Flamingo Finance Absorbs Lyrebird Finance

Flamingos,

We come to you today to announce that Flamingo Finance has officially absorbed Lyrebird Finance.

A statement from the Lyrebird Team:

In light of recent market events and the continued negative sentiment toward algorithmic stablecoins, Lyrebird has decided that the best course of action is to shift to an over-collateralized stablecoin model pioneered by DAI. The original plan to purchase fractional reserves through seigniorage is no longer feasible due to the low liquidity of LRB.

Going forward, Lyrebird will develop this stablecoin — named FUSD — as part of Flamingo. This will give FUSD the resources and liquidity required for fast adoption. We are confident that we can bring a high-quality product to market based on the experience of both teams.

Both Lyrebird and Flamingo are committed to ensuring that LRB and USDL holders will benefit from the adoption of FUSD, and that this mechanism is as transparent as possible. We look forward to bringing you an ever-improving DeFi experience on Neo N3.

What does this mean?

The Lyrebird team isn’t going anywhere. Moving forward, Flamingo and Lyrebird will work on a joint venture that will end up as a “talent acquisition” of the Lyrebird team. Thus, the Lyrebird team is now part of the Flamingo team and will help Flamingo with a new Flamingo stablecoin venture: FUSD.

What happens to Lyrebird tokens LRB and USDL?

LRB

Firstly, LRB holders can always trade LRB for FLM if they would like to exit.

That said, the FLM-LRB reverse pool will stay open and continue to reward yield to liquidity providers in LRB.

LRB token holders will also be entitled to a percentage of FUSD interest over a two-year period.

The lyrebird.finance website will remain open and active and will include a dashboard for a new LRB fund.

After two years, LRB holders will be able to swap LRB tokens for their share of an LRB token holders fund. This makes LRB a purely speculative asset. LRB holders can always trade LRB for FLM as an exit option if they do not want to speculate on the value of the LRB Fund in two years.

Users don’t actually “invest” in the LRB fund. However, users can indirectly “invest” in it by holding LRB if they speculate that the fund value will be greater than the current LRB market cap. Otherwise, the LRB fund just accumulates FUSD until the ratio for redemption is set. LRB will remain trade-able on Flamingo until the deadline of the LRB holder fund. See more details below.

USDL

USDL holders will eventually need to swap USDL to LRB.

1. LRB -> USDL will be disabled on Lyrebird.

2. Flamingo will close the FLM-USDL pool for trading and will only allow LP withdrawal.

3. USDL -> LRB trades (at the ratio 1/[LRB price]) will stay enabled until the LRB fund ratio is set, two years after FUSD launch.

4. Once the redemption ratio is set, USDL can no longer be swapped for LRB (since otherwise, the funds will no longer match the redeemable quantity).

FUSD: A New Flamingo Stablecoin

With the help of the Lyrebird team, Flamingo will launch a new stablecoin: FUSD.

1 FUSD = 1 USD

How will FUSD work?

1. Users can lock up FLUND tokens to mint 35% of its USD value to FUSD.

2. Users can use the FUSD as a loan in any way they wish to use it.

3. The user pays a 6% interest annually on the minted FUSD either in the form of FUSD or the debt is taken from the collateral and sold to FUSD (if it’s taken from collateral (liquidation) it requires an extra fee).

4. Interest is applied at every block.

• 2.5% will stay as an FUSD security fund to take liquidation deals in extreme market situations.
• 2.5% will be given to the FLUND.
• 1% will be given to the LRB holders fund.

5. If the user’s collateral is worth less than 40% of the minted FUSD, some of the position is open for liquidation.

6. If a loan is liquidated, the FLUND token is available for purchase at a discount of 5% so the liquidator can make a profit on their service.

7. The liquidator buys the FLUND token with FUSD.

• 2% of the liquidated sum (paid in FUSD from the liquidator) is sent to the security fund.
• 2% of the liquidated sum (paid in FUSD from the liquidator) is sent to the FLUND.
• 1% of the liquidated sum (paid in FUSD from the liquidator) is sent to the LRB holder's fund.

8. If the user’s FLUND tokens go up in value, the user is able to mint more FUSD as long as it’s within the collateral ratio.

9. FUSD will be used as a stablecoin versus all pools on Flamingo and hopefully in the future on centralized exchanges.

Closing Remarks

We know algorithmic stablecoins are looked at unfavorably by investors right now in these trying times for crypto. Both Lyrebird and Flamingo deeply care for their investors and for the ecosystem. This is a product that would never have come to life if it was not for Flamingo’s experience with Lyrebird.

Flamingo and Lyrebird together chose to execute this in a caring way for both Lyrebird and Flamingo investors and users. Both teams are very excited about this new venture together in the name of innovation.

Flamingo Finance is an easy-to-use DeFi platform built on Neo N3. Designed with Smart Functions for everyone, from beginners to advanced cryptocurrency users. https://flamingo.finance/

To stay in touch with us and keep up to date on all things Flamingo, please join us on Discord and connect with us on Twitter.