Resonate Onboards First Institutional Fund: Coindex Capital Management
One of the more interesting requirements of Resonate is deep liquidity— when upfront payments are made, they necessarily require significant capital contributions from the Issuer to allow high capital throughput on the Purchaser side. With our strategy of pursuing DAOs and protocols as Purchasers, we have been able to attract significant deployments of capital for upfront purchases. The size of these orders mean that we need large capital contributions on the Issuer side to fill them. To get these orders filled faster, we’ve come to realize that there’s no substitute for the weight and presence of institutional capital — that’s why, today, we’re excited to announce our collaboration with Coindex Capital Management!
In a first-of-its-kind strategy, Coindex has deposited $50,000 worth of Yearn CRV (yCRV) into the Issuer side of the ‘Why CRV’ Resonate Pool with a Purchaser already arranged for this exchange. Through this, they’ve received roughly 27.5% fixed-rate yield in USDC, with only two-week lockups required. Scaled iterations of this deal, and similar ones already in the pipeline (see Redacted article), are expected to deliver significant benefits and growth to Resonate.
Coindex acts as the Issuer by locking up their Yearn CRV through Resonate for a period of 2 weeks, in exchange for an upfront USDC payout of 1.06% (~27.56% annualized). With delta-neutrality in mind, Coindex will then hedge their principal exposure by shorting Yearn CRV proportionally. Their final return will be dependent solely on the funding rate; which is historically expected to be positive most of the time (earning them extra money).
This marks the beginning of a new march forward in procuring Resonate adoption. We will continue to engage institutional funds with similar deals, along with continuing to advance our strategies with protocols and DAOs as Purchasers. There’s immense potential for active synergy between these two market participants, one of whom represents an opportunity of $20B, the other of whom represents an opportunity of $48B. Resonate has proven to be a very versatile and powerful tool, and we’re excited for what the future holds. To quote our new friends and collaborators:
“FNFTs make selling forward yield viable from an institutional perspective. Rather than getting an illiquid yield token, the yield is paid up front in hard money like USDC — we like that.”
~ CoinDex Founder, Ryan DeMattia
Resonate is a Yield Futures Protocol developed by Revest Finance and built on top of Revest’s Financial NFT (FNFT) technology. Using Resonate, we’re able to separate the principal and interest components of a position by issuing two FNFTs; one containing the principal and the other containing the rights to future interest on that principal.
Resonate facilitates the commerce of the rights to future interest by matching issuers (who want to sell their interest rights for a one-time upfront payment), and purchasers (who want to buy the rights to future interest for a one-time upfront payment).