Forward Finance

Forward DEX
High Volatility Curve - reduces the volatility after 30% price change
Uniswap IL Curve - transformed curve exactly follows the Impermanent Loss of Uniswap, making hedging against it efficient!

Inspiration

Leverage is a powerful investment tool. It increases your exposure in the market and helps you get better returns. But leverage in cryptocurrencies doesn't work that well. Cryptocurrencies are fundamentally very volatile, and using leverage amplifies this, making investing in derivatives that utilize leverage difficult.

Stop loss and targets do exist, but in high volatility scenarios, sometimes holding on might be a better option than selling. Many situations can invert from hitting stop loss to reaching much more than the target.

Forward aims to be an improvement by solving this issue.

What it does

Forward Contract is similar to a traditional derivative like Futures. But instead of using leverage directly on the price variations of the underlying crypto, we first transform it using a transformation function and invest in the transformed price variation curve.

This opens up a lot of possibilities! Reduction of volatility of the underlying crypto allowing a safer bet, setting checkpoints in the price variation for calculated risk, efficient hedging against other loss curves (like Impermanent Loss in AMMs), safely investing in Meme coins, or doing anything that the investor wants!

(In the demo and project media, I have shown some example transformation curves to show the potential)

The transformation can be any mathematical function deployed in a smart contract following the Forward Transformation interface. Analysts and researchers can deploy contracts with new transformations for different use cases. And investors can choose from these curves. Moreover, there exists a financial layer for these transformations, which allows fees to be paid directly to the creator of the transformation. This opens up interesting opportunities for both investors and researchers.

How we built it

The architecture is mostly a frontend connected to a collection of smart contracts and user-defined curves. The Chainlink Automation infrastructure is the major entity in the collaboration between the smart contracts and the executions of the trades. It does matchmaking, liquidation and expiration checks, both on and off-chain.