Interest-bearing FUSD (iFUSD)
“the more crowded the marketplace, the busier your customers, the more you need the Purple Cow.” — Seth Godin, Purple Cow: Transform Your Business by Being Remarkable
In a blockchain where there are more swaps than there are types of food, StakeSteak breaks the status-quo with a refreshing take on our forgotten stablecoin FUSD.
The long-term vision of StakeSteak is to help elevate the Fantom ecosystem to compete with other layer 2 blockchains.
Currently, one of the core pitfalls of Fantom is that the native stablecoin is not pegged to $1. As a direct result, FUSD is being underused despite how integral it is to the ecosystem as a whole. Read more in this article to understand the importance of FUSD peg: “Will FUSD ever hold Peg?”
Although we cannot add liquidations ourselves, we can be a protocol dedicated to bringing demand to FUSD and integrating it as a proper stablecoin.
iFUSD (interest-bearing FUSD) is our primary product that earns additional FUSD the longer you stake your FUSD. Because the fees are distributed over time, iFUSD dollar-cost-averages(DCA) into FUSD to be returned as yields.
iFUSD requires two other components for it to work: FUSD LP Pools and xSTEAK.
FUSD LP Pools are pretty self-explanatory. Provide liquidity on SpiritSwap for a pair that is supported by StakeSteak, and then stake them on stakesteak.com for STEAK rewards.
xSTEAK is a fork of xSUSHI and serves as a way to redistribute revenue generated by the protocol as additional STEAK for long-term holders.
So how does iFUSD earn more FUSD?
Fees are earned from a 0.5% deposit fee of FUSD LP into our STEAK Farms.
Once fees are collected, the LP token is redeemed for their underlying assets. Following Figure 2, the FUSD-STEAK LP token will be redeemed for FUSD and STEAK. These tokens are then sent to the iFUSD and xSTEAK contracts to be redistributed to stakers.
In this example, the fee collected is in FUSD-SPIRT LP. The LP token is then redeemed for SPIRIT and FUSD. FUSD is sent to the iFUSD contract like normal. However, the SPIRIT is sold into STEAK before being sent to the xSTEAK contract. This creates consistent buying pressure of STEAK tokens to help keep the price of STEAK stable.
iFUSD is a collective effort to dollar-cost-average into FUSD.
iFUSD holders collectively earn 400 + 300 + 1000 + 1000 = $2700 if the FUSD yielded is sold immediately.
If the FUSD is left to accrue, the iFUSD holder is essentially buying the FUSD on average at:
As a result, the iFUSD holder is earning a (1-0.54)/0.54 = 85% gain once FUSD holds peg. This is an extra 5000–2700 = $2300 in profit compared to selling FUSD immediately
Why stake FUSD for iFUSD?
Well, it depends on the audience
- For believers in FUSD’s peg, the $0.40 price is a steal. If you buy FUSD and plan on holding FUSD until peg, you might as well stake it into iFUSD to earn additional FUSD as yield
- For people who mint FUSD but don’t want to sell for less than one dollar, they can keep their FUSD in iFUSD to consistently earn yields instead of letting their funds sit idle.
- For people who sell their FUSD at lower than peg, you’re just screwing yourself.