Fluid Finance Reddit AMA
We recently hosted a Fluid Finance Reddit AMA, where users asked some great questions about Fluid’s business strategy, security, and technology. We’ve collated some of the most interesting questions and answers compiled from the Fluid Finance Reddit session in this article.
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Reddit user Odysseus_Lannister asks: Do you have verifiable audited proof that each DUSD is 1:1 backed with a USD? If so, does this report come with a proof of reserves/liabilities?
Most stablecoins are “backed” by cash and investments, or they have some algorithmic model. DUSD is different: it is a digital representation of what is in the user’s account.
We expose our treasury end-point, so anyone can check it. There is sometimes a small delay, caused by settlement from credit cards on the side of our traditional finance payments partner.
We integrate traditional finance and decentralized finance, so not all is on-chain. But, that is the point: we want to bring mass adoption to crypto. So, with our DUSD, you can spend it in the real world as you’d spend traditional currency.
Some stablecoins invest in many different assets (cash, commercial paper, treasuries, etc) but we don’t do this. We just provide a bank statement, basically, as a testimonial of what exists on-chain.
The transaction IDs are from the bank statement, produced by our regulated bank partners, in real time. If we took user funds and invested them in various different assets, we’d get an audit. For the cash part, the auditors would go get a bank statement.
Full answer here.
Reddit user Maxx3141 asks: While crypto transactions are irreversible, almost all traditional payments can be canceled afterwards. How can you ensure a fast process for users while protecting yourself from money laundering on your service?
We integrate crypto and traditional finance. On the traditional finance side, we do (of course) get scammers who try to cancel transactions. We allow people to access crypto via bank transfers and card top ups. To cancel (or revert, challenge) a bank transfer is difficult. You have to go to your local bank and ask for your money back. This bank contacts our banking partner, and says the sender wants their money back for some reason. Mostly it is because they didn’t get something from Fluid. We just provide the transaction receipt (like the hash) and say, well, they did indeed receive it. Usually, we don’t hear from the person again.
Cards are trickier and card scammers are a full time job for some people. Mostly, it is about stolen cards. We put in place software to combat these issues and our card fraud attempts dropped to almost zero.
Money laundering is controlled by our KYT (Know Your Transaction) software, via ComplyAdvantage and Merkle Science. We work with our bank partners to identify money laundering and so far have had none reported.
Full answer here.
Reddit user TipToeTurrency asks: What’s a ring fenced treasury account?
A normal account customer would deposit funds with the bank. These deposits become the assets of the bank. This is their liability toward you. In most countries, these bank deposits are covered by bank insurance to a certain level.
Some funds are deposited with the bank as client safeguarded funds. This means that the funds cannot be used by the bank. They remain your assets and the bank cannot touch them. They are ring-fenced in the case of any issues, like bankruptcy of the ban. Fluid’s funds (i.e DUSD deposits) are deposited with our banking partners as client safeguarded funds. There is no limit on the amount of funds that are ring-fenced in this manner.
Full answer here.
Several Reddit users ask: What insurance is there on accounts?
Funds that are held with Fluid rely on insurance from our partners, deposited with our banking partners as client safeguarded funds. These funds cannot be used by these partners. They remain your assets. . They are ring-fenced in the case of any issues, like bankruptcy of the bank. Traditional banks don’t like these client safeguarded funds very much, as they cannot use them.
Fluid’s funds (client funds) are deposited with our banking partners as client safeguarded funds. There is no limit on the amount of funds that are ring-fenced in this manner. So, better than most banks, we think.
There is no on-chain insurance. If you lose your DUSD on-chain it is probably lost.
Several Reddit users ask: Any plans to support chains other than Ethereum?
We are currently deployed on Arbitrum and we’re working on deploying on Ethereum Mainnet. We have plans to expand on other EVM chains (since these don’t need a big additional code change). Deployment on non-EVM chains is planned.
Reddit user R7950 asks: The low float of $FLUID tokens makes it hard to buy the token for higher tier levels without huge price impact. Are there plans to increase $FLUID liquidity in the pool?
The amount of FLUID tokens needed to achieve specific levels is dynamic: it depends on current price. For example, in the future, if the price is more than $1, you would then need to hold half of the amount of FLUID that is currently asked for.
Full answer here.
Reddit user Sinsulancha asks: If you’re a Swiss company, why did you name your stablecoin DUSD?
A better name for it is digital cash. We basically put real money on-chain.
DUSD is a digital representation of USD in a bank account (or Fluid Account) with us.
So, digital USD = DUSD, digital euros = DEUR, digital yuan = DCNY.
While we’re a Swiss based company, our users are global: dollars are the world’s dominant reserve currency, and we wanted our main digital cash to be as widely appealing as possible.
Full answer here.
Reddit user DBRiMatt asks: As yield is generated from transactions, are there any reasons why you take the stake and yield approach versus a cashback reward approach?
