I am going to start off by saying that this is somewhat frankenmath just to give everyone an idea with easy to read formulas and numbers how the rewards will work in the f-asset pool. However, the possible scenarios are numerous regarding the XRP and FLR prices during the timeframe as well as the total FLR available to be issued as collateral, which will effect the issuance capacity of FXRP. These values will be dynamic when the network is live and could fluctuate wildly. With all that being said, I hope you enjoy the rest of the post and it starts to get your mind churning as to the possibilities.
F-assets are the Flare Network’s way of trustlessly issuing assets from their native chain onto the Flare blockchain using a collateral system. The minting of an f-asset onto Flare requires collateral in Spark (FLR) to be posted at 2.5x the value of the asset being minted. The collateral in FLR will be posted by an agent or a pool of agents with incentives for the agents to maintain the collateral ratios for every f-asset position. Additionally, a 5% fee will need to be paid in the asset that is being minted to provide the agents who will post the FLR collateral to be compensated for their services. Since Flare is a turing complete blockchain, it possesses the ability to compute complex mathematical equations giving it smart contract functionality. Through the implementation of the f-asset system, Flare delivers smart contracts to non-turing complete blockchains like the XRP Ledger and Litecoin blockchain. The representation of XRP and LTC on the Flare Network will be denoted as FXRP and FLTC. It is important to note that if the collateral ratio for the smart contract is maintained throughout the duration of the transaction, the f-asset can be exchanged back to its native chain at a 1:1 ratio at any time. In case of default on the collateral ratio of the f-asset, the original minter will receive a payout in FLR equal to the value of the f-asset defaulted on plus an additional amount to cover any trading fees. This mechanism provides safety to the originator that prevents them from losing value through the f-asset system.
Alright now that we have finished the prelude of what exactly the f-asset system on Flare is, we can move onto the meat of the post. It is time to look at an example that shows the value proposition of taking an asset from its native chain and minting it onto the Flare Network. For our example, we will be using XRP, since the first non-turing blockchain integration with Flare was the XRP Ledger. Assume that the user owns 100k XRP and they want to realize the benefits of Flare by minting all those XRP as FXRP. With XRP facing possible regulatory backlash from the SEC, XRP will be worth $.25 in our example on the Flare launch day, which will also be the day that our originator starts minting his FXRP. This user owns $25k worth of XRP before entering the FXRP position. As an aside, the first few months will provide the largest value proposition as the participation rate will be at its lowest point with the largest number of incentives being awarded to stimulate value flow into the network.
To mint as much XRP as our user can, they will have to pay a fee of 5k XRP (5% * 100k XRP). This fee is equivalent to $1.25k and now serves as the breakeven amount for the user. After minting FXRP, the user now has 95k FXRP that is worth $23.75k, so our user is sitting at a loss. In addition to the user’s initial loss, they also no longer have price exposure to 5% of their former XRP holdings. If the SEC case is settled favorably, our user could miss out on some serious price action for XRP to the upside. However, they still have 95k FXRP, which is redeemable at a 1:1 ratio for XRP at any time or can be traded for a stablecoin, if the user wishes to redeem that FXRP for a more stable value. The fee seems like a small price to pay for the potential benefits the Flare Network will deliver to our user for minting FXRP and providing utility within Flare.
We have established the opportunity costs for minting FXRP. However, the user has the potential for massive upside that may have them completely forget the creation fee for their position. There are possibly up to three ways to earn yield on the 95k FXRP position at once; however, for simplicity we will cover the easiest way to earn with an f-asset position. Our user will be eligible for the general f-asset rewards pool, which is currently comprised of a minimum of 12B FLR and according to Flare Limited will more than likely reach as high as 20B FLR after launch. You may be thinking there is no way that our user will be rewarded for simply minting FXRP, but they will be and more importantly you will be. As an assumption, we will say that the rate at which the FLR rewards are released from this pool will be .64% of the 20B FLR per week. This is representative of a 156-week release schedule lining up with the distribution of all pre-minted Spark (FLR). We also will assume that an average of 5% of the 100B XRP supply will be minted as FXRP throughout the duration of the position, which will be for 26 weeks.
