What is Affine?
Affine is the easiest way to invest and save in cross-chain assets in Crypto
Overview
Affine is the world's first cross-chain investment and savings app. We make it simple for users to onboard funds in an efficient and affordable manner using Polygon while gaining access to investment opportunities on multiple chains. Today, this includes Ethereum and Polygon but and we plan to expand to other chains and protocols in the future.
We are currently in our Mainnet where we invite the community to invest with Affine and give feedback. There are a few components of what we collectively call "Affine" that are worth noting:
The Affine Protocol
The Affine Protocol is everything that enables the trustless and decentralized execution of our cross-chain investment and savings solutions. Specifically, today this includes the smart contracts that power our investment baskets and in the long run, may include elements related to governance and upgradability.
The Affine App or Interface
The Affine App is how most users will interact with the Affine Protocol. Users may still interact with the Smart Contracts directly but the vast majority will leverage the App to buy and sell underlying Affine assets. The Affine app is a dedicated interface that is designed to help users more easily view, manage, and transact with their self-custodied Affine baskets.
How it Works
Affine works by providing an easy-to-use entry point for investing in multi-chain assets. We call these abstractions "baskets" and they are made up of underlying "strategies". We describe more below:
Strategies
Strategies are the atomic unit on Affine. You can think of this as a specific transaction that you can make today by buying Bitcoin, Ethereum, Lending USDC on Compound, etc. These are a relatively simple but there are innumerable strategies that can be implemented. You can read more about the various strategies we support here.
Baskets
Baskets are diversified and dynamically rebalancing vaults that provide exposure to one or more strategies. They provide users the benefits of a diversified portfolio by interacting with numerous assets or protocols with the ease that comes with holding a single asset. In particular, assets can contain one or more underlying strategies. A strategy is simply a given asset allocation. For instance, a strategy might be holding Bitcoin, Ethereum, lending USDC out on Compound, etc. When combined in some proportion, these would be considered a basket. This is analogous to a pre-constructed portfolio.
Yield Bearing Baskets
Yield-bearing baskets are those that have strategies that provide yield to users. The most common examples are baskets containing strategies like lending USDC on Compound or Aave. Alp Save is our Testnet version of a yield-bearing basket.
Token Baskets
Token baskets contain strategies that provide direct price exposure to a given asset such as Bitcoin or Ethereum. Alp Large is our Testnet version of a token basket. Mechanically, the vault purchases wBTC and wETH on Polygon so that your holdings in the Polygon vault are backed by holdings of wrapped assets.
Protocol Mechanism
When a user buys tokens in an underlying basket vault, the following occurs. This process varies slightly based on the type of basket so the illustration explains the most complex scenario where cross-chain activity occurs.
On Polygon, users buy basket tokens with USDC.
These tokens are a claim to the vault's underlying assets. When new tokens are minted and the USDC is transferred to the contract, the smart contract dynamically allocates these assets into the necessary protocols.
For example, part of the USDC will be lent out on Aave on Polygon while the remainder will be bridged to L1 where they are then lent out on Compound. A user's tokens grow in value proportional to their vault TVL and total amount minted.
When a user sells these tokens the process occurs in reverse.
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