Because Fluid is not just built either in the traditional finance world or the crypto world, we could theoretically do both. Yield on cards is generated through transactions, and so we have been discussing a cashback model in the future.
The stablecoin APY happens on-chain, but involves no staking. We don’t want our users to lock up their funds. Using our Balancer savings product, users can deposit either DUSD or DAI and then earn the yields that the pool generates. Users can also withdraw part of, or all their funds, or add more, whenever they’d like. Fluid is just the facilitator to make it easy for our users to get some of the APY that the pool generates on Balancer.
Full answer here.
Reddit user DBRiMatt asks: How long do you expect to be offering 6–14% on the Balancer Savings Product?
The APY is based on our DUSD/DAI stable pool. The yield is dependent on the volume and depth of the pool of course. All of Fluid’s on-chain operations (such as mint, redeem, swap, and our arbitrage product) touch the volume of this pool one way or another.
The more users interact with the Fluid world and its products, the higher the APY. This rate is not guaranteed nor promised. It is the average APY the users of the Beta version received in the last few months.
Full answer here.
Reddit user Jwinterm asks: Why are you based in Switzerland?
We think that Switzerland is the best place to have a crypto company that is integrated into traditional finance. Switzerland has had clear crypto regulations in place from the regulator, FINMA, since 2018. Unlike some other countries, there are good guidelines on how to operate.
We are in Geneva. Yes, Switzerland is where the Ethereum Foundation is based. One of the best things about Switzerland is that crypto is well accepted here. You can pay taxes in Bitcoin in some cities/cantons and the local Thai restaurant by our office takes payment in a number of cryptocurrencies.
Full answer here.
Reddit user 4ucklehead asks: Do you comply with United States KYC laws for US customers?
We do KYC for everyone, including anyone from the US and we conform to US standards. Our bank accounts are only open for EEA and UK citizens. We offer Fluid Accounts for US customers, and we’re planning on completing our integration with our US partner to offer FDIC insured bank accounts in all 50 states this year.
The yields come from fees on our Dai — DUSD pool on Balancer, on Arbitrum. These are real fees that involve going on/off chain. Not yield in tokens.
Full answer here.
Reddit user Jwinterm asks: Are you really paying out 10+% yield? Have you had a lot more people expressing skepticism since the summer of last year?
Celsius seems to have paid yield based on lending out tokens. We don’t do that. Our yields are much healthier: based on real fees that people pay. We also generate substantial yields from capturing currency differences from integrating the traditional and crypto worlds. You can see our fees and yields transparently on-chain. Unlike Celsius.
People are correctly skeptical of crazy high yields, especially if paid in native tokens or derived from risky lending activities. The problem with yields from lending is that you take credit risk against the counterparty. Fluid doesn’t take counterparty lending risk.
Full answer here.
Reddit user PathologicalUpvoter asks: Can you explain in very simple terms how I use your service?
Go to app.fluid.ch: click ‘Don’t have an account? Sign up’
Type in an email address and password.
You’ll be sent an activation email, confirm this.
Log in at app.fluid.ch
Hit Top Up and top up your account with bank transfer or card payment.
Optional: link your Web3 wallet to the app.
Treat it like any other banking app, but with the ability to go directly from your account to your Web3 wallet.
Full answer here.
Reddit user ThatOtherGuy254 asks: Do customers retain ownership of their cryptocurrency when they are using your services?
We allow users to mint directly to their Web3 wallet, so your crypto is totally in your control, you don’t need to use an exchange to go in and out of crypto. Our Balancer Savings product is on a chain on Balancer, so it’s in a smart contract.
Full answer here.
Reddit user Izzeheh asks: What are your fees?
We charge 0.5% to mint directly on-chain to your web3 wallet, to redeem we charge 1% to redeem DUSD back to your Fluid Account or Traditional Account.
From that you can use our Fluid Swap which we charge 0.5% to swap DUSD for any token on Arbitrum. From here the world of crypto and DeFi is your oyster!
We’re also about to launch our tiers and benefits, so the more FLUID tokens you own… the lower the fees for all our products! Including mint and redeem.
Full answer here.
📆 Be part of the Future:
Download the mobile app! Available on iOS and Android!
- Follow our Twitter
- Check out our website: fluid.ch
- Sign up for an account at: app.fluid.ch (<15 min)
- Join our Telegram community & the Announcement Channel
- Or our Discord community
- Inspect our GitLab
- Watch our YouTube
- Read more about digital dollars (DUSD)
We’re constantly looking for talented developers and other professionals to join our team. Many in the core team started as investors and community members. We’re also pursuing partnerships across the ecosystem, mainly to grow the adoption of DUSD, and Fluid accounts.
Don’t trust, verify:
Digital dollars (DUSD) — fully backed 1:1, transparent on-chain 24/7, and of course, based in Switzerland.
