Geist Finance is a lending platform on Fantom based on the successful DeFi protocol AAVE. The Geist protocol is unique in that there is no governance and there are no Venture Capitalists involved. The developers place a strong emphasis on the protocol’s permissionless nature and its revenue earning token which shares platform fees with token holders and liquidity providers.
The Geist Finance token is a revenue sharing token known simply as GEIST. GEIST has a total supply of 1,000,000,000. Allocations are as follows:
- 40% emitted to lenders and borrowers over a period of five years
- 20% emitted to GEIST/FTM liquidity providers over a period of five years
- 20% is allocated to airdrops, incentives and bribes to other DeFi communities to grow the protocol and establish partnerships. These will be emitted over a minimum of one year (including Curve gauge bribes and others listed below)
- Airdrop recipients receive their GEIST vested.
- Airdrops have a limited claim period.
- These tokens are released linearly over one year and target various communities and token holders. The AAVE, Lobster DAO and Ellipsis communities received the initial airdrop. Subsequent token release will be used to accumulate votes on the Curve Fantom gPool via vlCVX and veCRV bribes.
GEIST holders are awarded 50% of protocol revenue generated from lending when they stake or lock their GEIST. Both lenders and borrowers receive rewards. All rewards are vested for 3 months. Rewards can be claimed at any time, but if claimed during the vesting period they will be subject to a 50% penalty. The penalty collected is only awarded to users who have locked their GEIST for three months.
Users can lock their funds for three months to receive additional rewards. Those who lock their GEIST receive the penalty fees taken from users who withdrew their vested positions early. Users cannot exit a lock early. The rewards from locking can be claimed at any time with no penalty. All locks are grouped by date so locks entered on Thursday of this week will unlock at the same time as locks entered on Friday.
PODL or Protocol Owned DEX Liquidity
Geist uses a module called the Protocol Owned DEX Liquidity (PODL) module that works to ensure that there is always liquidity in the GEIST/FTM pool. The Geist team has an excellent infographic explaining how this works:
Let’s break it down. The protocol takes 25% of all Fantom fees collected by the treasury for borrowing and puts it up for sale on the module. This Fantom is sold to qualifying users in exchange for GEIST/FTM LP tokens at a 10% premium, meaning users selling the LP for 10% more than its component assets are worth on the current market. The protocol then takes the LPs and stakes them forever. This serves two purposes: reducing the total supply of GEIST and Fantom available on the market and ensuring there will always be liquidity in the GEIST/FTM pool. Theoretically, this will push the price of GEIST up as more and more is locked up forever.
To qualify for this exchange, users must have GEIST locked in the protocol. Users with 10,000+ GEIST can purchase all the available FTM at once, with a one week cooldown.
Users must deposit assets in order to take out loans. When depositing, users are issued a gToken variation of the asset deposited. This gToken functions as both a receipt for the deposit and mechanism for rewarding depositors. Users can choose to deposit assets but not have them used as collateral.
gTokens holders receive yields from the following:
- The interest loans – Depositors claim the interest paid by borrowers. Calculated by averaging borrow and utilisation rate. The higher the utilisation of a reserve the higher the yield for depositors.
- Flash Loan fees – Depositors receive a share of the Flash Loan fees corresponding to .09% of the Flash Loan volume.
Users can also earn Curve rewards by depositing their gToken stablecoins on Curve.
GEIST borrowing works like most other lending protocols on Fantom. All loans are over collateralized and the total amount one can borrow is limited by the type of asset provided. If a loan’s health factor falls too low the collateral can be liquidated by the protocol. There is no limit to how long a loan can be open so long as its health factor remains positive.
For more details, please see our article on “DeFi Lending”.
Crypto loans function very similar to secured lines of credit, but better. Users lock assets that are illiquid but yield bearing in order to borrow more liquid assets that can then be reinvested. A basic real world example would be posting your house as collateral for a traditional loan and taking the cash and investing it in a business. The benefit is the user keeps earning the yield on the underlying asset while also being able to expand their portfolio. This increases capital efficiency as your working capital increases without any loss to your assets.
Team and Community
The Geist team has chosen to remain largely anonymous. The best places to contact them are Discord and Telegram. Announcements are typically done on Telegram and Discord while their Medium page is for more in depth articles.
Geist has been audited by solidity finance and peckshield. All admin rights are owned by a TimeLock contract with a 2 day delay. All contracts are non-upgradeable and the team has no intention of performing any upgrades. Contracts are secured by a 3 /5 multisig. Multisig owners:
- Michael Chen (Fantom Foundation)
- Eerie (SpookySwap co-founder)
- 0xngmi (co-founder DefiLlama)
- Aveen Hujiari (co-founder Geist)
- Charlie (Curve Finance)