AMA, Part 1: April 2022.
You ask, we answer.
And sometimes, like this one, you ask so much that we have to take a break in between answers. This is only Part 1 of our latest Telegram AMA, so stay tuned to get the rest of our answers to your questions!
Questions start here
Do we have any specific marketing goals in terms of traffic to our site?
Website traffic isn’t exactly the most important variable to track. Here’s why:
Our marketing goals are tightly linked with platform performance, for which the primary metrics are:
- Total Value Locked
- $FRIN Market Capitalization (given how $FRIN works as a profit distribution mechanism)
- Generated fees
While we certainly track traffic to the website (and the more, the better), users can still interact with our contracts directly or through third parties, making traffic an incomplete factor at best.
Why is there a Facebook page if there’s nothing on there and so few followers?
We have run Facebook campaigns, which need to be tied to a page. That’s why the page exists. We do not plan to actively manage it, but this can change in the future.
As it’s rumored to be 6 partner tokens available as collateral on the platform at launch, surely holders of these tokens need some notice to get ready to use the platform. How much notice will “the market” get that the platform is launching?
Everyone will pretty much get the same notice. Once we have a set a date for the launch, we’ll increase our marketing and trigger several activities we have up our sleeves.
Are we planning on expanding the team as the platform grows?
We most definitely are. This will go hand-in-hand with platform revenue growth and the consequent increase in market capitalization.
Can we please do a follow up Spaces with Bancor? That was one of the best ones, and it really was a shame it wasn’t recorded.
Once the platform launches, it’ll make a lot of sense to host new Partner Spaces and more co-marketing activations. This hasn’t been the end of it!
Is it possible for the team to put together a list of all the articles about Fringe/BondedFinance? It could be useful for potential investors, especially to understand that this project is legit. An article showing the key takeaways from each Partner Spaces could also be useful, especially for non-native English speakers, who would have a hard time understanding what was covered live.
We have an internal repository and plan to add a list of articles discussing Fringe to our upcoming website update. Articles with key takeaways are an exciting option to explore if time permits it.
Since you mention non-native speakers, this could be a good chance to say that we care a lot about scaling our reach there. We have launched communities in Hungarian, Russian and Spanish and are in the process of bringing in someone to handle Portuguese. Other Fringe enthusiasts that would like to lead native language communities should 100% reach out to us. These communities have huge potential, and we’re definitely aiming to become more inclusive. To this end, more than increasingly sharing more content in English, we want to create as much as possible in other languages.
Was Gate informed by anyone on the team that the AscendEX hacker sent his tokens there?
We weren’t aware of this. Since we intend to remain decentralized and not get involved in third-party issues (yes, they stole some $FRIN tokens, but they were not our property or under our control), we have not been following this series of events as closely as some community members. At the time of posting this, the hacker may have already removed their tokens from the exchange. But if the tokens are still on Gate, we could inform Gate, and their policy may be to block such hackers’ accounts. Note, however, that although we could alert Gate, there is no guarantee that their internal policies will allow them to do anything.
How do we plan to deal with any exploits that may occur? Do we have any contingency plan?
The approach so far has been proactive. We’ve been focused on audits, QA, and engineering to address the unique requirements of supporting low liquidity coins (e.g., Max Borrow Limits). These are intended to address both smart contract exploits and economic exploits. Max Borrow Limits do not only prevent many economic attacks from occurring by making them unprofitable but also minimize the total loss if they do. In our latest Medium, we talked about MBL conservative factors, which allow for the PLP to go live “with training wheels” until we are sufficiently confident. If everything goes right, which we expect it will, we can reduce the conservative factors.
We also have a Treasury, which can be partly applied to address reimbursements if possible/feasible. This Treasury will be funded by platform fees, resulting in the platform being more resilient to such attacks as it grows and more fees are collected. Another thing we are doing is planning integrations with insurance products to allow users to secure their positions.
In respect of any future attack which may occur, we will need to assess that based on any such event. Therefore, it is impossible to give a more detailed exact answer.
If there is interest, have partners indicated that the 2 audits are sufficient to put their Treasury into the platform, or would they want to have “x” months of being live, for example?
We don’t have details of our partners’ preferences regarding this. I imagine it will be along a continuum where one extreme is where a project jumps all in. The other extreme is where a project starts small by depositing a small portion of its Treasury to take out loans, then progressively increases this over time as the FF platform proves itself in time.
