Saffron is a decentralized finance protocol for exchanging fixed and variable yield from Uniswap V3 liquidity positions. Its fixed-income vaults let liquidity providers sell future trading fees for an upfront premium. Variable-side participants pay that premium in exchange for a proportional share of the position’s fees, after protocol charges, over the vault’s term.
Each vault has a specified pool, price range, duration and funding targets. Once both sides are funded, the vault starts and the liquidity provider can claim the premium. At maturity, the liquidity provider can withdraw the underlying liquidity, while variable-side participants can redeem their share of the accumulated fees. The premium can be expressed as an annualized fixed rate, but the value and token composition of the underlying liquidity can still change.
Vault positions are represented by transferable ERC-20 tokens. These are separate from Spice (SFI), Saffron’s governance token, which holders use to vote on protocol and treasury decisions. The current vault product follows earlier Saffron implementations based on risk tranches and insurance mechanisms.
