Announcing proposals for Q1 and Q2 2021
Let us not forget that Freeliquid is governed by the community of FL token holders — many changes to the Protocol parameters can be implemented only after a successful voting.
However, in this roadmap the developer team would like to share its vision on the major project milestones that the Protocol could achieve as a whole. Some of these changes require community voting, some not. But we believe that implementing most of them will have a profound beneficial impact on our platform and its further growth.
Anyway, let us get to the point! Below we present you the roadmap for Q1-Q2 2021 with a detailed explanation for each proposal.
Planned for Q1 2021
Governance platform launch
- Finalizing and testing the governance platform at vote.freeliquid.io
- Conducting first votes, if necessary
Current status: Platform successfully launched on January 15, 2021. First vote proposed and finished on January 18, 2021.
Setting up the voting platform has been one of our first priorities right from the start. FL, being a governance token, should be used straight away for its main purpose — voting participation. The governance platform will also enable to implement changes to the Protocol, which can be suggested in the first weeks after the launch already.
Waves Protocol integration
- Forming a mutual partnership between Waves and Freeliquid
- Listing FL and USDFL on the Waves.exchange
- FL and USDFL liquidity pairs on swop.fi
Current status: Finalizing, ETA February 2021.
Despite Waves and Neutrino Protocols have already achieved a lot in the last years, we believe that there is much more potential for their growth. We have been watching their projects closely, offering USDN support in Freeliquid Borrow from the day one. Waves blockchain offers low fees, quick transactions, and impressive solutions like DeFo or efficient token migration from Ethereum.
We thus propose to target a partnership with Waves Protocol, which will include listing Freeliquid tokens on Waves Exchange and Swop Finance (both running on Waves blockchain), among other things.
Curves Protocol integration
- Support of Curve LP tokens as collateral in Freeliquid Borrow
Current status: In progress, testing.
With more than $3B of total value locked (TVL) as of 30.01.2021, Curve Finance reigns as one of the largest players in the decentralized finance space. The protocol enables low slippages for token conversions and high APYs for liquidity providers.
Since a large share of Curve’s TVL is contained in stablecoin pools, adding a direct support for its LP tokens is a very logical step to do for Freeliquid. Curve’s liquidity providers can benefit from taking a loan on Freeliquid, while our own users might try moving their pools to Curve Finance and enjoy the high passive income it offers.
Planned for Q2 2021
Introducing Stability Fees (~2%)
- FL buybacks and burn for USDFL earned
Currently, loans in Freeliquid Borrow are not charged with any interest rate (also called “Stability Fees”). At first look, it is beneficial to borrowers — their loans do not cost anything. However, it might incentivize users to hold USDFL loans for very long periods of time, preventing the return of USDFL back and thus affecting its price.
Adding an interest rate as additional USDFL for covering the debt will partially solve this issue and will also generate a revenue stream for the Protocol. The funds received can be spent on FL buybacks and subsequent burn, which will give FL utility as an earning token.
Please note that the Stability Fees can be introduced only through voting and will be discussed with the Freeliquid community beforehand.
Introducing USDFL stabilization mechanism
- Ensuring USDFL peg at ~$1
This is an ambitious but fully doable step that will help keep the USDFL market price at $1.00. The stabilization mechanism deserves a whole article to be explained but we will give a brief description.
One of the factors that can affect the USDFL price is the fact that users might take loans against their initial liquidity pool many times, over and over again. Each time this includes converting USDFL to other stablecoins like DAI or USDC. Obviously, this creates an unusual selling pressure to USDFL, driving its price down.
This proposal will add a possibility for other users to track positions with pools that have been borrowed against many times. If the USDFL starts moving down from $1, some of these positions can be forcefully sold for USDFL, thus driving its price back up. The user that got his LP position liquidated still retains his USDFL borrowed against this loan.
The mechanism is somewhat similar to Keepers in MakerDAO with few major distinctions. It is possible to avoid almost any financial loss to users that got their LP tokens liquidated. Only market players with locked FL will be eligible to liquidate such positions. If one wants to liquidate larger positions and profit more, one has to lock FL for a longer period of time as well. This will prevent possible “liquidation attacks” and also add more utility to the FL token.
We hope that we have shed some light on the project’s closest future. Of course, the developer team has plans for Q3-Q4 as well but we would like to keep them undisclosed until the time is right. Moreover, the crypto industry is too volatile and the team does not want to give empty promises to our fellow users. Instead, we will adjust as best as we can to any state of the market.