Understanding Fulcrom Finance and the tokens powering the perpetual swap
FLP
FLP is an index token that represents the assets in the Fulcrom Liquidity Pool, which includes BTC, ETH, USDT, and USDC. It can be minted using any of the tokens in our index pool and redeemed for any of the tokens in the pool.
The value of FLP is determined by the total worth of assets in the pool and it also serves as a counter-party to the trading activity on the platform, meaning that traders’ profits and losses will impact the value of FLP.
In other words, when traders lose, FLP wins, and vice versa. However, it does not mean that when a majority of traders win, FLP will encounter a drastic change in value. For example: If the majority of the traders have a long position on the platform and the asset prices are going up. The value of FLP goes up too as FLP is an index token.
The portion reserved for long positions can be treated as stable in terms of its USD value since profits from the increased asset price from that portion can be used to pay traders. And should the asset prices decrease, the losses of traders will keep the USD value of the reserve portion the same.
FLP holders are also entitled to 60% of the trading fees paid by traders on the platform, making them the largest beneficiaries of Fulcrom’s transaction volume. This yield will be given back in CRO.
The weightage of each index token is dynamic and will be adjusted according to the open positions in Fulcrom (ex stablecoins weightage will be higher when ETH shorting positions increase). This helps to hedge FLP holders against market risks.
With that, FLP token provides exposure to the trading activity on the Fulcrom platform and offers rewards to holders in the form of trading fees and changes in the value of the FLP indexed tokens.
FUL & esFUL
FUL is the native governance token of Fulcrom Finance.
By locking FUL, users can earn a range of rewards, including:
- Escrowed FUL (esFUL): This is a time-locked version of FUL that can be converted to actual FUL over a period of one year. esFUL rewards users with an equal amount of esFUL and revenue as locking FUL. esFUL rewards generated by staking $FLP at launch will be given at a fixed rate per second.
- Boost Points: This rewards system incentivizes long-term token holding. Every second, users receive Boost Points at a fixed rate of 100% APR. Boost Points can be locked up and earn the same amount of protocol revenue as FUL.
- Protocol revenue (CRO): These are a proportion of trading fees paid by traders to the platform.
When FUL or esFUL is unlocked, a proportional amount of Boost Points burnt. Vesting esFUL requires reserving a proportionate amount of FUL, which can be purchased if necessary. esFUL that is unlocked and deposited in the vault(s) for vesting will not be earning rewards, while FUL/FLP tokens that are locked up and reserved will continue to earn rewards.
esFUL Vesting
esFUL can be converted into FUL through a process called vesting, which happens linearly on a daily basis over the course of a year.
When vesting is initiated, the initial amount of FUL used to earn the esFUL rewards will be reserved. For example, if you earned 100 esFUL by locking 1000 FUL, then 1000 FUL will be reserved to vest 100 esFUL.
If you do not have enough FUL to be reserved, you have two options: reduce the number of esFUL you want to vest or purchase more FUL to initiate the vesting process. A user that did not unlock their initial FUL, will have sufficient FUL to be reserved for vesting purposes. However, the actual ratio of FUL reserved for vesting depends on the individual’s average staked amount and cumulative rewards earned.
Questions?
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Plus, we are running our Crew3 campaigns and up to $2000 worth of FUL tokens are to be won. More information is available here.
Let’s build the future together.
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