The user now holds roughly .0019% of all minted FXRP (95k user FXRP / 5B total FXRP) as an average over the 26-week duration of their position. Additionally, 128.205M FLR (.64% * 20B FLR) are available to be received for just minting FXRP per week. Our user will receive 2.435k FLR per week (.0019% * 128.205M FLR rewards), which would result in a total of 63.333k FLR rewards earned in just 26 weeks by minting their XRP into FXRP. While we may not know the exact distribution of the f-asset rewards pools, everyone can see the potential earnings one can make especially early on just for minting an f-asset. The most exciting part is that this is only one of the many ways to participate in the Flare Network and receive its incentives. Once we start to account for the compounding yield from the delegation of FLR votes to the Flare Time Series Oracle (FTSO), a competitive marketplace created by signal providers for f-asset votes to the FTSO, staking of FLR with agents to earn the native version of f-assets, lending and borrowing through collateral debt positions, etc; we can begin to realize the enormity of what this crypto-socio-economic experiment will offer to the world.
***This post is designed as a hypothetical example for the community to digest. Additionally, this example uses static variables; we can assume the network will be anything but static. Flare will release exact details for rewards closer to launch, so we will be able to come back to this and model out more accurate scenarios.
~ Patty XRP | The DeFi Standard – 1/25/21
Hi everyone thanks for indulging my scenario. Hopefully, it can start to give you an idea of the yields Flare will have to offer. I would like to expand on this entry in the future and cover other earning scenarios like the FLR FTSO rewards.
Very interesting.
I was under the impression we had to hold flr to make fxrp, but you are saying we pay 5% fee in xrp and use flr from a pool? Can we then stake our flr in the same pool to earn xrp back?
To make 5b fxrp as in your example, the flr pool needs to be like, huge, value vise to do the 2.5x. Big chance most wont be able to convert then unless flr is worth alot more Vs xrp than today.
Hey Magnus yes you are correct. You will be able to stake FLR with agents to earn the native token of the f-asset. The pool would be huge that is why I specify this example is hypothetical just so people can understand. The FXRP white paper states the formula for the issuance cap which will grow over time as more FLR is distributed or FLR price increases. But this is why you want to start early. Let me know if that doesn’t answer all your questions and I will add more.
Thanks.
Can you elaborate on the collateral failure you mentioned? It is abit unclear what happens in this example.
Yes I would refer you to the FXRP whitepaper and Flare blogs. Essentially if the position is undercollateralized for too long, then the system will heavily punish the collateral agent. The user who minted the FXRP will be paid out in FLR so they can repurchase their XRP plus additional FLR will be awarded to cover trading costs. This scenario is pretty unlikely as other agents are heavily incentivized to come in and recollateralize the position for the failing agent though.
Hi Patty, Sure a lot to get excited about my situation is hopefully my small bags will qualify to play.
I’am a Uber driver been buying XRP for 2years was lucky enough to have ***+ in Coinbase on December 12th.
Working.full time at 70 years old needed to do something cause it’s the only retirement I have . Today found out I can’t get them to give me my spark till Flare goes online sometime 2nd quarter, what are spark iou.s? Is there something I can do now ?
Hey I had some XRP on Coinbase for the same time period and only two exchanges are offering IOUs which are futures contracts but don’t have the yield that actual FLR will possess when the network goes live in June so I’m just waiting til then. Poloniex and bitrue offer IOUs but they have different terms so make sure you know what your getting into.
Thanks for the information. Really useful. When will you be publishing article on the FLR FTSO rewards?
Hi Elaine – not sure yet but long time before launch so I will get that info out there eventually! Looking to cover some Ethereum DeFi projects this week so people can compare to flare finance products.
Is there a scenario in f-asset system for a bad actor-agent, amidst huge price jump for xrp, to profit by defaulting on txn, where his total penalty is less than his profit of keeping the xrp he should’ve delivered? Ty for your time.
Hi Shane – it’s a good question. Check out the diagram and payouts on the F-Assets page to see how defaulting on a position is a losing game for agents.
