Our platform offers an easy way to hedge against the volatility of the Dai Savings Rate. We provide an intuitive interface for borrowers to set a fixed interest rate and a dashboard for lenders to match that interest rate for a predefined period of time.

Underneath the hood, capital collects interest from the Dai Savings Rate, all of which is used to make injections or extractions to the underlying Vault relative to the agreed upon interest rate.

Throughout the life of the agreement, Vaults are monitored to help prevent liquidations while smart contracts monitor the active delta respective to capital flows.

 

How Does it Work?

By leveraging smart contracts and our patent-pending swap contracts, borrowers - commonly individual crypto traders or institutional trading desks - are able to create continuous Forward Rate Agreement (cFRA) offers to leverage their investment positions using the Maker protocol. These offers are matched by Lenders - typically, individual investors and institutional asset managers.

For Lenders: 
 
Akiva provides a decentralized crypto alternative to traditional fixed income instruments which is applicable when fixed income portfolio hedging against falling rates is desirable.

For Borrowers:  

Variable cFRA contract rates offer an upside of extra payments - through Vault injections - when the DSR falls. The downside is bound by the same native DSR rate with our system providing several convenience features to aid in Vault assistance.
 

Exploring cFRAs

Our agreements share elements of both bonds and options that are different from the lending and borrowing side.

For Lenders:  

cFRA’s represent a contractual agreement to settle debt based on a predetermined interest rate over a fixed period of time. Lenders thus can view agreements as callable bonds.
 

For Borrowers:  

cFRAs can be thought of as a loan with a collection of (long and short) options on the interest rate, expiring once per day. Debt is settled on a daily basis, with the value of the sum of those options equaling the total value of the cFRA for the borrower. Since the value of each option depends on the subjectively calculated volatility and directionality predictions of each trader, the value of the entire cFRA at the beginning of a contract is subjective.

 

Why cFRAs?

Our agreements share elements of both bonds and options that are different from the lending and borrowing side.

Daily Settlement  

Our agreements are “continuous” meaning they consist of a set of smaller options that are settled daily. These options can be traded in real time to other lenders.
 

Dynamic Valuations

Regular FRAs only trigger settlement when the value moves in one direction throughout the contracts’ lifespan. Our agreements are able to calculate delta in both directions.

This allows us to determine daily profit and losses of the borrowing side and factor those changes into the face value of an agreement on any given day.
 

Risk Mitigation
 Since debt is tracked with high granularity, there is a high probability of determining when a counterparty may become insolvent. Thus, through the use of automation and smart contracts, our cFRAs reduce risk through seamless tracking of the collateral, virtually eliminating the counterparty risk.

 

Schedule a Demo
1 Yorkdale Road Office 204
Toronto Canada