New FIP out! Read on to learn about proposed changes to

sFTM and fUSD.

Addressing:
- liquidations
- how to repay outstanding debt
- LTVs and minting limits

We welcome everyone to leave comments on Github.

https://github.com/Fantom-foundation/Fantom-FMint/blob/fusd-v2/docs/fip-001.md

Liquidations

- Positions that are not overcollateralized by 300% will be liquidated when liquidations go live.

- There will be plenty of time to repay the debt.

How to repay

Due to low fUSD liquidity, the Foundation will create a fUSD:USDC swap to allow users to purchase fUSD and repay their positions to avoid liquidations.

Repaying the fUSD debt will allow users to unlock their sFTM and avoid losing their rewards and delegation.

sFTM

- Global cap of 150m sFTM
- Validators are not eligible to mint sFTM
- FTM LTV of 90% to mint sFTM
- sFTM will be transferable
- sFTM/wFTM market will be created and incentivized
- dynamic interest rate based on borrow vs supply

fUSD

- Global cap of 50m fUSD
- fUSD/USD markets will be created and incentivized
- Dynamic interest rate based on borrow vs supply
- fUSD can be staked in the protocol to earn fees. At 90% utilization this results 11.30% APY

As a reminder, fUSD is NOT an algorithmic stablecoin. It's overcollateralized, similar to DAI.

Collateral

fUSD will be mintable using the following tokens as collateral:

USDC, fUSDT, DAI, sFTMX, wFTM, sFTM, BOO, BEETS, SPIRIT, LQDR.

Less volatile assets will have higher collateral factor and cap, more volatile assets wil have lower collateral factor and cap.

Closing thoughts

The current proposal isn't set in stone and we encourage technical engagement on Github.

fUSD isn't an algo stable.

Users will have time to repay their outstanding debt.

https://twitter.com/FantomFDN/status/1527641034884366337?s=20&t=SFRxASSNu6Fv5gMbbyz1FA

why 50m fusd cap?