Thanks for your time on this article, I have a question around the collateral and the release of spark/FLR. Using your 100k XRP example:
100k of XRP Owned = 100k FLR received. On day one we receive 15% = 15,000 FLR
Too mint FXRP we need to be able to stake 2.5times the value in FLR.. if you only own 15,000 FLR you can only mint 6000 XRP/FRP
To be able to mint 100k FXRP you need to stake 250k FLR.
To receive 250k in FLR on day one (15%) you would need to hold a total of 1.66million FLR.
Meaning you own 1.66milon XRP
So your return of 63,333 FLR over 26 weeks would be around 4% of the total XRP holdings.
Hey Peter – the agent collateral pools will be providing the collateral and the creation fee is for their services. Basically, the issuance capacity is the only problem limiting the amount of FXRP you can mint. Additionally, you can stake your FLR with an agent and earn yield that way. Let me know if that didn’t answer everything.
Patty thanks for your valuable work. I have a doubt that I would like clarified. To mint 1 F-asset do you need to have 2.5 Flares as collateral for each asset you want to mint? Or will the guarantee be given by external agents? Thanks for everything.
You cannot post FLR collateral for your own f-asset position. Some agents will have to do that so there is an issuance cap for f-assets. It’s a dynamic formula so it could change often.
Hi, what happens to the 5% minting fee? In your example, 5k XRP – where do they go?
Thanks
Hi Rafael – the creation fee goes to the agents who are posting the FLR collateral. FLR holder will be able to stake their FLR in these collateral pool and earn a portion of that fee as well. This could be a way to earn additional XRP , LTC, or DOGE.
Awesome. Thanks.
Great vid today 😉
Two follow up questions, Patty:
1) Is the 5% creation fee a one time reward (I’m assuming yes)
2) When can we remove the collateral and use it to generate another creation fee in the future ?
Thank you !
the 5% fee its hypothetical or it the official fee to minting F-asset?
It is the official creation fee per Flare. It will move to a governance vote after launch.
5% of my precious XRP? It burns!
I know, I know – I had the same thoughts at first. One strategy I may implement is to immediately buy back the 5% creation fee at spot price, so that I do not miss out on any high price appreciation. Obviously, this would raise your breakeven cost, but the compounding rewards should still outweigh that. Also, technically its is not burned just transferred to another party.
If the rewards on 5% per year (average yield for staking), it will take a year to make that fee back.
Disregard comment above. I read the article again and understood better. It appears the rewards will be worth the fee! Hopefully, the example above is reflective of the actual returns.
I hope so as well. The participation rate is the number one factor. Each constant % move lower in participation is an exponential increase in rewards over time. The system is dynamic and I don’t have good enough technical skills to model that kind of variability yet.
what if my xrp and flr are kept in a participating wallet, how will staking work exacting? will i benefit from price appreciation as well at yeild from signal providers? im a conservative investor and prefer not too take any risk. thank you in advance.
Hi Joe – FLR comes with two detachable votes as it is programmable money. The FTSO vote is the one that earns you risk-free FLR rewards. You will also be able to stake your FLR with an agent and use you XRP to mint FXRP. You will still benefit from FLR price appreciation and the value of FXRP is always equal to XRP, so swapping XRP for FXRP allows you to earn yield and still profit from price appreciation. Let me know if you have any additional questions!
Hi Patty, Sorry if my question is silly but a complete novice. What is the value of a Flare Reward? Is it a monetary value? and is it redeemable? Thanks Dan
Hey Danny – it’s a very reasonable question but the rewards in this example will be Spark (FLR), which will have a monetary value like any other cryptocurrency. You will be able to setup so that the rewards are delivered to your wallet making them redeemable. Let me know if you have any other questions.
