F-Assets

Integrated Cryptocurrencies

XRP

XRP (FXRP)

Stellar

Stellar (FXLM)

Litecoin

Litecoin (FLTC)

Dogecoin

Dogecoin (FDOGE)

Mickey B Fresh on F-Assets

F-Asset System Overview

F-assets on the Flare Network serve as a trustless representation of a digital asset residing on another blockchain. One of the main use cases for the Flare Network is to bring the complex logic of smart contracts to cryptocurrencies from non-turing complete blockchains like XRP, Litecoin, and Dogecoin to start. These assets on Flare will be denoted as FXRP, FLTC, and FDOGE respectively. Through the power of the f-asset system, Flare Network will allow users of these cryptocurrencies to mint their assets as f-assets on the Flare blockchain. The benefits of creating a f-asset position include earning FLR from the f-asset rewards pool, delegating the detachable f-asset vote to the Flare Time Series Oracle, creating stablecoins from collateralized f-asset positions, and participating in DeFi derivatives products like Flare Finance. In the process of minting a f-asset, the user will have to pay an agent of the f-asset system a creation fee of 5% in the native token’s value for the agent’s service of providing and maintaining the collateral ratio of 2.5x the native asset’s value in Spark (FLR). Additionally, the minter of a f-asset will be able to swap back into the native version of the f-asset at any time for a miniscule redemption fee (i.e. FXRP –> XRP). In the chance of a f-asset position becoming undercollateralized, the f-asset system encourages other agents to come in and recollateralize a failing agent’s position via incentives. If a default were to occur on a f-asset position, the originator of the f-asset would be paid out the value of their position in FLR plus an additional amount to cover trading fees to exchange back into their previous position of say XRP. The f-asset system is a truly dynamic and trustless way to bring value from other blockchains onto Flare. Check out the following blogs to learn more about f-asset rewards, risks, and mechanisms: Closing the circle on XRP <> Flare Interoperability, Creating & Redeeming FXRP, and Flare Recap & LTC Integration.

F-Asset System | Creation of FXRP

FXRP Creation
  • Originator wants to mint 100 FXRP.
  • Originator delivers .5 FLR (.1% collateral reservation fee * 500 FLR) to the agent.
  • Originator delivers 100 XRP + 5 XRP (5% creation fee * 100 XRP) to the agent.
  • Agent delivers 1,250 FLR (2.5 collateral ratio * 100 FXRP * 5 FLR/XRP price ratio) to the collateral pool.
  • F-Asset system delivers 100 FXRP to the originator.

F-Asset System | Redemption of XRP

XRP Redemption
  • Originator wants to redeem their 100 XRP used to mint FXRP.
  • Originator delivers 100 FXRP back to the F-Asset System to be burned.
  • F-Asset System delivers 1,250 FLR back to the agents.
  • Agent delivers 100 XRP to the originator.
  • No redemption fee is paid as the rate is 0% but up for a governance vote after launch.

F-Asset System | Redemption Failure of XRP

XRP Redemption Failure
  • Originator wants to redeem their 100 XRP used to mint FXRP.
  • Originator delivers 100 FXRP to the F-Asset System.
  • Agent only delivers 50 XRP and buys a Lambo with the other 50 XRP.
  • F-Asset System pays out the originator with 252.5 FLR (50 XRP * 5 FLR/XRP price ratio * 1.01 default fee).
  • F-Asset System burns half of the agent’s remaining 997.5 FLR in collateral pool resulting in 498.75 FLR burned and 498.75 FLR delivered back to the agent.
  • If the agent had honored the system, then they would have received 1,250 FLR back on redemption of the originator’s XRP; however, the agent received 748.75 FLR value (50 XRP * 5 FLR/XRP price + 498.75 FLR), which is a 40% haircut on their original position value. This provides a major incentive for the agent to be a good actor within the F-Asset System and honor their obligations.