Sector Finance, earn yield based on your own risk preference. All the basic information about this new DeFi project.
Sector Finance is a decentralized application that creates risk-adjusted financial products and informs users about their risk exposures in order to accelerate the adoption of digital assets.
Sector Finance, what is it?
This project propose three core products:
1. The risk engine
2. Single-strategy investments vaults
3. Aggregator vaults
The risk engine evaluates and organizes the crypto-risk of our single-strategy investment vaults. The platform then creates structured product vaults that aggregate investment strategies to match the exact risk profile of a user.
While risk is an inherent aspect of investing, it is important that both individual and institutional investors are not subjected to the risks associated with poorly constructed products and obscure risk assessment methods.
Sector Finance aims to promote the widespread adoption of digital assets by developing innovative financial products and providing investors with information regarding their risk exposures.
If you regularly follow DeFi’s news, you can see that this project is rather exclusive, see why through its FAQ.
What are structured products?
Structured products combine multiple investment vehicles into one instrument.
How is Sector’s Risk-Tranched Vaults different from a TradFi CDO?
CDOs were popularized during the mortgage loan boom-and-bust cycle that ended with the Great Recession. The CDOs that were built during that period of time did not have a strong emphasis on risk management and were constructed in a careless manner. Further, these CDO types were mainly backed by a pool of loans.
Sector’s CDOs are fully transparent and verifiable, meaning anyone can see how they are constructed and what they are backed by. In general, they are backed by a pool of yield-bearing digital assets.
What does it mean to be delta-neutral?
Delta refers to the change in an option’s price with a $1 change in the underlying asset price. To be delta-neutral, multiple investment positions are undertaken simultaneously, so the overall delta of the strategy is zero.
What is Sector’s risk management mechanism?
We estimate the value at risk over the course of the year for each strategy. We analyze a variety of risk factors, like hack risk, or liquidation risk and sum them to obtain a total VaR. VaR is then converted to a relative risk score between 0 and 10.
How do I see my deposits?
Once you connect your wallet, your active deposits will appear at the top of the Strategies or Vaults page.
Will I receive vault tokens when I deposit?
How do I withdraw my funds?
In non-epoch strategies, withdrawals are instantaneous.
In all other vaults and strategies, withdrawals are a two-step process and require two separate transactions.
In Epoch-based vaults and strategies withdrawals are processed monthly (unless otherwise indicated).
In non-epoch aggregator vaults, withdrawals are processed in batches every 24 hours.
Request Withdraw – vault token is sent back to the vault and the request is added to the queue
Withdraw – complete the withdrawal once the request has been processed and receive funds
Where can I see each vault’s historical performance?
You can view the historical performance of each vault and strategy on the corresponding page.
What is the fee structure?
Both vaults and strategies may charge a:
Performance fee (defaults to 10%)