Many thanks Patty , much appreciated.!!!! Another question I have is about FTSO. I am struggling to understand how this works. Thinking this through with you…….the XRP price goes up and down and this effects the collateral to cover the contract. Each Spark holder somehow has information on the XRP price that is different from other spark holders and exchanges? and thats got something to do with variation over time? I’m sure I will get this at sometime, but if you can provide any clarity I would be grateful. BW Dan
Yeah so think of the signal providers as data aggregators and based on the voting power delegated to them by Spark holders help to ensure decentralized pricing like probably on around a per minute basis. Basically creates a global decentralized price feed for all the smart contracts.
Thanks Patty, slowly beginning to see the light 🙂
Haha I hear you. We all have a long way to go! It’s at least exciting and interesting to me so I don’t mind.
Hi Patty
I’ve been watching all vids on xrp, fxrp, and I’m lost!
I’ve been in this Dec/17
I’m afraid of missing out, this space moves fast
And it seems after one vid is completed it omits
the last? And usually I was the kid in school that would never raise his hand.
Thanks for your time
James
Hi James – I am not sure what you are asking? Also do you have any specific things you are not understanding?
Hi Patty.
If I have enough FLR to mint all my FXRP do I still need agents and pay that 5% fee? Or, is it better for me to pay 5% and act as a agent with all my FLR? What is required to be an agent, any special skill or what?
When you stake your FLR you get paid in what percentage and get FLR or XRP?
Hi Mario – from my understanding the 5% creation fee is required whenever minting f-assets and that you cannot serve as your own agent. I would think of the agents as a dynamic pool that will maintain collateral on your f-asset position rather than one static agent throughout the life of the position. Unfortunately, we are not sure exactly how the agents function at this point. And then we are speculating you could get paid out in FLR or any of the native f-assets (LTC, DOGE, XRP).
Thank you Patty. I have one more question..
What if I have 10 000 XRP and i want to turn it into FXRP, to get FLR as a reward, and there is not enough FLR from agents to do that? This could be crucial on the beginning when reward rates are high.
Yep this could cause an issue and the FXRP Whitepaper has a formula for the issuance cap, if you want to see how that works. Basically takes into account available collateral, FLR price, and native f-asset price. If the demand is great enough, I imagine this will push up the FLR price to accommodate this and additional FLR is released via FTSO and rewards pool to increase the issuance cap.
Thank you..
I like what is coming, can’t wait. I will read a whitepaper, again..
Congratulation on web site and YT, you guys are doing a great job. I am here to listen and learn.
Thank you very much I have a normal job so can’t do as much as I would like but glad you are finding the information useful.
Hallo Mario. I have a doubt that I would like clarified. To mint 1 F-asset do you need to have 2.5 Flares as collateral for each asset you want to mint? Or will the guarantee be given by external agents?
Thanks for everything.
Patty, ” throughout the duration of the position, which will be for 26 weeks.” Can you explain a bit more about the ’26 week position’. Is every cycle 26 weeks? Can you break out early, sell your FXRP during this position? To ‘reenroll’ will it be easy, relatively seamless? Do the stakers pay the 5% creation fee at the start of every new 26 week period? THANK YOU.
Hey Thomas – the inflation rate of FLR is set at around .8333% per month during the first six months after launch, so I chose that time frame as network inflation will be relatively static during that period. The inflation rate is up for governance vote after 6 months so it could change making it difficult to model. This is a very crude example and in theory as long as the network continues to run you can keep your position in perpetuity.
Additionally, Hugo recently shared that the 5% creation fee is an example and it will be lower when network is live. He also added they may turn it into a bidding system.
Also you can swap back to your XRP at any time for a negligible fee which I believe is paid in Spark.
There is a formula for the issuance capacity that may make minting FXRP difficult at the beginning assuming a low price for FLR and the low supply due to the distribution schedule of the airdrop.
I hope that helps you out but reply to this if you have anymore questions. Thanks.
Thanks Patty, a few more 🙂 1) What is the ‘inflation rate’ of FLR all about? 2) Any idea/educated guess what the ‘negligible fee’ might be when someone wants to convert some of their FXRP back to XRP? I understood FXRP and XRP to always be exactly equal in value 1to1…..but you say there will be some type/ cash out fee formula?
The FLR supply is not capped so for the first six months 5 billion new FLR will be minted and delivered as FTSO rewards which is up for a governance vote on the rate after that.
