Retail credit: FlexiFi Risk Management for Ajna Users
Request
Receiving Address: FlexiFi.eth (0xDc7bA8f7fFA067208ecE163853b4D7105F7428a9
)
AJNA Amount: 10,000 € (about 1,500,000 AJNA tokens at current market rate)
Applicant and Team Information
Applicant Name: FlexiFi.xyz
Email: ajna-grant@FlexiFi.xyz
About you and/or the team:
We are prgm.dev, a trio of engineers, specialized in building software products. We help companies build software they need end-to-end, and occasionally enjoy building software ventures of our own. We are the team behind FlexiFi and own it 100%.
Additional Links:
Project Information
1. What is it?
FlexiFi is a 100% on-chain risk management solution for borrowers.
It provides an interface for users to easily protect their existing borrow positions through automated mitigation strategies, like:
- adding collateral using wallet funds
- repaying debt using wallet funds
- selling collateral to repay debt (partial liquidation)
- rebalancing positions on DeFi protocol to balance risk
Additionally, FlexiFi aims to introduce tools that will enhance borrower’s user experience, like notifications for important events and repayment planning.
2. What problem is being solved, how?
FlexiFi addresses issues for two types of borrowers:
- For existing Ajna users: Many rely on a set of manual systems and tasks to manage their risk. FlexiFi enhances their experience by automating and streamlining risk management processes.
- For potential new users: The mental load of managing collateralized borrowing deters many from participating. FlexiFi aims to make DeFi borrowing more accessible by offering a user experience comparable to traditional finance.
Key benefit: FlexiFi’s approach is particularly valuable for users of DeFi-based debit cards, such as Gnosis Pay or Holyheld. By pairing with Ajna, FlexiFi can effectively transform these debit cards into credit cards, opening up new possibilities like buy-now-pay-later schemes in the DeFi space.
3. How will this project be a source of growth or success for Ajna? Please include a step-by-step summary of how you imagine the completed project will affect Ajna.
FlexiFi will contribute to Ajna’s growth and success in the following ways:
- Improved borrower experience: While Ajna faces usability challenges primarily on the lending side, FlexiFi addresses the borrower experience. This approach helps overcome the chicken-and-egg problem where a) new pool requirements discourage lenders, and b) automated management solutions are not spontaneously developed by lenders as they would not be profitable enough to be worth the upfront dev cost. While we wait on solutions like ARK to solve the usability issues on the lending side for everyone, FlexiFi will take care of making borrowing effortless, automating away most advanced features to provide a one-click borrow experience to newcomers.
- Reduced liquidation risk: FlexiFi users are protected from sudden liquidations through proactive risk management. This results in smoother, more gradual liquidations over time, preventing cascading effects and making Ajna safer and more cost-effective for borrowers.
- Enhanced lender security: Less ongoing liquidations means increased deposit availablity. Along with decreased bad debt, FlexiFi indirectly benefits the lending side of Ajna.
- Liquidation guarantee: As a secondary revenue stream, FlexiFi will operate an arbitrage bot to monitor pools and liquidate unhealthy positions, providing additional security for lenders’ yields.
- Retail credit innovation: By leveraging Gnosis Chain’s focus on everyday retail users (with features like sponsored transactions and compatibility-layer services like GnosisPay and Monerium), FlexiFi positions Ajna to pioneer retail credit solutions in DeFi. This could lead to the development of true DeFi credit cards and competitive financing options that traditional banks may struggle to match.
4. What is/are the objective(s)?
The goal of this grant would be two-folds:
- Extend FlexiFi’s risk management capabilities to Ajna users on Base & Gnosis
- Implement new advanced mitigation strategies for users
5. What is/are the deliverable(s)?
- A fully deployed borrower protection smart contract on Base & Gnosis networks, capable of executing the following mitigation strategies:
- Automated collateral funding from user’s wallet
- Automated debt repayment through wallet funding
- Automated debt repayment via partial liquidation of collateral
- A user-friendly web interface for setting up and managing these risk management strategies
6. What is the timeline for completing the deliverables?
We aim to complete and deliver these features by the last week of December 2024.
7. What level of support do you anticipate needing through the duration of the project?
While we expect most development to be straightforward using Ajna’s open-source contracts, we may require occasional technical support. We would also greatly appreciate assistance from the AJNA community in beta testing to refine our development and UI/UX.
8. How often will progress reports be published to the forum?
We commit to publishing progress reports at least monthly, or more frequently when significant milestones are reached.
9. What are the estimated costs associated with the full completion of this project?
Development of the deliverables outlined in this grant has already commenced, primarily self-funded by prgm. This grant will support ongoing engineering costs and facilitate FlexiFi’s integration with AJNA.
Future considerations: To fully realize FlexiFi’s potential, we anticipate needing additional features and a comprehensive smart contract audit. While not included in this current proposal, we may submit a follow-up grant request if this initial partnership proves successful for both AJNA and FlexiFi.
10. If applicable, How will the project be maintained after completion of the grant?
Post-grant, FlexiFi’s ongoing development and maintenance will be supported by its fee structure, which is designed to be both user-funded and user-incentivized.
Additional Information
11. How will you handle a delay in your project timeline?
While we don’t anticipate significant delays in FlexiFi’s development, we acknowledge that we depend on external factors and rely on third parties, such as Mangrove, which FlexiFi uses as the execution layer, to be deployed.
In the event of delays, we commit to promptly communicating the issue to the community through the AJNA forums and providing a revised timeline and detailed explanation of the delay’s cause.
12. How will you handle a scenario where the original scope can’t be completed due to insufficient funding or other factors (Deficit of funds, or other)?
If we identify early that funding is insufficient, we will send the AJNA tokens back. Otherwise, we will seek for help in the community to prioritize on features.
13. How will you handle a scenario where the project is completed, but significantly under budget (surplus of funds left over)?
If we complete the project under budget, we commit to returning any surplus funds to the AJNA treasury. We believe in transparent and responsible use of grant funding.