Guiding Principles of Formation Fi

Formation Fi is now underway. Like a story that unfolds one chapter at a time, it will keep evolving-while staying aligned with the same destination: DeFi prevails and everyone prospers. This isn’t a tale, though; it’s an operating playbook for driving a major shift in paradigms. And any change that matters starts with clear guiding principles. Here they are.

Chain Agnostic

Early DeFi is a patchwork of protocols, chains, dapps, tokens, pools, and other creations. Some connect well; many don’t. Most are limited to their own vertical ecosystems. Getting the best investments across all of them-manually and all at once-is practically impossible. Formation Fi will therefore approach the space holistically, with the aim of being chain-agnostic and broadly inclusive. From the ideals of crypto and Web3, we expect the internet of value-where every blockchain is linked seamlessly through a decentralised system of bridges and relays, functioning as the transport layer for money. We’ve begun work toward that future. Our intent is to let all kinds of DeFi assets move from point A to point B quickly and smoothly, without friction. We want to make dependency on the network irrelevant. Put simply, members of Formation Fi will ultimately be able to add any category of uncorrelated DeFi assets available in Web3 to their portfolio-regardless of the asset’s underlying protocols, regardless of what’s already in the portfolio-and earn profits from the network of their choice.

Low Transaction Costs

DeFi participants have learned that fees can shrink capital at a rapid pace, blocking access to some of the more complex protocols. Ethereum costs were nearly prohibitive in 2020-21 for many yield farmers, pushing them toward other chains with different trade-offs in scalability, decentralisation, and security. Formation Fi will work to reduce members’ costs wherever possible. There are two main categories of expenses: fund management fees and the gas/network fees charged by the underlying protocols. Many Wall St. hedge funds typically take more than 30% of fund profits as management fees and carried interest. Formation Fi will charge a notably lower management fee (only 5%) and will also share profits with holders of the Formation Fi token, $FORM. Costs related to gas/network and other on-chain services-such as oracles-will be kept low as well. For instance, when it makes sense, rather than rely on costly price feed oracles, we will use sets of APIs or create our own oracles to deliver the same outcomes. Over time, and as decentralisation increases, we expect on-chain costs to fall. Formation Fi will always aim to cut expenses and share those savings and profits with members and token holders.

Radical Simplification

Many early yield farming protocols were assembled quickly to capture as much of the booming market as possible. Features such as the user interface and automation weren’t handled with priority. That has resulted in an investing process where 50% is repetitive and demands a high level of attention and expertise. This discourages new investors, frustrates anyone except the most seasoned participants, and makes expensive mistakes far too easy. Formation Fi will focus on creating a user experience that is as straightforward and efficient as possible. We will build algorithms and bots that anticipate needs and remove repetitive steps. The user experience will be designed to feel simple and genuinely enjoyable to use. In other words, we’ll let members spend their time investing-not dealing with a screen.

Investment over Speculation

First-generation yield farming often centered on betting that the next coin could surge 100x and squeezing maximum returns from the newest opportunity. Farmers rushed in without fully understanding the risks, and over time they typically give up ground to gas costs, impermanent loss, slippage, and other hidden fees. Formation Fi leads the move to a second generation. We will encourage and enable members to build structured, reasonable portfolios rather than stacks of random coins. Second-generation yield farming is about intelligent investing-balancing quantitative risk with reward. This approach was introduced by Benjamin Graham in his book The Intelligent Investor and later used heavily by Warren Buffet. We’re applying methods and skills refined over decades on Wall Street, translated through algorithms into DeFi. Our goal is to create personalised funds that not only aim to capture market peaks, but also provide protection during downturns.

Communal Effort

DeFi is accelerating because many people can clearly see the advantages of transparency and community governance compared with centralised banks-institutions that often hide fees and participate in confidential backroom deals we’ll never get to see. Community is what makes DeFi compelling, but governance through the community is a double-edged sword. You can vote and earn yield rewards, yet you must also put up your stake, and in practice, only whales can consistently produce meaningful results. Formation Fi is set to change that. Ultimately, through progressive decentralisation, our DAO will deliver open governance by financially rewarding long-term participation and providing exclusive original research and quantitative analysis. We aim to empower a new class of yield farmers to manage their assets directly, improve their risk-adjusted outcomes, and grow into stronger investors. Together, we can show-profitably-that DeFi and DAOs can outperform in the real world.

Long-Term Focus

So far, yield farming has largely been a fast in, fast out style of activity. First-generation farmers were frequently risk-seeking ‘degens’ who chased the excitement of the 100x idea-so if one coin failed, they simply moved on to the next. That isn’t investing, and Formation Fi is not designed for short-term gambling. Second-generation yield farming is for investors who want disciplined, thoughtful management over the long run, with conservative exposure to crypto. DeFi is maturing, and Formation Fi intends to lead the way. Our algorithms will create personally tailored, risk-adjusted indexes for long-term use and can automatically reinvest yield across multiple chains-so members benefit from compound interest. Future development, shaped by the DAO community and built around progressive decentralisation, will help create a safe, intelligent, and personalised environment for our members.

Constant Innovation and Safety

Innovation is assumed as part of DeFi, yet for many it becomes a buzzword-meaning they jump onto the latest trend and branch into a dozen random directions. The biggest victims are often the users when things collapse, taking their capital with it. Formation Fi will do better than that. We have a strategic direction: building low-risk wealth for everyone. The drive for innovation-along with safety-stays with us every day, keeping us resilient, pushing us to surpass ourselves, and challenging us to be better than yesterday. Our motivation is internal because we believe in the project’s purpose. We will take direction from the DAO community and regulation, adopt progressive decentralisation, and not hide behind security audit reports. We will treat the TVL as if it were our own money and work to protect it to the best of our abilities.