Introducing the Dynamic Holder’s Rewards with up to 30% APY

Published in

FerrumNetwork

5 min readOct 24, 2020

Dear Ferrum Community,

After announcing the FRMx Community Drop that will happen based on a snapshot taken this Sunday, 25 October on 9pm EST, the FRMx Governance Committee has worked very hard to fine-tune the new dynamic rewards system that replaces the old tier-based system and offers much higher rewards for our Ferrum Community.

In this article, we explain the guiding principles and details of the new dynamic rewards system and explain how going forward you can benefit from very attractive monthly rewards. Enjoy!

Guiding Principles of Ferrum’s Dynamic Holder Rewards System

The rewards system has been designed according to the following principles:

Attractiveness: The new dynamic rewards system is very attractive for those holding FRM and FRMx. When holding both tokens together, you will be able to receive up to an Annual Percentage Yield (APY) of 30% for your FRM holdings — without having to lock up tokens (as with staking). This system is unique among projects and will likely attract many to the Ferrum ecosystem.
Fairness: Every Ferrum holder who qualifies for the monthly rewards (i.e. those holding at least 50,000 FRM and 1 FRMx in UniFyre Wallet) has an equal opportunity to receive attractive monthly rewards
Alignment with FRMx purpose: The model ensures that FRMx is like an American Express Black Card for FRM holders: very rare, very valuable and very useful.
Simplicity: The model is straight-forward and easy to understand.
Sustainability: The rewards structure strongly incentivizes long term holding & accumulation of both FRM & FRMx.

But how are FRM and FRMx connected in the dynamic reward model?

FRM is the Rocket, FRMx the Fuel

Before describing the reward model in more detail, we’d like to introduce an analogy that has been used a lot in the Committee discussions: FRM as a rocket and FRMx as fuel that is required to fly the rocket. Neither the rocket nor the fuel alone are very useful — only the combination of both unlocks its huge potential. This is exactly the case in the new reward model: holding only FRM in UniFyre Wallet is insufficient to receive monthly rewards — the same is the case if you only hold FRMx. But holding both FRM and FRMx together provides tremendous opportunities.

Key Features of the Model

The model includes the following key features:

Rewards are paid monthly in FRMx;
The minimum to earn holder rewards is 50,000 FRM and 1 FRMx (we have eliminated the “two tracks” because it was too complicated and we wanted to ensure that those with smaller holdings receive FRMx rewards);
The higher the price of FRM, the more FRMx you will earn;
The model is based on the ratio of 10,000 FRM to 1 FRMx;
The maximum Annual Percentage Yield is 30%. In order to receive the maximum APY, you will need 1 FRMx per 10,000 FRM held. If you have less FRMx per 10,000 FRM, then your monthly rewards and the resulting APY would be lower;
Therefore, the more FRM you hold, the more FRMx will be needed to receive an APY of 30%. The fairness of this concept can also be illustrated with the rocket analogy: The more rockets (FRM) you want to fly, the more fuel (FRMx) needed;
The rewards increase in line with your holdings —e.g. if you increase your FRM and FRMx by three times, the resulting reward will be three times higher.

Let’s look at some specific examples of holdings and rewards based on this new dynamic model.

What Will My Monthly Rewards Be?

We are currently designing a calculator interface on the Ferrum Network website where you will be able to enter the amount of FRM and FRMx that’s held on UniFyre Wallet, and be shown how much your monthly reward will be (based on current prices) and the corresponding APY.

To illustrate what the model means in actual figures, here are some examples. Note: the corresponding rewards are based on current FRM price (ca. $0.05).

Example Reward for a 50,000 FRM Holder

0.5 FRMx: No monthly reward — minimum of 1 FRMx required;
1 FRMx: Monthly reward = $12.5 per month; APY of 6% ($150 yearly)
5 FRMx: Monthly reward = $62.5 per month; APY of 30% ($750 yearly)
10 FRMx: Reward would be the same as with 5 FRMx. To earn more rewards, must hold more FRM.

Example Rewards for 100,000 FRM holder

1 FRMx: Monthly reward = $12.5 per month; APY of 3% ($150 yearly)
5 FRMx: Monthly reward = $62.5 per month; APY of 15% ($750 yearly)
10 FRMx: Monthly reward = $125 per month; APY of 30% ($1,500 yearly)

Example Rewards for 500,000 FRM Holder

1 FRMx: Monthly reward = $12.5; APY of 0,6% ($150 yearly)
5 FRMx: Monthly reward = $62.5; APY of 3% ($750 yearly)
25 FRMx: Monthly reward = $312.5; APY of 15% ($3,750 yearly)
50 FRMx: Monthly reward = $625; APY of 30% ($7,500 yearly)

Community Drop Impact on Rewards

With the upcoming Community Drop, you will receive 1 FRMx per 100,000 FRM held. This already leads to an APY of ca. 3% for everyone who qualifies for the Community FRMx Drop — only condition is that you must hold the FRM on your UniFyre Wallet. Naturally, those holding more FRM will receive more FRMx from the Community Drop, and therefore more monthly rewards (assuming the FRM/FRMx are held in UniFyre).

Important Additional Information

Rewards increase as the price of FRM increases. For example, if FRM’s value moves to $0.20 per FRM, the rewards written above would be 4 times higher. This means the interests of the entire community are aligned;
The HOLDER benefits (described in this article) are different from the STAKING benefits (yet to be announced). By staking FRM, it is time locked for a predefined period of time, meaning you cannot move it or sell it. By holding FRM, there are no such restrictions. Hence the APYs for the holder benefits are lower than what they will be for staking.
There are multiple ways to get FRMx. One way is purchasing it on Uniswap. The other way is to stake FRM to earn FRMx, which we will be launching soon.
Please keep in mind that this article only refers to the utility of the monthly rewards. There are 6 additional utilities for FRM and 6 additional utilities for FRMx.

What’s Next: Community Drop Snapshot

The snapshot for the Community Drop to determine the amount of FRMx that each member will receive will be taken this Sunday, 25 October on 9pm EST. You must hold a minimum 50,000 FRM to receive any part of the Community Drop.

Following the Community Drop, there will be another snapshot in early November to see who qualifies for the monthly holder rewards.

In addition, the Committee is already working on the FRM/FRMx staking reward structure, which we think you will love.

Thank You

We want to give a special thanks to the Committee for developing this innovative and dynamic benefits system. We also want to thank the wider community for their feedback and input, which helped us shape this new fairer rewards system. Let’s keep it rolling!

Very truly yours,

-The Ferrum Network Team