Introducing the Financial Abstraction Layer (FAL): The Engine Powering Programmable Investment Strategies

As decentralized finance matures, the demand for institutional-grade trading strategies that can seamlessly operate across both DeFi and CeFi has never been greater. Meeting this demand requires more than smart contracts alone. It requires a unifying infrastructure capable of abstracting complexity while preserving transparency, composability, and on-chain verifiability.

This is precisely the role of the Financial Abstraction Layer (FAL), the core technical infrastructure developed by @Lorenzo Protocol

The Financial Abstraction Layer (FAL) is a modular execution and settlement framework designed to tokenize, execute, and distribute trading strategies across decentralized and centralized financial venues.  #LorenzoProtocol

At the heart of FAL is its ability to create and manage On-chain Traded Funds (OTFs)—tokenized investment vehicles that function as transparent, composable, and programmable funds.

FAL provides the full backend stack required to operate OTFs at scale, including capital routing across DeFi protocols and CeFi venues, Net Asset Value (NAV) accounting with verifiable on-chain settlement, multi-format yield distribution, supporting reinvestment, claimable rewards, or tokenized returns. $BANK

FAL is built around a robust and repeatable execution model that ensures efficiency, transparency, and capital safety. Each strategy follows a clearly defined three-step cycle:

1. On-Chain Fundraising

Capital is raised directly on-chain through smart contracts. Participants deposit assets into an OTF, receiving fund tokens that represent proportional ownership and exposure to the underlying strategy.

2. Off-Chain Trading Execution

Once capital is raised, strategies are executed off-chain across CeFi and advanced trading environments where liquidity, tooling, and execution efficiency are optimal.

3. On-Chain Settlement & Distribution

After execution, results are settled back on-chain. $BANK