Introducing Fringe Finance V2 Incentive Program
Fringe Finance is thrilled to unveil a compelling incentive program designed to foster the initial adoption and growth of Fringe Finance V2, the ultimate multichain lending & margin trading platform.
Starting on March 5th, the incentive program will focus on directly incentivizing lenders via rewards. The growth of capital available on the platform also indirectly incentivizes borrowers and margin traders, as it results in reduced borrowing interest rates.
The program comprises five lender TVL targets (Total Value Locked of all lender deposits). As each lender TVL target is met and sustained, rewards will be issued to participating lenders. The rules and targets are described below.
A balanced incentive model
This program aims to create a flywheel: Lenders are incentivized to participate via rewards for their lender deposits, creating a growing pool of capital with low interest rates and attracting borrowers. As the amount of capital borrowed rises, the yield on the lenders’ deposits also increases. This, coupled with the boost provided by the rewards from the incentive program, attracts more lenders, keeping the flywheel in motion. This aligns with Fringe’s goal of attracting a growing borrower base, ultimately contributing to the platform’s revenue through fees.
Program Overview
The kickstart is on 5 March 2024 and continues until the Eclipsing Fortunes milestone is achieved.
The milestone targets and rewards are as follows:
The program starts with the “Seeds of Prosperity”, where the milestone target is $250,000 lender TVL. Lender TVL refers to the sum of all lenders’ deposits in all chains on which Fringe is available (Ethereum, Arbitrum, Polygon, Optimism, and zkSync). When the target is achieved, the cooldown period starts.
The cooldown period is the consecutive number of days where the TVL stays above the milestone target. On the “Seeds of Prosperity”, the number is 15 days. If, on day 10, the TVL drops below the milestone target, the counting restarts. When the cooldown period ends for each milestone, eligible lenders will be airdropped their rewards for that milestone.
The rewards are in FRIN tokens. How rewards are calculated is described in the calculation heading below.
Lenders can help their cause
As mentioned previously, as a participating lender, you are encouraged to promote your lender deposits on Fringe V2 to borrowers and traders in your communities so they can take advantage of the attractive borrower rates. This strategy aims to increase interest rates, resulting in higher returns for your lender capital. Fringe will provide lenders with material to help you promote your lender capital. Regular updates on program status, highlighting lender TVL and Fringe’s Defillama page, will be communicated through our social media channels, further incentivizing community engagement, which lenders can support.
This, in turn, aims to attract more lenders and allow the incentive program milestone targets to be reached sooner so the milestone rewards are distributed to you sooner, resulting in higher overall yield. A win-win.
Incentive program status
Fringe will present the prevailing incentive milestone target status so users know how the milestone is progressing. This will appear front and center on the Fringe V2 Lender page.
How rewards are calculated
A participating lender receives rewards based on the proportion of interest their lender deposits earn compared to interest earned by all lenders for the period of the incentive milestone. Interest earned refers to the normal interest that a lender receives by participating in the lending market.
You may ask, “But some markets on Fringe are currently returning 0% lender APY — so how will my supplied capital earn rewards if I earn $0 interest there?” Fringe will assess your interest by adding 2% to the market’s lender APY to address this when calculating your assessed interest. This won’t affect your actual interest earned, it only increases your interest for the specific purpose of calculating your incentive rewards.
For example, if all lenders earn a total of $100 worth of assessed interest and you earn $10 of assessed interest over the period of the incentive milestone, you will be entitled to $10/$100 = 10% of the FRIN rewards for that incentive milestone period.
This interest-based calculation model means the more capital you contribute and the longer you contribute, the more rewards you will be entitled to. The more you promote your Fringe lending markets to borrowers and traders in your community, the more interest you’ll earn, increasing your rewards. The more you incentivise other lenders to participate, the faster you will receive your rewards and, thus, the higher your overall APY.
The APY you may achieve from this incentive program is based on the time taken for the milestone targets to be achieved. The faster the milestone is reached, the higher the APY from this incentive program.
How to claim rewards
At the end of each milestone cooldown period, Fringe will calculate entitlements according to the rules above and then airdrop FRIN rewards to entitled lenders.
And it does not stop there: the next milestone starts immediately after the ending of the previous one! Simply retain your lender capital on Fringe, and you are automatically eligible to earn more rewards.
Summary
Fringe is thrilled to announce its incentive program, starting in March 2024. It has several milestones, tailored to attract lender capital, with rewards for each completed milestone. The incentives system encourages a long-term commitment and a joint effort to complete each milestone, rewarding capital stickiness on the platform which promotes adoption by borrowers and traders.
Fringe Finance is committed to enhancing the lending experience and fostering a thriving borrower, trader, and lender ecosystem. Join us in revolutionizing the DeFi space with Fringe Finance V2.
Fringe Finance. DeFi for everyone.