Once you have $USB, what are you going to do with it? What guarantees someone will want it? How do you convince them it’s worth 1 dollar? What pool will exist to trade it into other stablecoins?
The value of holding a stablecoin is primarily a varying combination of the following three characteristics, depending on the holder:
- 1. It remains stable and acts as a flight to safety in times of market downturns.
- 2. It has utility. I.e., it is accepted relatively widely on other DeFi platforms or has good liquidity so that conversion costs are low.
- 3. It delivers a yield.
If the price of $USB deviates below $1, holders of the stablecoin will incur a loss in the value of their holdings, causing USB to no longer be “stable.” Just as harmful is if the price increases above $1, as new buyers of the stablecoin need to pay more than $1 for each coin despite each coin being only guaranteed to be worth $1. Such price variations, as a result, discourage adoption.
For the price of USB to remain stable, mechanisms have been put in place to ensure it does not deviate from said price. Just as happens with $DAI, the stablecoin is protected by the sheer value of the collateral backing it. Other mechanisms to protect the peg are:
If the price declines below $1:
- Each USB can, if necessary, be redeemed for $1 of the underlying collateral, which is deposited when $USB is minted.
- If the price remains below $1 for any non-negligible amount of time, the reward (interest rate) paid to USB stakers will increase to disincentivize selling, causing the price to revert to $1. This interest reward is paid by minters (borrowers) of USB, resulting in minting also becoming less attractive, incentivizing minters to reduce the supply of USB, therefore increasing the price.
If the price rises above $1:
- Anyone can mint new USB tokens by depositing exactly $1 of another stablecoin, such as $USDC or $USDT, and sell them on the market.
- This will result in the price quickly reverting to $1 anytime it deviates above $1, as arbitrageurs will be able to make a profit.
- If the price remains above $1 for any non-negligible amount of time, the reward (interest rate) paid to $USB stakers will decrease to reduce demand for $USB, causing the price to revert to $1. This interest reward is paid by minters (borrowers) of $USB, resulting in minting also becoming more attractive, incentivizing minters to increase the supply of $USB, therefore decreasing the price.
Lastly, speculators and traders will anticipate the above outcomes if the price ever does deviate from $1, allowing them to buy it at a discount if it decreases below $1 to sell later for $1, or sell it at a premium if it increases above $1 to buy back at $1 later. To ensure that this speculation occurs quickly and efficiently, we will fund market makers and AMM liquidity, making it worth speculators’ time to correct any mispricings.
Most importantly, all of the above mechanisms only work to ensure that $USB is pegged to USD $1 as long as users trust the soundness and security of the platform against any attacks or extreme market conditions.
When can I start making my FRIN tokens work for me?
The staking platform is currently in development and will be released soon after the Primary Lending Platform. Until that time, the platform will collect fees, of which we will distribute a part to $FRIN stakers once the staking platform goes Mainnet.
Will there be an updated roadmap — even if it doesn’t include dates — so the investors can at least understand what’s next to be worked on?
Is Brian part of FringeFinance permanently, given the community’s impression of how mission-critical he is?
Yep. He is working closely with Paul and the team and is enjoying it (or so he says). Once the roadmap is delivered, he “looks forward to being let out of his cage”!
What is the process for adding new tokens as collateral types? How can they apply? How seamless will it be? If there is large platform adoption and, for example, you have 100 tokens that want to be listed as collateral types within the first couple of months, realistically, how long would it take to process them all?
For a good subset of altcoins, we have largely automated the process to derive a token’s lending parameters. Obscure tokens will require us to adapt this automation somewhat. The setup of a new token then involves a number of relatively straightforward steps:
- Telling the Fringe Finance smart contract about the new collateral token (i.e., all the Params, token contract address, etc.)
- Setting up back-end config (e.g. ticker, icon, etc).
- Specifying the price feed source. For tokens that do not have price feeds, they will have to be arranged in a manner that does not threaten the platform or its collateral.
Stay tuned for Part 2!
Note: Most questions were copy-pasted, and you’re looking at their original versions. They were written by community members, not by any member of the Fringe Finance team. We only edited them when we thought they could potentially be misunderstood by readers unacquainted with the community.
About Fringe Finance
Fringe Finance is a decentralized money market designed to unlock the capital spread in crypto assets regardless of their capitalization and supported network. With a next-generation DeFi lending & borrowing ecosystem, Fringe aims to unlock the dormant capital from traditional financial markets and all-tier cryptocurrencies.