Imagine a one-of-a-kind DeFi primitive that incentivizes the movement of money with zero risk and very high reward possibilities. Now, imagine those incentives to be the toggles that orchestrate the direction of user flow—and, as a second order effect, liquidity—across blockchains, with sustainability, utility and fair token/reward distribution as the ideological cornerstones. Take a step into Fluidity Money, the blockchain incentive layer, the newest iteration of money in DeFi.
Say you are on an NFT marketplace, or a decentralized exchange, and you have 1 Eth worth of purchases/swaps to perform. It is typically a single-sided transaction; you lose your principal plus whatever gas fees you incur on the network. Now, it would be far more beneficial for you to stake your asset and earn yields on it. That is, the overarching incentive for you is to keep your cryptocurrencies locked up, making it a speculator’s paradise and seriously damaging any effort to move the industry forward from a retail payments perspective.
This is where Fluidity comes in. The protocol, which has been on Solana devnet beta since February 12, has launched on the mainnet.
Fluidity is a yield-generating protocol, which rewards users not for staking or keeping assets idle, but for using them. Take stablecoin DAI for instance. Deposit 1 DAI into Fluidity, and the protocol will wrap it and return 1 fDAI. Fluidity transfers the principal to a lending protocol. The yield from there is transferred to a reward pool. Rewards—ranging from cents to millions—will randomly go out when Fluid assets are used for any kind of transaction. If you swap, transfer money, or spend your fluid-wrapped crypto on a DEX or an NFT marketplace, you are in the probability of winning.
Fluidity also rewards both senders and receivers of fluid assets, in turn incentivizing merchants to become more open to accepting crypto. In a yield-bearing fluid asset transaction, the sender receives 80 percent rewards and the receiver gets 20 percent.
“What we are building is a primitive that rewards utility,” said Shahmeer Chaudhry, the co-founder of Fluidity. “Generally, all primitives in crypto that are associated with yield strategies reward you for holding on to an asset. The longer you hold on, the greater your rewards. Fluidity, on the other hand, is incentivizing utility,” he said.
Fluidity’s Transfer Reward Function (TRF) is a novel way to distribute rewards. TRF takes the APY of the protocol, blends with other variables like the number of transfers per block and gas fees, and delivers an approximate payout vector. Spam attackers are prevented with a novel Optimistic Solution.
Utility Mining is another cool upcoming feature pioneered by the protocol—it is an extrapolation of TRF, focused on developing a fair and utility-oriented distribution system for native tokens. Utility Mining incentivizes genuine users exploring different aspects of the protocol. In simple terms, utility mining rewards users for displaying ‘intended behaviors’, gifting them with governance tokens on top of the general TRF rewards. If a DEX like Uniswap signs up for utility mining, a user who performs a specified transaction with an fUSDC pair on Uniswap could win up to three yields—Fluidity governance tokens, UNI tokens, and the usual TRF rewards.
Fluidity will be, as we described above, an incentive layer that operates at the blockchain level, orchestrating the primary user incentives that drive the secondary liquidity effects. Fluidity proudly counts itself among the next iteration of protocols with focus on gamified mechanics and zero friction, with sustainability and robustness in design. No longer do crypto users have to lock up their assets to earn rewards. It is money that grows with momentum, with zero loss, zero fees, and a chance to earn once-in-a-lifetime rewards.
For Media Enquiries, please contact:
Shahmeer Chaudhry – CEO and Co-Founder
Disclosure: This is a sponsored press release. Please do your research before buying any cryptocurrency or investing in any projects. Read the full disclosure here.