My guess is .1% of total redemption value paid in FLR maybe lower or non-existent possibly.
There is a formula for the issuance cap which is how many f-assets can be minted at a certain time but the redemption fee would be a flat rate like I mentioned above.
Hi Patty. You said “as long as the network continues…” and it brought up a question. What happens when the network doesn’t continue. Does the agent take all my XRP?
Yes but this is an extreme scenario. If the XRPL failed, the same would happen.
Thank you for great content Patty. What extreme scenario could make the network fail?
I mean if the code base was terrible or all the validators crashed simultaneously. Its pretty much standard stuff that other blockchains face.
Hey Patty,
Can you guys do a thread on defi/ financial terms and what they mean in the defi ecosystem? ie. collateralized debt position, governance tokens ect
Hi Matt – this is a good idea. I will look into the best way to do this and probably can compile it over a couple of weeks. Thanks.
If when the Flare network goes live , if XRP was hypothetically priced at $6-$10. at that time, the 5% creation fee could be a substantial. In your 100K example, that could be $30,000 to $50,000. A long way from the $1,250. breakeven point using XRP at .25 cents in the example used. If 60,000 FLR was the reward after 26 weeks, if FLR is priced at .25 cents that equates to $15,000. My question is does it concern you that the price spread between FLR and XRP could be so wide as to make it a financial risk? XRP could even be $100 to $1000 each somewhere in the future. I guess its impossible to
estimate what FLR could go to price wise.
Thomas, That is a great question. If the price spread is relatively low over time, then I am more comfortable, but if it widens, then we have a major financial risk/benefit decision to make. I wonder, based on the dynamics of the supply/demand of both FLR and XRP if the price spread is keep low just due to the economics. We will see…Thanks for the great question.
If demand is there to mint f-assets, then in theory the price of Spark should increase to meet that demand. Also if the f-asset prices appreciate, agents will have to meet collateral requirements by purchasing Spark from the open market and collateralizing it. This will reduce Spark supply while increasing demand resulting to increased prices for FLR. Once this has settled out the price ratios will be back in more alignment.
Hey Patty,
Since there will likely be a “shortage” of FLR to mint all the F assets in the beginning, could someone make sure all of their FLR goes to minting their own F assets so they don’t miss out on the benefits at the beginning?
Unfortunately you cannot post collateral for your own f-asset positions. I imagine this is to make sure the collateral market stays dynamic. No one entity will post all the collateral for any given f-asset position most likely.
Flare Network is supporting staking via FLR for F-Asset, but Flare Finance also support FLR staking in their FlareFarm, so which one is better? Which one provide bigger return. It looks like overlap between Flare and FlareFiannce.
The F-Asset staking is different than FlareFarm staking. And that is to be determined. Will also depend on the risk/reward profile someone possesses.
You can stake in Flare Network and also FlareFinance (FlareFarm), so which of the staking is better? Are they kind of overlapping each other and fighting for holder to stake? Anyone know which give back a higher yield?
From what I understand, you can have two types of earning systems within the Flare Network for both the FLR and FXRP tokens, as well as being able to move those same tokens to Flare Finance to earn there as well. Is that correct?
FXRP earn via f-asset rewards pool, collateralized CDPs, Flare Finance liquidity pools, and possibly earn by delegating FTSO vote to signal providers.
FLR earn via FTSO inflation rewards, collateralizing f-assets, Flare Finance products, and collateralizing CDPs.
This is the general gist of ways to earn but it sounds like you got it pretty down pat.
So can you earn in several times on multiple systems at once? Thank you for all your work.
We really appreciate you
Yes so FTSO rewards for FLR and F-Asset rewards for FXRP, FXLM, FLTC, and FDOGE can all be earned on top of using those assets in other dapps on the network.
Not sure if I get this…So if I minted my XRP in Flare Network, (after Mint Fee) my FXRP automatically generate and earn the daily reward in Flare Network? I don’t have to stake it or anything? As long as I minted an Asset? If so, then I can use my FXRP in Flare Finance and stake it to say FXRP Pool or FXRP/USD Pool? When I stake it into FlareFarm, do I still get my daily reward from Flare Network?
