Formation Fi Announces SOFT LAUNCH! Part 1
First Ever Dual-Vault Cross-Chain Stable Swap Pool : BUSD <> USDT
Dear Formation Fi Community:
Firstly, we want to thank you for holding up with us through the teeths of the bear market and are extremely grateful for the enormous community support from the very beginning. As promised, The Formation Fi Team ($FORM) is here to bring you DeFi Summer 2.0. Our team will not only meet the goals set for all of us but will continue to transcend the space as well.
Prior to serving you ALPHA V1, we wanted the community to experience a glimpse of our internal work. With the Soft Launch, we have decided to roll out some ALPHA components for you to APE in, but more importantly for the industry to use as it is a practical tool we all need.
Introducing Cross-Chain Fee Balancing Stable USDT:BUSD Swap Pool.
1:1 Ratio
Simple and practical swapping from USDT (ETH) to BUSD (BSC) and vice versa with balancing fees, dynamic rewards and up to 10X cheaper transaction costs.
To make things more practical for easy use, both of the assets will be pegged to keep 1$ ratio, no matter the market conditions. This is not a traditional bridge and AMM pool, Instead we decided to use VAULTS on both sides of the chains to enable the ability to provide sweet stable APY’s + trading fees for our LP’s. These VAULTS will act as a backbone of the BUSD-USDT cross-chain swap pool.
Swap Process:
The ‘Balancing Fee’ Algorithm
We will be using our own flexible fee algorithm. When our internal market conditions are at equilibrium, which means the vault’s balances are equal, then the user only pays gas fees and the minimum swap fee. The average price of the asset transfer is about 4x to 10x lower than the price of the “traditional” swap we see on the current market.
This solution only requires paying gas fees to send transactions, so it makes a lot of sense for users swapping small amounts of tokens.
Remember trying to swap 100$ worth of an asset and you ended up paying 20% on fees?
Say no more.
On the other hand, if our vault’s ratio is offset, then our dynamic fees will adjust accordingly to incentivize one of the sides of the pool to make more moves. The entire idea is very similar to the XYK model, but here we manipulate fees instead of the asset prices.
LP Earnings
For each trade a minimum of 0.40% is paid. Liquidity providers will earn a total of 50% of the fees collected by the pool; the other 50% will be distributed to the protocol. Since fees are flexible, the maximum return will depend on transaction volume as well as the ratio between the vault-pools. Furthermore, to ensure our contributors and partners will have solid minimum stable yield, LP’s will also earn FORM tokens as well.
Liquidity Providing:
Single Sided: To keep things simplistic, User’s choose one asset (USDT or BUSD) and the respective chains (Ethereum or Binance Smart Chain) to enter the pool as LP.
Benefits:
- No need to create pairs, wrap or unwind your positions.
- From the LP perspective, if you add BUSD on the BSC Chain to the Vault, The LP token will collect fees from all cross-chain swaps between BUSD and USDT + $FORM Rewards.
- Up to 10X cheaper than any traditional DEX swap — since there are no smart contract fees.
- Balancing fees instead of manipulating price.
- 1:1 asset ratio on peg.
Note: Liquidity Providers: Must Hold at least 1,000 $FORM Tokens to add Liquidity. (Just Hold, No Payment).
Simple Cross-Chain Swaps
As new protocols emerge from different chains, we find it very crucial to have cross chain stable assets swaps without going through centralized exchanges.
Closing Remarks, Why are we launching this?
We believe that there is a practical need for stable coins cross chain swaps. As the stable yield protocols grow on many different chains in parallel, the use case for being able to swap freely one stable asset on chain to another on different chains is going to be major. We do want to use this product ourselves, and apart from pure swap coins use case — we are bringing vaults on both chains to make sure everyone in the ecosystem will be rewarded.
When is SOFT LAUNCH?
THE CODE IS AWAITING FOR FINAL AUDIT. Once Complete, Date will be announced.
Stay tuned for more info and follow us at:
Website: https://formation.fi
Telegram: https://t.me/FormationFi
Twitter: https://twitter.com/FormationFi
Medium: https://formation-fi.medium.com/
