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The tokenomics of Fusion is an advanced topic entailing time-locks, time-value, staking tickets, multiple chain presence, block rewards, halvings (around every 2 years) and three types of gas fees. It is built to be a fundamentally desirable coin with predictable scarcity that can be used as payment without losing anything and yet offer a high interest rate, for all time. Sounds impossible, right? Possibly. The last part is only possible if Fusion becomes a highly used network. But so far, it’s off to a promising start.

Initial Supply

FSN, the native coin of Fusion was initially issued on Ethereum in 2018 with a fixed supply of 57 344 000 FSN. Fusion mainnet was launched on June 30, 2019 with an initial supply mirroring these 57 344 000 FSN. In this section of FSNEX you can view how many of these still remain on Ethereum and Fusion's mainnet and other interesting supply data. As the original FSN on Ethereum is burnt it is awarded mainnet FSN at a 1:1 ratio.


Block Reward Growth and Burns

Since the mainnet launch, circulating supply is growing at a rate of 2.5 FSN every block (around 13,2 s), which is awarded to the signer node every block. It has also decreased through a 519 119 FSN burn on block 957394. And at block height 4915200 a halving occured where block rewards went from 2.5 FSN to 1.25 FSN. Halvings such as this will occur every 4915200 blocks, making the block reward growth smaller and smaller with time, in a manner where the supply of FSN will never be greater than 81 920 000 FSN. In about 40 years we’ll be pretty close to this amount. Worth noting here is that it is supply growth that is diminishing and not necessarily block rewards, as these also have a gas element to them. Current supply can be seen on FSNEX .

Ticketed Staking, Time-locks and Time Value

In order to run a node and partake in staking, 5000 time-sliced FSN (spanning at least 30 days into the future) is needed to buy a ticket for a chance for your node to sign the block and get the block reward. The ticket purchasing is generally handled automatically, and the result is a relatively smooth ROI over time from the block rewards. Each node can run multiple tickets. On Fusion Mining you can view the current total of tickets being bought and the current number of validator nodes that buy the tickets as well as all kinds of detailed data for each of them. The number of staking tickets being bought have a direct relation to  the "active supply of FSN" since  every ticket effectively locks out 5000 FSN  from "active supply" at least 30 days into the future.

Fusion differs from most staking networks in that it offers a possibility for secure delegated staking by use of Fusion’s time-locks. This makes it easier to create secure pools that benefit those who don’t want to run a node but still wish to benefit from the staking rewards without putting their tokens at risk. Current such pools are listed here.

The time-lock feature enables a holder to slice their FSN in 2 time-slices. One half will be from present time, to a time of their choosing and the other half from the time of their choosing until infinity. This way they can send a time-slice to a pool which lasts from present time and the following 6 months (for example). The pool uses the slice to stake FSN and sends the agreed upon yield to the time slice lender. Meanwhile the lender still has the infinity end of the token still in their wallet and is guaranteed the original FSN they had at the time they chose, no matter what happens.

Making the extraction of interest through time in the process of staking as simple as possible, as described above, is important, because it has the potential to unlock the idea of time value. If it’s not simple to unlock value TL FSN, then this limits how useful it is as payment, and if TL FSN can be used as a currency, then there is little reason to sell FSN. Instead you can share its time value over and over again, in order to use it.

It’s also important that a relatively solid interest rate can be maintained through time despite the halvings. And this is where gas comes in, because Fusion is one of the busiest blockchains. There are three types of gas fees. 1. The regular one, which can be compared with Ethereum (but of course much, much cheaper at the moment). 2. An extra fee of 0.001 FSN for quantum swaps and TL transactions. 3. An extra fee of 0.1 FSN for USAN generation.

Since Fusion is a platform with major interoperability ambitions, the goal is not just to have lots transactions and swaps with FSN, but also transactions for pretty much all cryptocurrencies and crypto assets. There’s really no telling how big the demand may eventually be. More in depth analysis of halvings and predictable time value is found in the gas section. So perhaps the case of predictable scarcity that can be used as payment without losing anything and yet offer a high interest rate for all time is possible after all? Today we still can't know this. Only in 2-4 years when a few more halvings have already happened, can we know better how well the concept ages.

Cross-chain routing

The fact that Fusion has recently been placed at the center of Chainge Finance cross-chain aggregation, means that any form of cross.chain swaps performed through the aggregator must flow through Fusion and uses FSN as gas. This has effectively made Fusion a router for enormous amounts of cross-chain activity. Chainge also brings a great amount of TVL to Fusion, as many assets aren't just routed through Fusion, but also stay to get involved in DeFi. Comparing a networks TVL with their current market cap is a common way to try to evaluate future potential. In the metric Fusion will usually excel way beyond any other networks.

A Mainnet coin

An important point seldom made for FSN, is that it's a coin and not a token. Why is that important? It's important because the dynamics are secured by a great number of validators whereas a token's supply might well be governed by a centralized party who changes the rules at their pleasure. To change the dynamics of Fusion all the validators need to be in agreement. Fusion's history actually has a case of this happening, where a vote was held in the aftermath of the swap wallet theft. It also means you need FSN as gas in order execute actions on the Fusion blockchain. In uses of FSN you can read more about what makes it special.

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