How to mint $FREE with FRC758s - a unique way to securely bind liquidity long term in a DEX.
A few weeks ago the FREEMOON faucet launched farming and minting of $FREE. As of yet this hasn't been properly explained. It's actually something completely unique and perhaps an absolutely neccessary tool for a DEX that desires to build liquidity long term.
The launch of DeFi across various EVM-compatible blockchains has seen some absolutely mad opportunities for liquidity providers who are ready to place tokens into contracts where other can trade, lend or in some other way utilize their tokens. Commonly the contracts will be an LP contract consisting of 50% in value of two types of tokens. DEXes and other protocols have been competing against one another with extremely good offers to those willing to provide liquidity. The offers generally stretch expectations to the extremes, making users wonder if it can really be true. Amazingly it usually is. However - the offers can't always be sustained long term and as they become less attractive liquidity providers will flee to the next DEX that is giving even better offers.
But what if there was a way to limit the offers only to liquidity which is truly long term in a decentralized and secure way?
For Fusion FRC758 LP-tokens that are used by the Chainge DEX this actually possible, even though the possibility has as of yet not been used.
The FREEMOON faucet recognized this and decided to showcase it in a very real way by adding a possibility to mint $FREE with Chainge DEX $FSN, $FREE and $FMN based LP-tokens since it's in the interest of the FREEMOON faucet to build great liquidity for all three of these tokens on Fusion
To utilize this opportunity you need to first learn how to switch a Chainge wallet into expert mode and add it to Metamask, connect to freemoonfaucet.xyz and subscribe in the "FREEMOON faucet" tab (costs 1 $FSN).
After that click on the "earn" tab and find the below screen.
Is where you find the possibility to mint $FREE with Chainge LP tokens. IF you have $FSN, $FREE or $FMN in liquidity on Chainge, you should be able to use this as long as you connect with the same wallet where you have the liquidity. Currently the offer is to lock liquidity for about a year (until 2022-10-17), but we'll add more dates eventually. Around 2022-02-17 we will add a possibility to lock until 2023-02-17 and around 2022-06-17 we will add a possibility to lock until 2023-06-17. As the new dates are added they will become the new "long term" and the olders dates gets pushed back to "mid term" and "short term". For now there is only "long term".
In addition to "minting" we also have "farming", which is the same thing that exists in DeFi all over the place. Here you can add and remove to the farm whenever you want and farm your yield whenever you want. This flexibility is much better for the liquidity provider, but much worse for the DEX and to reflect this the $FREE rewards in the farms are only half of what you get in the mint, creating a good balance in the choice between trying to get some yield short term and locking in liquidity for the long term.
This is an example of an FRC758 LP-token. These are all bound to Chainge DEX and the coming FREEMOON salvage DEX. For AnySwap LP-tokens only farming is offered, because they are not FRC758 and thus not possible to use in minting.
In addition to LP-tokens we also give users a possibility to lock in $FMN and $CHNG long term, which can be a great alternative for long-term hodlers who know they want to keep these tokens for over a year. If so, they can get some extra $FREE for deciding to lock them in. In the "farm" we also offer a way to stake $ANY, again showcasing the difference between farming/staking and minting/locking in.
This field shows your balance of the LP-token. It can sometimes be a bit tough to wrap your head around what LP-balances actually mean and the easiest way to currently see the tokens your LP tokens contain is to view your LP-pool in Chainge.
"Your position" is tokens you have already used to mint with, once you have minted there is no way to remove the tokens again. You need to wait until the "term end" which is when your LP tokens become full again.
When you're ready to mint, press the "lock". This will bring up a scale where you can select the amount of tokens you wish to use to mint with. Once you commit you will need to sign two times. The first signature is for approving the contract and the second one is for actually locking in the tokens. What happens in practise once you do this is very similar to Fusion time slicing. The time part of your token from now until 2022-10-17, is submited to the minting contract, and in exchange you get the promised $FREE. The rest of the token from 2022-10-17 until infinity will still remain in your very own wallet, never leaving it and since it's a time frame and not a time-slice it will automatically return to its original state once we get to 2022-10-17 so there is no need to "send back to assets" as is needed for infinity time slices. This is one of the great advantages of time frames. Eventually there might be a wallet built where you could move these time frames to whervever you want, but currently no wallet supports FRC758 LPs in such a way, so be sure you're ready to keep the tokens in the wallet of your choice for as long as a year before deciding to mint.
Perhaps the most important field in your decision making is the FREE/Token field. This shows how many $FREE you will get if you are using 1 token to mint. In the example showed it might seem quite a lot that a single FSN/FMN token will give you as much as over 100 000 $FREE, but this is because each FSN/FMN token is worth quite a lot. Some other LP tokens have much higher value still representing quite large value indeed such that probably no one has a full one, while others represent only small amounts. It all depends on how the LP pair was originally created and what liquidity was added at that time. For clarity you should compare with actual tokens that your LP tokens represent. But as a general guide we can reveal that we've tried to give the following APRs when the minting rewards was first set.
60% APR - $FMN and FSN/FMN.
30% APR - FMN/FREE, FMN/CHNG, FREE/FSN, FSN/FUSE (farm), $FMN (farm).
20% APR - FREE/CHNG, FSN/BTC, FSN/ETH.
15% APR - FREE/BTC, FSN/BNB, FSN/MATIC, FSN/TRX, FSN/HT, FSN/FTM, FSN/ELA, FSN/USDC, FSN/BUSD, FMN/USDT, FMN/BTC, FMN/ETH, FSN/FREE (farm), FSN/ANY (farm).
10% APR - FSN/FIL, FSN/OKT, FSN/PQC, FSN/AVAX, FSN/LINK, FREE/ETH, FREE/BNB, FREE/USDT, FREE/USDC, FREE/BUSD, USDT/USDC, USDT/BUSD, BTC/ETH, $CHNG, FSN/BTC (farm), FSN/ETH (farm), FSN/DAI (farm), FSN/LTC (farm).
5% APR - Other $FSN and $FREE Chainge LP pairs and FSN/LINK (farm) + FSN/RIO (farm)
2,5% APR - $ANY (farm) and other Anyswap LP (farm)
A very interesting aspect here is that when you mint, you get the $FREE paid out immediately, which means you could effectively add it to some other LP in order to claim even more $FREE rewards. The drawback is of course that your liquidity is locked long term, but for high paying pairs like FMN/FSN this is quite an offer.
This might seem quite complex, especially if you're new to liquidity provision and perhaps it will take some time for people to truly trust FRC758 time-framing for this purpose. But once proven in practise for a while, it should really be beneficial for DEXes to be able to show their liquidity providers that they can offer better deals if liquidity is locked long term instead of allowing it to be pulled whenever. And even if this is a tough sell for users, it can be a way for projects themselves to show that their liquidity isn't going to be going away any time soon, perhaps by locking liquidity even longer. How about 5 years, for example?