Rebalancing and Indexation
Portfolio is generated upon users locking native coins into a specific smart contract. Any user can jumpstart their own Portfolio and user can further contribute to Portfolio. User's share in the Portfolio is represented by the pf1CC_n token.
One Click team may suggest original allocation of DeFi protocols to be utilized for Portfolio utilization according to AI-based analysis. However, such allocation is only suggested and is not binding. From the smart contract perspective, One Click will not have a mechanism enforcing original allocation. In fact, users will be creating their own allocations incentivizing more transactional volume in order to achieve the allocation suggested by One Click. Wisdom for the crowds will lead to the most optimal allocation of DeFi protocols for a particular Portfolio.
To achieve complete diversification and prevent unknown risks, users will be incentivized to wrap their pf1CC_n tokens into 1CCindex token. 1CCindex will essentially represent the average allocation of all participating DeFi protocols on a given chain.
Indexation mechanics
- 1CCindex is a primary utility token in One Click ecosystem.
- 1CCindex has a mint-and-burn mechanic where it can be wrapped from pf1CC_n portfolio token.
- 1CCindex is always backed by the value locked in the protocol. pf1CC_n can be wrapped into 1CCindex token.
- pf1CC_n represents the non-rebase token that can be used for cross-chain transactions.
- There is a disincentive against pulling funds from pf1CC_n pool due to blockchain transactional fees to be paid for unwinding positions from all invested DeFi protocols.
- pf1CC_n can be swapped for pf1CC_n+1 for rebalancing.
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Rebalancing mechanics
The method of wrapping pf1CC_n tokens into 1CCindex tokens results in another great feature of rebalancing from pf1CC_n to pf1CC_n+1. Any user can rotate out of pf1CC_n and into pf1CC_n+1, thus getting access to DeFi protocol exposure in Portfolio_n by executing a single transaction.
In the contemporary DeFi yield product landscape, users need to unwind their entire exposure from Portfolio_1 by unwinding all Portfolio_1 positions followed by opening Portfolio_2 positions. Such logistics are extremely costly, especially when the networks are overloaded. Thanks to this One Click architecture, swapping from Portfolio_1 and into Portfolio_2 has both UX and gas fee advantages.
Last modified 1mo ago