Overview
What is Flux?
Flux is an omnichain Proof of Yield protocol that enables:
Liquidity providers to earn verifiable yield with transparent risk
Managers to access leveraged capital for complex, real-world strategies
Automatic risk management through a Strategy-Aware Risk Engine
Transparent safety through collateralized positions and automated liquidations
Unlike traditional lending protocols that only support simple token borrowing, Flux enables managers to execute any on-chain strategy—from multi-leg trades to cross-chain positions to complex yield farming.
Flux is designed to support real-world strategies—complex, multi-asset, cross-protocol positions—while providing transparent safety through on-chain risk parameters, automated liquidations, and verifiable collateral tracking.
Key Innovations
1. Callback Architecture for Complex Strategies
Traditional lending only supports simple borrow/withdraw operations. Flux enables managers to execute complex, multi-step strategies atomically.
The callback architecture gives managers the atomic, single-transaction flexibility of a wallet:
Swap on one protocol, provide liquidity on another, execute any on-chain action
Permissionless execution of complex, multi-leg strategies
Atomic operations ensure all-or-nothing execution
After callback execution, the vault validates that positions maintain required collateral ratios in strategy-approved assets.
2. Strategy-Aware Risk Engine
This flexibility is protected by automated liquidation monitoring. When the strategy determines a position should be liquidated (based on health ratios, liquidity conditions, and other risk factors), anyone can execute the liquidation to protect LPs.
Unlike simple LTV-based systems, strategies can implement multi-factor risk analysis:
Liquidity risk: Can the position actually be liquidated?
Slippage risk: What's the cost of unwinding?
Asset composition risk: Are all assets properly valued?
Cross-protocol risk: How do positions interact?
This enables support for real-world strategies that other protocols can't handle.
3. Verifiable Safety Through Transparency
All positions tracked onchain in real-time
All risk parameters visible and immutable (or timelocked)
All liquidations automatic and permissionless
All oracle prices transparent and auditable
No trust required—only verification.
Core Participants
1. Liquidity Providers (LPs)
Role: Supply capital to earn verifiable, transparent yield
After seeing "trust-me" yield models fail repeatedly, LPs need infrastructure that provides safety through verification, not promises.
Verifiable Safety:
Collateralized Positions: Managers post bonds to access capital
Real-time Transparency: All positions visible onchain 24/7
Automatic Risk Management: Liquidations trigger automatically, no governance delays
Strategy-Aware Risk: Multi-factor risk analysis beyond simple LTV
Immutable Parameters: Risk rules locked at vault creation (or timelocked changes)
Benefits:
Earn interest from managers' borrowed capital
Share of protocol fees and curator fees
ERC4626-compliant vault shares (composable with DeFi)
Standard and queued withdrawal options
Emergency withdrawal mechanisms
Why Flux is Different: Unlike opaque yield aggregators, every Flux vault shows you:
Exactly what assets managers can trade
Exactly what collateral backs your capital
Exactly when liquidations trigger
Exactly how much managers have at risk first
No black boxes. No trust required.
2. Managers
Role: Access leveraged capital with an automated risk co-pilot
Running complex, multi-asset strategies 24/7 is impossible to monitor manually. Flux automates the hard part—risk management—so you can focus on strategy execution.
Automated Risk Co-Pilot:
24/7 Position Monitoring: System tracks health automatically
Automatic Liquidation Protection: Unwinds positions before catastrophic loss
Multi-factor Risk Analysis: Not just price—liquidity, slippage, composition
Real-time Feedback: Know your exact risk status at all times
Maximum Flexibility:
Callback Architecture: Atomic, single-transaction execution of complex strategies
Permissionless Execution: Swap, farm, provide liquidity—any on-chain action
Multi-asset Support: Trade any whitelisted asset (ERC20s, NFTs, yield-bearing tokens)
Cross-protocol: Interact with Uniswap, Aave, Compound, Curve—all in one transaction
The Only Rule: Return the vault's whitelisted assets by end of callback.
Collateralization:
Post bond (your capital) before borrowing
Bond requirements defined by vault strategy
Verifiable collateral—build trust with investors
Benefits:
Leveraged capital access (e.g., 5x with 20% bond ratio)
Execute complex, real-world strategies other protocols can't support
Automated risk management saves you from catastrophic losses
Transparent safety builds investor confidence
3. Vault Creators (Curators)
Role: Deploy and configure vaults
Responsibilities:
Choose strategy (interest rates, allowed assets, risk parameters)
Choose access policy (permissionless or restricted)
Earn creator fees (if strategy allows)
Cannot:
Change parameters after deployment (for immutable strategies)
Access vault funds
Override strategy rules
4. Liquidators
Role: Maintain protocol health by liquidating underwater positions
Benefits:
Profit from liquidating unhealthy positions
Capital-free liquidations via
locked_borrow()Simplified liquidation bonus model
How It Works:
Healthy positions (collateral ≥ debt): Zero bonus
Underwater positions (collateral < debt): Profit based on
liquidationProfitMargin(0-20%)Default (1%): Pay 99% of collateral value, keep 1% profit
Altruistic (0%): Pay 100% of collateral value, break-even
Maximum (20%): Pay 80% of collateral value, keep 20% profit
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