Introducing Fuji
Borrow bitcoin-backed stablecoins, synthetic stocks & bonds without intermediaries
Fuji is a Lightning-enabled non-custodial synthetic asset protocol on the Liquid Network. It exploits the power of Bitcoin & Elements opcodes, Taproot, and Lightning Network submarine swaps to enable the borrowing of synthetic assets against over-collateralized Bitcoin positions, such as stablecoins, and synthetic stocks, or bonds.
The first asset available will be FUJI USD (fUSD), a bitcoin-backed stablecoin pegged to the US Dollar price. Bitcoin can be deposited inside the smart contract using a Lightning Network submarine swap or directly in the form of Liquid Bitcoin, the pegged native asset of the Liquid Network.
The protocol functionality can be extended to other synthetic assets, such as stocks or bonds, that are collateral-backed and whose value fluctuates depending on the asset’s reference index.
How it works
Anyone can lock collateral into a Liquid smart contract to borrow the synthetic asset, and vice versa can burn the asset to get their collateral back. In case the value of the collateral goes underwater, the collateral can be confiscated, burning the amount of asset and presenting an oracle’s signed attestation of the reference price.
The borrower can prevent liquidation without redeeming via collateral top-up in collaboration with Fuji to create a new contract with new parameters using the collateral already locked as the source of funds for the new one.
Fuji is always the counter-party acting both as the Issuer and Liquidator, allowing automated borrowing of the synthetic asset, but can’t access collateral locked in the smart contract. Redemption of the collateral by the borrower does not need any cooperation from Fuji.
All the parameters, such as the minimum collateralisation ratio and collateral asset, are chosen by the user, Fuji only acknowledges the collateral satisfies the requested amount and uses the re-issuance token to make a new issuance.
⚡️ Lightning Network support
Faster deposits and withdrawals mean more liquidity for the protocol and open up a lot of use cases such as going long on your Bitcoin collateral and the possibility to redeem Liquid Bitcoin back to Bitcoin on the mainchain, all of this at the speed of light.
🧜♀️ Marina Wallet integration
The upcoming Fuji web application features seamless integration with Marina Wallet, a Liquid browser extension, thanks to the Marina Web Provider that allows the user to not share the private keys with the web application, which only builds the transactions that interact with the smart contract, all from the comfort of the browser, without having to install a Liquid full node.
Join the closed beta
Be the fist to try out Fuji Money. Sign-up now on https://fuji.money
Credits
The protocol is heavily based on the Vulpem Ventures research paper. It makes use of many smart contract primitives of the Bitcoin and the Liquid Network, such as HTLC-based atomic swaps to allow trust-minimized Lighting Network deposits & withdrawals and introspection opcodes of Elements Tapscript to enforce covenants on the lockup address which makes non-interactive redemption and oracle attested liquidation possible.
What is the Liquid Network?
The Liquid Network is a sidechain-based settlement network for traders and exchanges. Liquid enables faster, more confidential Bitcoin and Tether transactions and the issuance of digital assets.
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