Fantasm Finance Launches Synthetic Assets on Fantom
Dear Fantomians, we’re excited to announce the launch of Fantasm Finance!
What: Synthetic Tokens
Where: fantasm.finance/
Website Launch: 28 Feb 2022 at midnight UTC
Farming Launch: 01 Mar at 2pm UTC
Liquidity: SpookySwap DEX
Chain: Fantom Network
Fantasm Finance is a DeFi project aimed at developing and popularizing synthetic tokens for the Fantom Ecosystem. Imagine having exposure to the price of FTM token without actually owning it. That’s not fantasy: it’s #Fantasm.
What Are Synthetic Tokens?
In the broadest sense, synthetic assets are a type of financial derivatives giving its owner exposure to an underlying asset without having to actually hold it.
A synthetic asset is simply a tokenized derivative that mimics the value of another asset. Imagine that you want to trade Gamestop stocks without holding the $GME asset itself. Or, you want to gain exposure to S&P500 index movements without having to hold the underlying basked of stocks? No problem. What about gold and silver? Sure.
How about…something more exotic like becoming a Bitcoin miner without owning any hardware but simply by holding the right synthetic asset. Well, all this already exists, and it’s the evolution for many asset classes that wish to gain exposure to the decentralized and tokenized world of cryptocurrencies. The rabbit hole is very deep, anon.
Introducing the Synthetic FTM: xFTM
The xFTM token is the first synthetic asset to be launched by Fantasm Finance on 1st March.
xFTM is a synthetic token pegged to the price of the FTM cryptocurrency on the Fantom Network
It is a fractional-algorithmic synthetic token pegged 1:1 to the dollar value of 1 FTM. In other words, the price of 1 xFTM equals 1 FTM.
In order to mint 1 xFTM, users need 2 tokens: FTM and FSM — Fantasm’s native token. Let’s continue talking about our FSM token.
Introducing FSM — Fantasm’s native token
Fantasm’s native token FSM is the key ingredient in creating any synthetic asset on the Fantasm platform. An example below will show how xFTM is created by combining FTM and FSM tokens.
- Assume that the Collateral Ratio (CR) is at 80%
- In order to create (mint) 1 xFTM token, the user needs to provide 80% worth of FTM (CR=80%) and 20% (1-CR=20%) worth of FSM token
- The Collateral Ratio, expressed as a percentage, defines what percentage of FTM and FSM is needed to mint the xFTM token.
- The Collateral Ratio also applies when redeeming xFTM. Redeeming means that the user “destroys” his xFTM and gets FTM (CR=80%) and FSM (1-CR=20%) tokens.
To read more about the xFTM minting and redeeming mechanics design, and our tokenomics, please visit our Fantasm documentation. We have a very attractive and sustainable farming model, combined with FSM staking and locking mechanisms for revenue sharing economic model.
Benefits for FSM token holders
There are many benefits and not all of them are obvious so let us name a few:
- Seignorage revenue. Each minting and redeeming of synthetic assets like xFTM on Fantasm incurs a 0.30% and 0.50% fee, respectively. These fees are distributed as FTM and FSM dividends to users who lock their FSM on the platform.
- Capital Efficiency. The capital required to mint xFTM is only partially denominated in FTM. The remaining portion is denominated in FSM, which is required as collateral. This requirement creates both a natural demand for FSM, as well as captures value.
- New synthetic assets > more utility and liquidity for FSM token.
- Integration of synthetic assets with other DeFi projects to develop and unlock new trading strategies (derivatives trading, leveraged trading/farming, other exotics)
- Besides FTM and FSM revenue for users who stake their FSM, stakers also earn 50% of the penalty fee from FSM/FTM and stablepool (xFTM/FTM) farmers who claim their rewards early
- The Fantasm team are Fantom Ecosystem users and supporters. The xFTM synthetic token explicitly gives FTM holders another great use case and a way to earn yield via additional rewards on top.
Closing Thoughts
Synthetic digital assets are revolutionizing decentralized finance by offering access and liquidity to investors.
Through tokenization, individuals can access investment opportunities that might otherwise be impractical for their situations, democratizing finance and providing increased access to the promising investments of the future. Since transactions are handled entirely on the blockchain and facilitated through self-executed smart contracts, entering and exiting from investments with instantaneous liquidity has never been easier.
Save the date!
Website Launch: 28 Feb 2022 at midnight UTC
Farming Launch: 01 Mar at 2pm UTC
Website: https://fantasm.finance/
Docs: https://fantasm-finance.gitbook.io/
Discord: https://discord.gg/QRVcMBmNcc
Twitter: https://twitter.com/fantasmfinance
Telegram: http://t.me/fantasmfinance
Telegram ann: https://t.me/fantasmfiann
Medium: https://medium.com/@fantasmfinance
