# InfiniFi

> English version of InfiniFi deepdive

**Published by:** [kazumayu.eth](https://paragraph.com/@kazuma/)
**Published on:** 2025-06-24
**URL:** https://paragraph.com/@kazuma/infinifi-1

## Content

Deposit https://infinifi.xyz?ref=QWN7FGQX If you just wanna deposit, here's the link for it. If you deposit without changing any settings, your funds will go into the lowest-risk, no-lockup option, The current APY is around 8%. There are no withdrawal fees, only gas fees. +1x point multiplier.When you deposit, you'll receive a receipt token called siUSD, which is a yield-bearing token. The main strategies are low-risk lending and LPs on platforms like AAVE, Fluid, and Morpho, with a portion also allocated to mid-risk strategies like Pendle and Ethena. (More details in the sections below.)PendlePendle - Liberating YieldPendle is a DeFi protocol focused on yield trading, allowing users to both fix or leverage their yield.https://app.pendle.financeInfiniFi’s point multiplier jumps from the previous 1x to 4.5x here. The YT here is based on iUSD, which itself is just a regular stable coin soft pegged to USD, it has no yield (unlike the staked version mentioned earlier, which does earn yield). Whihch means YT carries a maximum loss risk. The LP currently yields around 5.5%, with potential additional yield from airdrops, and Pendle's LP mechanism gurantees no IL and no loss in underlying asset = $iUSD if you hold till maturity.What's Fractional ReserveTraditional banking operates under a fractional reserve system, where banks aim to generate profit by keeping only a portion of customer deposits readily available for withdrawals, while allocating the rest into longer-term assets like U.S. Treasuries or corporate bonds. Over time, this system has been refined to ensure liquidity by staggering asset maturities—so that some portion matures daily—while still allocating funds into less liquid instruments. This method is commonly known as “laddering” and helps reduce the risk of a bank run. InfiniFi argues that the root cause of historical bank failures lies not in the structure itself, but in a lack of transparency and trust. Even if a bank holds enough assets (both liquid and illiquid) to cover all deposits in the long term, a lack of depositor confidence—due to unclear communication—can lead to collapse.📌InfiniFi's approachInfiniFi assumes that longer-term, locked strategies (like Pendle’s PT or Ethena’s sUSDe) offer higher yields, while fully liquid options (like AAVE) provide relatively lower returns. To optimize across user preferences, it collects capital from both users who are okay with locking their funds and those who aren’t. Using user-provided data to estimate daily withdrawal needs, InfiniFi keeps just enough liquidity for expected redemptions and deploys the rest into locked, higher-yield strategies—essentially replicating what banks or stablecoin issuers like Tether and Circle do, but fully on-chain.Both types of users can earn higher yields, locked or unlocked, just like a bank, the protocol keeps only the necessary liquidity to meet expected withdrawals from non-locking users—while deploying the rest into higher-yield, locked strategies. (Now 25% of funds are kept as immediate liquidity)Details🔓 No Lock-upAssume a 5% APY from depositing into something like AAVE.Let’s say the protocol receives a total of $100 in deposits. → 10% is actually kept in liquid AAVE, while the remaining 90% is deployed into higher-yield, locked strategies. = Annual yield generated: $0.50🔐 With Lock-upAssume an 8.5% APY from strategies with soft withdrawal limits like Pendle or Ethena. Again, let’s assume $100 deposited into this option. → That $100, plus $90 borrowed from the liquid side, is deployed. = Annual yield generated: $16.15Yield DistributionTotal yield across both pools is $16.65. → 60% is distributed to the locked depositors, 40% to the liquid ones.Yield for no-lock users: 5% → 6.5%Yield for lock-up users: 8.5% → 10.15%Both locked and unlocked users get higher yield in theory. Because, just like a bank, InfiniFi allocates a part of liquid funds to illiquid yield sources and use that as an added yield source to boost everyone's yield in the system. Unlocked Yield, withdraw anytime as long as there is enough liquidity.Locked Yield, You don't determine how long you lock, you determine how long you can wait when you make a withdrawl requestVotinghttps://app.infinifi.xyz/vote InfiniFi’s voting system allows users with locked funds to participate in asset allocation decisions, effectively decentralizing strategy management. Users who lock their iUSD for longer durations and opt in to governance can vote on where funds should be deployed—such as AAVE, Pendle, Ethena, or other strategies—potentially influencing the protocol’s yield profile. However, this added control comes with additional risk: in the event of a hack or loss, these users are the first to absorb losses, and those with longer lockups and active participation in voting are hit hardest. This design aligns incentives by rewarding engaged users with higher yields while tying risk to decision-making influence.