Raricapital
Raricapital: DAI in Rari Capital’s Tranches
Rari Capital’s Tranches offering used Saffron Finance’s risk exchange to provide customized risk and return profiles. Tranches used the Yield Aggregator’s DAI pool as the underlying pool for that customization.
Updated- Exchange model
- Peer-to-peer risk exchange
- Asset scope
- DAI through Rari Capital’s Yield Aggregator DAI pool
Yield allocation and risk customization
| Component | Role in the documented design |
|---|---|
| Yield Aggregator | Sought yield by reallocating deposited funds among yield opportunities. Its DAI pool was the underlying pool used by Tranches. |
| Tranches | Used that DAI pool for Saffron Finance’s peer-to-peer risk exchange, with customization focused on risk and return profiles. |
The distinction separates the management of deposited assets from the customization of exposure to their risk and return. Saffron’s tranches in the December 2020 partnership announcement used two-week epochs, with liquidity locked in exchange for payouts.
Historical qualifications on yield claims
Earn pool operation was challenged in the SEC’s September 18, 2024 enforcement announcement. The agency alleged that rebalancing often required manual input, which Rari Capital sometimes failed to initiate, despite claims of autonomous operation. It also alleged that advertised annual percentage yields failed to account for various fees. Those allegations concerned Earn pools; they shouldn’t be treated as Tranches-specific payout terms.
Rari Capital and its co-founders agreed to settle without admitting or denying the allegations. The announcement stated that those court settlements were subject to approval.
