Providing Liquidity

Overview​

FLP consists of an index of assets used for swaps and leverage trading. It can be minted using any index asset and burnt to redeem any index asset. The price for minting and redemption is calculated based on (the total worth of assets in the index including profits and losses of open positions) / (FLP supply).

FLP Token Addresses

Note that FLP is specific to the network you mint it on, it is not directly transferrable between networks and the price.

As FLP holders provide liquidity for leverage trading, they will make a profit when leverage traders make a loss and vice versa. Past PnL data, FLP price chart and other stats can be viewed at https://perp-stats.testnet.fusionx.finance/

Buying FLP

FLP tokens can be bought using the Buy FLP page.

Any of the FLP index tokens can be used to buy FLP, a list of the index tokens can be found on the Dashboard.

Fees will be lower for tokens that the pool has less of, check the Save on Fees section to get the lowest fees.

After buying your FLP tokens will automatically be staked and you will start earning Rewards you can check your rewards on the Earn page.

Selling FLP​

FLP tokens can be sold using the Sell FLP page.

Token Pricing​

There may be a spread for some index tokens, minting FLP will be based on the lower value of the index token and redeeming FLP will be based on the higher value of the index token.

For stablecoin tokens, the spread will be from the Chainlink price of the stablecoin to 1 USD.

The price of FLP will depend on the spread of the tokens in the pool as well.

Token Weights​

The fees to mint FLP, burn FLP or perform swaps will vary based on whether the action improves the balance of assets or reduces it. For example, if the index has a large percentage of MNT and a small percentage of USDC, actions which further increase the amount of MNT the index has will have a high fee while actions which reduce the amount of MNT the index has will have a low fee.

The token weights can be seen on the Dashboard.

Token weights are adjusted to help hedge FLP holders based on the open positions of traders. For example, if a lot of traders are long MNT, then MNT would have a higher token weight, if a lot of traders are short, then a higher token weight will be given to stablecoins.

If token prices are increasing, then the price of FLP will increase as well, even if there is a larger number of open long positions on the platform. The portion reserved for long positions can be treated as stable in terms of its USD value since if prices increase the profits from that portion will be used to pay traders, and if prices decrease, the losses of traders will keep the USD value of the reserve portion the same.

If a lot of traders are short and larger weights are given to stablecoins, then FLP holders would have a synthetic exposure to the tokens being shorted.

Risks​

Caution should be exercised when interacting with any smart contract or blockchain application. While risks are attempted to be mitigated through testing, audits and bug bounties, there is always a risk of vulnerabilities in smart contract code.

For details of contract operation please see Contracts.

A non-exhaustive list of risks:

  • Smart contract risks

  • Counterparty risks: The FLP pool is the counterparty to traders, if traders make a profit that comes from the value of the FLP pool

  • Token risks: Bridged tokens may depend on the security of the bridge, pegged tokens have risks of de-pegging

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