Flamingo launches new Bonus Pools in an effort to bring FUSD into parity with US $1



16 February 2023 07:40, UTC


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Flamingo has launched the FUSD pool bonus program intending to bring the price of the stablecoin into parity with US $1. To incentivize users to mint FUSD instead of spot purchasing the stablecoin, the team is offering additional yield to minters that contribute FUSD paired against other assets to liquidity pools.

FUSD is an over-collateralized stablecoin backed by FLUND, bNEO, and fWBTC, and can be minted on the Lend module of Flamingo. Since its Jan. 10 launch, Neo’s native stablecoin has not been able to maintain its peg to $1, trading as high as $1.25. The Flamingo team theorizes that the reason for the price differentiation is that more people are purchasing FUSD on the market than are minting the stablecoin. As the total supply for the FUSD token is currently low, the free market pressure is increasing the token’s price to meet the demand. By incentivizing users to mint FUSD, the team hopes to balance supply and demand such that FUSD will align in value at US $1.

Source: Flamingo Finance

Previously, there was a single rate of rewards, regardless if the stablecoin owners minted or purchased their FUSD. With the launch of the new incentive structure, FUSD pools now offer “base rewards” comprising 20% of the FLM allocated for that pool. Anyone who purchases FUSD on the spot market and contributes to an LP is limited to this portion of FLM rewards. FUSD minters are eligible to share the remaining 80% of the “bonus rewards” if they contribute to LPs that offer pool bonuses. At the time of press, FUSD-based LPs offer the following base rewards:

  • FLM/FUSD: 24.98% APR
  • bNEO/FUSD: 30.4% APR
  • fWBTC/FUSD: 17.37% APR
  • fUSDT/FUSD: 12.22% APR

Bonus rewards are variable, and are viewable via the Flamingo Pool Bonus module in the Asset Actions tab of the website.

Pool Bonuses

To begin earning an increased APR, users that were already contributing their minted stablecoins to various FUSD-based LPs must migrate the LP tokens to the new smart contract that launched on Wednesday, Feb. 15. Flamingo has implemented a single-click function to make this process as seamless as possible.

Source: Flamingo FinanceLM

Once the LP tokens have migrated, users must then visit the Pool Bonus section of the Asset Actions page of the website and allocate a percentage of the LPs to earn extra APR, where the bonus APR is added on top of the base rewards. The bonus pools are limited to the four FUSD-based LPs currently available on the platform.

The Flamingo team has also released a step-by-step guide to assist users through the process.

The full announcement can be found at the link below:

Sourced from cryptonews.net.

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