethereum, BTC, those are the products that we have today, but we envision launching additional leverage products to get exposure to other crypto assets."
Hear more about FLI in the full video.
Disclaimer: This content is for informational purposes only and should not be construed as legal, tax, investment, financial, or other advice.
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FAQs
Streaming fees (an annual fee paid continuously block-by-block)
Mint and redeem fees
Borrow costs (interest paid to borrow funds from onchain markets when using leverage)
Index Coop yield tokens simplify earning yield in DeFi by automating complex strategies and diversifying across protocols. They are user-friendly and cost-efficient, appealing to both new and seasoned DeFi users.
Leverage tokens automate a leveraged position by utilizing onchain money markets like Aave or Morpho to borrow funds, amplifying a user's exposure to an asset without requiring manual management. The token's smart contracts autonomously handle the borrowing, lending, and rebalancing of assets, maintaining a consistent leverage ratio despite market fluctuations. This automation eliminates the complexities of collateral management and liquidation risks, while also charging low, transparent fees that avoid expensive funding rates often charged by perps.
Index Coop is a decentralized autonomous organization (DAO) that specializes in creating and maintaining onchain structured products. Index Coop aims to democratize access to the crypto market, empowering everyone to participate in the growing digital asset ecosystem with ease.
No, yield automatically compounds and accrues to the token price. The value of the tokens you hold in your wallet will simply go up over time without the need to claim or compound rewards.
Index Coop products protect you from liquidation with automated risk management that rebalances assets to maintain a target leverage ratio that avoids liquidation.
INDEX is the ERC-20 governance token on Ethereum for Index Coop. INDEX empowers its holders to participate in decision-making processes that shape the future of Index Coop.
Yes, all Index Coop products are instantly redeemable for their underlying value at all times.
Yes, all Index Coop smart contracts have been audited by leading independent security firms such as OpenZeppelin, ABDK, Isosiro, & more. There is also an active bug bounty program through ImmuneFi. Audit information is published in the docs here.
Costs and fees vary by product, but typically most products can include some combination of the following: