Using Flux

What is Flux?

Flux is a decentralized borrowing protocol that allows users to deposit various collateral types and mint the stablecoin fUSD.

It serves three main purposes:

• Existence of the decentralized stablecoin fUSD

• Borrowing of fUSD

• Generating yield when depositing fUSD into Flux Reservoirs

What are the differences compared to the STAB Protocol?

While Flux builds upon the foundation of the STAB Protocol, it is profoundly different:

• User-set interest rates – Borrowers have more flexibility over their borrowing costs, instead of using control theory to set interest rates.

• Enhanced redemption system – An enhanced redemption system ensures a tighter peg.

• Improved capital efficiency – More effective use of collateral and liquidity due to changes to the redemption system.

• 1:1 USD peg – fUSD is 1:1 USD-pegged, which reduces impermanent loss when providing liquidity against USD-pegged assets

• More accurate price data – Flux uses pull-based oracles instead of push-based ones.

• Flux Reservoirs – The introduction of Flux Reservoirs effectively creates highly effective, yield-bearing savings accounts for fUSD holders, separating transactors and holders.

Does Flux have governance?

Yes, Flux is fully governed by the ILIS DAO, a DAO LLC incorporated in the Marshall Islands, ensuring that protocol decisions and incentives are managed by the community.

Unlike immutable systems, the ILIS DAO can make adjustments as needed to improve efficiency and ensure long-term sustainability. In our opinion, this is not something we should fear, but rather embrace.