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Introducing Fusion Protocol
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January 28, 2025

Introducing Fusion Protocol

A novel DeFi protocol for customizable, modular, and fractional yield vaults by One Click.

Introducing Fusion Protocol

The One Click Fusion Protocol introduces a decentralized finance (DeFi) solution leveraging the ERC-7208 standard to create customizable fractionalized yield vaults by enabling the bundling, fractionalization, and dynamic management of yield-generating assets.

This framework supports a modular asset management ecosystem. Features include advanced governance models, tiered risk strategies, auto-compounding, and loyalty incentives.

The goal is to establish a scalable, efficient, and user-driven asset management protocol, aligning capital efficiency with community-centric decision-making.

What is ERC-7208?

The ERC-7208 standard, also known as the “On-Chain Data Container” standard, is an Ethereum Improvement Proposal (EIP) designed to enhance the functionality and interoperability of tokens on the Ethereum blockchain, particularly focusing on managing on-chain data related to real-world assets (RWAs) and other complex token use cases.

Core Concept:

  • Decoupling Logic and Storage: ERC-7208 introduces a framework where the logic for managing on-chain data is abstracted from the storage, allowing for more flexible and adaptable smart contracts. This is achieved through:
  • Data Objects (DOs): These are dedicated storage contracts that hold the underlying data.
  • Data Managers (DMs): Interfaces or contracts that define the behavior or logic for interacting with Data Objects.

Key Features:

Modular Architecture: Allows for assets to be “wrapped” into Data Objects, making them adaptable to different token standards without changing the core data storage.

Interoperability and Adaptability: Provides mechanisms for tokens to interact across different standards, facilitating the use of assets with existing protocols and dApps. Encodes data in bytes32 for broad compatibility with future data structures or types.

Omnichain Capabilities: Assets can be traded across multiple blockchains simultaneously, enhancing liquidity and investor access.

Compliance and Security: Implements hooks and triggers for automatic compliance with regulatory frameworks. Enhances security by separating data management from the asset’s core logic, reducing risks associated with smart contract vulnerabilities.

Customization and Upgrades: Allows for the modification of an asset’s logic post-deployment, such as changing compliance rules or adapting to new standards without altering the data itself.

One Click Fusion Protocol

We have created a decentralized, community-governed asset management platform where users can build layered, custom yield vaults tailored to diverse risk and return profiles.

By integrating yield-splitting and flexible governance, this protocol transforms DeFi into a user-controlled ecosystem that mirrors traditional finance’s ETF structures but operates with transparency, composability, and community involvement.

The protocol aims to democratize decentralized asset management by:

Community Ownership: Governed by users through token-based voting systems.

Accessibility: Opening access to multi-strategy portfolios for users with varying capital levels.

Transparency: Creating a fully auditable and community-driven

Vault Architecture

There are two types of vaults that currently exist under this framework:

  1. Tokenized Vaults: Composite vaults are tokenized using ERC-7208, allowing seamless wrapping/unwrapping of assets.
  2. Multi-Tiered Vaults: Vault tiers align with user-defined risk and reward preferences with 4 tiers:
  • Principal-Protected (Low Risk): Stable yields, capital preservation.
  • Balanced Yield (Moderate Risk): Diversified strategies with a mix of stable and variable assets.
  • Smart Yield (Advanced Risk): Delta-neutral strategies balancing risk and yield.
  • Leveraged Yield (High Risk): Aggressive strategies for maximum yield potential.

Rebalancing and Flexibility

The protocol facilitates the creation and management of composite yield vaults through the use of ERC-7208, empowering users to bundle assets, combining yield-bearing tokens into a single vault token.

This setup allows for fractional ownership, making shares of these complex vault structures liquid and tradeable. Additionally, the protocol supports dynamic rebalancing where community-driven governance regularly adjusts asset allocations to optimize performance.

Users can also leverage Vault-as-a-Service (VaaS) to create custom vaults tailored to specific risk profiles and return objectives, which are then tokenized and can be traded on secondary markets.

Yield Mechanics

The Fusion Protocol introduces innovative yield management where users can engage in Yield Futures to lock in future yield for immediate liquidity or speculative gain. Additionally, Perpetual Streams allow for the creation of continuous yield streams, providing a stable source of passive income.

The system also features Auto-Compounding, which maximizes returns by automatically reinvesting earnings, harnessing the power of compounding to grow wealth within this fantasy-themed DeFi ecosystem.

Where to from here?

The future direction of One Click is set to expand into the realms of synthetic assets and real-world assets (RWAs), where we plan to introduce yield-backed vaults linked to commodities like gold, silver and carbon credits, alongside decentralized real estate investments that offer fractional ownership and income-sharing opportunities from tokenized properties.

We aim to leverage AI-driven yield optimization, employing machine learning models to dynamically rebalance portfolios and maximize yields in response to shifting market conditions, while also providing personalized investment strategies tailored to individual user profiles.

To enhance user engagement, we will introduce gamified elements, such as Achievement NFTs for rewarding governance participation and reaching significant milestones, alongside the Degen Vault Programs which will establish loyalty tiers that grant users exclusive rewards, increased yield multipliers, and a stronger voice in governance.

Soon we will be releasing registration for Infinity Vault 001, which will be released in public closed beta and will be focused on simplified fractionalized yield with ERC-7208 based versions to follow in the future.

This vault comes in partnership with 10 DeFi protocols with additional rewards multipliers available exclusively through One Click!

To keep up to date follow us on X, sign up to the early list HERE and join us in Discord!

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