Yea you get rewards just for holding the f-asset. And then depending on what products you use that f-asset will determine if you still get rewards from the pool. I do not know at this point which FF products still allow you to be eligible for that rewards pool.
Reward from Staking FLR to Agent or from Governance Vote from FTSO are in F-ASSET or Native ASSET? If Native Asset, that mean I have to MINT the reward and lose 5% of that reward?
Great information, thank you! I do have a question. In your example you show the potential yield after a 26 week period. Do we have to lock it up for certain time frames for the best yield? Thank you again!
Hi April – there is no lock up period so you could mint FXRP for a day and swap back to XRP if you like. I used six months in this example since the inflation rate is stable for six months which after then becomes a governance decision. This change would make it difficult to model past then for now.
Thank you for clarifying! As Mickey says, it is a lot to unpack!
trying to to find answers to these simple questions? do we need to set up an acct. on flare network at some point similar to the exchanges we use and be able to buy and sell there? how do i get my flr off my flare address that i received from the snapshot? and when i put my xrp on the flare network does it automatically mint to fxrp and is the opposite true when i remove it?
First two are tbd until we get closer to launch. XRP must be minted as FXRP to run on flare blockchain. XRP will stay on XRPL. The FXRP is burned when you redeem your XRP on the XRPL. Hopefully that helps lemme know if you need clarification on any of that.
yes thank you. so when i transfer my xrp from my nano to flare network there will be another function to complete on the flare dashboard to convert my xrp to fxrp?
Yes
thank you for the response. so when i put my xrp from my nano onto the flare network dashboard i will have to convert my xrp [mint] to fxrp at that time
how will the DFLR drop work if all my FLR is off my flare address and[not on an exchange] working for me on the flare network? will i still be able to receive the amount i qualify for? T Y
If I have 100k XRP with an equivalent 100k in Spark and did nothing at all, my question is: As the Spark Token appreciates on the exchanges, will I still be a beneficiary just for having held my XRP at the time of the snapshot?
Yeah you will still receive the spark unless you are asking something else?
My question is about earning the 5% Agent commission.
In using the example of an originator wanting to mint 200 FXRP on the Flare Network, with the hypothetical assumption of a 10:1 Spark/XRP ratio and 2.5 times collateral ratio, that I would have to put up 5,000 FLR tokens.
Hopefully those calculations are correct.
If so, then as an agent I would earn (in the native token XRP) a reward of 5% on the 200 FXRP newly minted on the Flare Network. Which would be 10 XRP.
My understanding is that I would have to maintain that 5,000 FLR collateral, or possibly add to it, for the duration of the contract. which has an indefinite length in time.
If all this is correct, than to me it seems like a hefty commitment both in Spark tokens and length of time I need to hold the collateral. Am I missing something here ?
Please respond and expand on anything I may be misunderstanding. Thank you !
Hey Matt – we are not sure exactly how the whole agent side works to this equation yet. However, think of the f-asset system as fluid and dynamic. It is unlikely you would be putting up all the collateral on position. Additionally, agents take custody of the native assets being minted into f-assets, so no hold can be placed on that side. An agent could place the native asset they are holding in some kind of yield-bearing product to earn more over time as well. Therefore, the creation fee is just one aspect of the earnings for agents. Hopefully this helps clear up some things in the mean time. Thanks.
Thanks Patty. Yes, your explanation helps a lot.
Especially in as you say visualizing the f-asset system as dymanic and fluid. And it makes more sense that collateral would be a pool, rather then a single agent putting up all of it.
The yield bearing account is exactly what I was thinking of. I already have my XRP on Nexo earning interest, so I am planning on either putting the earned native assets there. Or if Flare offers some sort of yield bearing product, that would obviously be an option as well.
I’m glad to hear I’m not alone in being somewhat in the dark about how the agent side works. Hopefully it will become clearer soon.
For now, at least I know I can delegate my FTSO vote without risk, so I’ll start with that.