$iUSD$iUSD= Their main stable coin, soft pegged to 1 $USD$LiUSD= Locked version of $iUSD、High risk, High return$siUSD= Staked version of $iUSD, you can withdraw anytime as long as there is sufficient liquidity$LiUSD & $siUSD are yield bearing token, you can realise that yield when you redeem or swap them back to $iUSD or token of your choice.PointThe points program runs for a limited 6-month period (let's see if they keep their promise or not), with the dashboard updating hourly. Since a large portion of assets is allocated to Ethena, most actions also earn Ethena points.Minting and simply holding iUSD (no yield): 2x pointsMinting and staking (lowest yield, lowest risk): 1x pointsProviding LP: 3x base pointsPendle YT and LP: 4.5x boost, plus 2x Ethena SatsLonger holding periods also receive additional boost multipliers.$vePendle holders hold more than 2k $vePendle gets additional boostspecifics on Ethena Sats are as following tweet infiniFi @infinifilabs 6/ With the partnership, there are several new venues to earn both infiniFi points & Ethena Sats: → Deposit & hold iUSD Earn 2x SATS + 2x infiniFi points → Deposit & lock iUSD Earn 5x SATS + 1x infiniFi points → Balancer siUSD/sUSDe Earn 30x SATS + 1.5x infiniFi Points → 8 12:15 AM • Jun 18, 2025 Pendle vs siUSDThese two methods are essentially the most hustle-free, low risk way to farm InfiniFi, I made a table comparing the point farming effeciency. Pendle LPPendle YTHolding $siUSD Point Multiplier4.5x4.5x * YT Leverage1xYield Sources5% Base Yield+ AirdropNone8%~13% variable yield + AirdropPoint simulation on 1k capital≈37 pts≈2,322 pts≈10 ptsActual Yield on 1k capital+10.8252 $iUSD-1000 $iUSD+16.57 $iUSDPoint accrual rate w/o multipliersRiskshttps://docs.infinifi.xyz/risksLiquidity https://dune.com/bob_dinkytown/infinifi According to the Dune dashboard, out of the current 32M iUSD supply, around 2M is available as immediate swap liquidity on AMMs. Beyond that, there is also a liquidity buffer, which enables instant redemptions directly within the app. The exact onchain info, transparency dashboard is still in progress, but according to their team membe, currently 25% is in the buffer, much higher than trad banks' 10%.The risk, similar to traditional banks, is that in the event of a bank run, there are still backing assets, so a total loss is unlikely. InfiniFi claims that if a bank run occurs → iUSD depegs → arbitrage will gradually restore the peg through market activity. The “bank run” here refers specifically to a situation where their instant liquidity fails to meet withdrawal demand.Hacking, Exploitshttps://docs.infinifi.xyz/audits In the event of a hack, the system is designed so that users earning higher yields—those with locked positions—absorb losses first. Among them, those with longer lock durations and who participated in asset allocation votes take the biggest hit. Users in standard iUSD staking without lock-up are the last to incur losses, and only if the locked users have already been fully wiped out.Disclaimer This blog provides general information and does not constitute investment advice or individual recommendations. Users are solely responsible for their actions based on the information provided and should assess their own risks. Cryptocurrencies involve significant risk. Price volatility, market instability, regulatory changes, and other factors may result in partial or total loss of funds. The information on this site does not guarantee future outcomes or profits. The information provider assumes no responsibility for any damages or losses resulting from the use of this site. Users must fully understand the risks and make investment decisions accordingly. This service is intended only for general informational purposes and does not include personalized advice.

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