Thanks again, Patty 🙂
Patty You Are A Star
Hi Patty , I am not sure if this relates but I am trying to understand stable coins, what they are, why they are etc. I found this passage in an article about them “By utilizing stablecoins in crypto lending, lenders enjoy the high returns associated with the low operational cost of smart contracts, and borrowers can post a reasonable stablecoin collateral to get a loan with low interest rates.” My question is, if a borrower needs to borrow money how would they collateralise their loan , surely if they could collateralise they wouldn’t need to borrow? Best Dan
Its probably one way to do it in which they offer undercollateralized loans. I am not sure what this is in reference to however.
Patty, I have both XRP that I want to mint into FXRP and I also have FLR that I want to stake with an agent. From the FXRP side of things, I will have to pay the 5% creation fee. I think this is a one time fee when I mint. So from that perspective, it would make sense that I should just keep my FXRP in the Network, and not redeem (unless I want to redeem and then sell my XRP to pay for stuff, taxes). So I am an XRP hodler, then I should just mint FXRP and keep it there.
But from the side of the FLR staking, I will receive some percentage of the 5% creation fee that is given to the Agents. But once I get some of that 5%, then what do I get from there on?. Do I remove my FLR from being used as collateral?, and then re-stake it?.
Also, who has the power or control in this set up?: I know that if you mint your FXRP that you can redeem at any time, but can the person who staked their FLR just remove it at any time?, and what are the consequences?.. Thanks..
Hey so yes I am not planning on redeeming from FXRP to XRP since I am going to be earning constant yield. When staking FLR with agents to be used as collateral, you will earn your portion of the creation fee each time a new f-asset position is created I am guessing. The system is dynamic so you will be rewarded for as long as you keep your FLR as collateral there. The power is in the smart contracts. This is the counterparty. And honestly don’t have the best answer for the last question yet.
Hi Patty, thanks for all you guys’ work on this, you’re really helping out a lot of people. I must admit I’m finding it hard to get my head around but I’m just devouring as much content as I can to prepare myself as best as possible before launch. My question is this: would you say that to benefit from the various ways to earn rewards from Flare requires much skill in terms of market knowledge, analysis etc? Or, is it more a case of learning the mechanics of the various processes, and once you understand those you should be able to earn consistent rewards? I’m guessing some facets of it will be more complicated than others. Thanks again for all the insight!
Hi Patty, thanks for all you guys’ work on this, you’re really helping out a lot of people. I must admit I’m finding it hard to get my head around but I’m just devouring as much content as I can to prepare myself as best as possible before launch. My question is this: would you say that to benefit from the various ways to earn rewards from Flare requires much skill in terms of market knowledge, analysis etc? Or, is it more a case of learning the mechanics of the various processes, and once you understand those you should be able to earn consistent rewards? I’m guessing some facets of it will be more complicated than others. Thanks again for all the insight!
Hey Ed it is definitely a lot to take in but my main focus for the first six months after Flare launches is to earn via FTSO vote delegation, minting f-assets, and providing FLR as collateral. This will provide a lot of yield and shouldn’t be too difficult to manage/conduct. Now Flare Finance is definitely more complicated and risky but this will be reflected in the yield generated from their products. When we get more info on the wallets and how it all works I think much will become clear.
Great stuff man thanks again for all your work on this.
Hi Patty, thanks for all the information. Does converting XRP to FXRP require any Spark collateral, or is minting FXRP a separate interest bearing function.
In the beginning, due to small distribution of Spark, deciding between staking FXRP/FLR in LP for Yfin, or minting FXRP. But a little unclear to me how much spark would be required just to get my equivalent of native XRP, XLM, etc, on the Flare network to figure this all out. Thanks again for your help
Hey Michael – if you are the originator, you do not need spark for collateral. Parties running smart contract agents will provide the collateral and manage the position. In fact, you are not even allowed to put up your own collateral, so all you have to do is pay that creation fee in the native asset.
Hey Patty,
Thank you for your work in sharing what you know.
I have a couple of novice questions here, that I’m hoping you can clarify in the most simplest way possible.
1) When minting FXRP from my XRP will I be able to then “unmint” it later on if ever i wish to do so? (maybe the price appreciation of XRP goes to a point where I want to sell, hypothetically)
2) I did not take part in the snapshot so I am not receiving free Spark tokens. I plan on buying Spark when it is live. Will I be able to earn on the Spark token by Staking it on Flare?
3) If yes, to #2, what happens if I staked the Spark token when it was @$1/token and the price appreciates to $10 after a week? Are my yields recalculated to factor in the price appreciate of my staked Spark token?
4) A question about security. Is Flare Networks going to be safe from things like cyber attacks?
5) In this whole process, and the scenarios I have laid out, where is collateral involved?
6) What if I want my rewards/yields in fiat (to sustain a life outside of crypto like pay bills etc)? How does this work? I have heard of the FUSD. This is the stable coin, right? Will exchanges like Binance have FUSD. I guess what im asking here is what would be the mechanism/process of me collecting my rewards to be able to then pay bills using Flare Networks?
Once again, thank you Patty. I understand I have asked many questions and I’m sorry if it’s a bit too much.
Hi Stripes,
1. You actually could just sell your FXRP on the Flare Finance DEX and not worry about redeeming if you want to take advantage of price appreciation. If you wish to “unmint”, you can do this whenever through redemption.
2. You can earn additional Spark by minting f-assets and delegating your Spark detachable votes to signal providers participating in the FTSO.
3. It depends on the product.
4. It should be as safe as any other blockchain. Security audits are being performed right now which you will be able to read prior to launch.
5. Parties that run “agents” will post collateral for the minting of f-assets. You can let these parties use your Spark for collateral which you will earn yield on for doing. Also, the Aurei stablecoin project will except Spark as collateral.
6. Solutions like Trustline are working on this problem but I do not know the roadmap for fiat off ramps. However, you can trade into stablecoins or sell FLR on centralized exchanges for fiat in the future.
I hope that helped! Thanks.
Thank you so much Patty! Yes, this was of great help.
So the situation is this:
1)We count our Xrp-Xlm-etc in F- Asset on Flare.
2) We put our F-assets in collateral to receive an annuity in FLR/ F-asset/YFLR/YFIN .
3) We put our FLR in collateral to receive an annuity in + FLR/F-Asset/YFLR/YFIN .
4) We put our YFLRs, which we will receive through FLR’s airdroip in June, as collateral to receive an annuity in + FLR/F-Asset/YFLR/YFIN .
All this on FlareNetwork,FlareFinance, Data Providers(ES ftso.eu) Agents, etc..
Am I missing something? 🙂
Hey Simone you have the gist of it there. Options are going to be plentiful but the f-asset rewards pool and FTSO delegation rewards can all be earned on top of using F-Assets or FLR in other dApps.
Hi Patti, so can the same F-Asset or FLR use it at the same time to earn 2 times? (FlareFinance Liquidity Pool + Suite Sample) ?
patty will we be able to put all our xrp/xlm holdings on at once or are there daily limitations to the amt. we can mint?
Firs of all, Patty XRP, Mickey be Fresh excellent work providing valuable info for the community.. Thank you for that
Here is my concern:
What happens if there is not as many FLR to act as collateral for every F-asset that wants to be minted?
Do we all apply and proportional number of our XRP is minted (because of the short number of FLR), and next day when there is more FLR more of our XRP is minted. Or is it going to be first to come, first to serve.
Since there are greatest rewords at the beginning, I want to be in from the start..
Hey Mario – this is an important aspect. The white paper has a formula for this called the issuance cap which takes into account the FLR collateral supply, FLR price, and FLR collateral ratio in regards to the total F-Asset value being minted. If demand outpaces these factors, then agents are incentivized to purchase FLR off the open market to provide more collateral. This would reduce FLR supply on open market driving the price higher, which would raise the issuance cap over time.
Thank you Patty XRP, that sounds grate. Everything seems to be in our favor.. Can’t wait for it to go live..
Stay safe..