Earning with Flux
How can I earn with Flux?
The first category of earner with Flux would do so by borrowing. A user can leverage their collateral—Borrow fUSD and sell to gain more exposure to your chosen collateral.
The second category of earner, profits from borrower's interest payments. To profit from these payments, a user can:
Deposit into a Flux Reservoir—A huge chunk of fUSD interest payments is divided over Flux Reservoirs, which are of crucial importance to the health of the protocol.
Provide fUSD DEX Liquidity—Another part of the interest payments are distributed over fUSD liquidity providers on DEXes.
Buying ILIS—A small part of the interest earned is used to buy back and burn ILIS. Hold ILIS to win here!
The exact distribution of fUSD interest payments is as follows:
Flux Reservoirs: 65%
Liquidity Incentivization: 20%
ILIS buybacks: 15%
Flux Reservoirs
What is a Flux Reservoir?
info text
Where does Flux Reservoir's yield come from?
The yield comes from two sustainable sources:
Interest payments—a large part of borrower interest goes to Flux Reservoir depositors, paid in fUSD.
Liquidation gains—Your fUSD is used to liquidate under-collateralized loans, earning (staked) XRD at a discount (~5%).
What happens when depositing to a Flux Reservoir?
you buy into it, part of your fusd is converted to collateral, such that your collateral / fusd deposit ratio is equal to the pools collateral / fusd ratio. then you receive pool units that represent your share of the pool.
Can I withdraw my Flux Reservoir contents at any time?
Yes, there is no lockup period. Users are free to withdraw their Flux Reservoir deposits whenever they want. There is no fee tied to it either.
How do you ensure Flux Reservoir depositors are primarily exposed to fUSD?
anyone can buy collateral contained in the Flux Reservoirs at a discount (which is small, so it was still bought at a profit by the Flux Reservoir).
Why are there multiple Flux Reservoirs?
Each collateral type (XRD or LSULP) has a separate borrow market and Flux Reservoir to:
Maintain independent interest rates and liquidations for each collateral asset.
Allow depositors to choose their exposure based on risk preference.
How do risks differ between Flux Reservoir?
Risk depends on the pool you choose:
Flux Reservoir depositors only gain exposure to the collateral they choose.
Separate pools compartmentalize risk, preventing failures in one asset from affecting the whole system.
However, all fUSD holders remain exposed to the overall collateral mix—XRD and LSULP, this includes the fUSD you have deposited into the Flux Reservoir!
Incentivized Liquidity
What is Incentivized Liquidity?
fUSD liquidity is extremely important to the success of Flux. Hence, liquidity provision of fUSD on DEXes is incentivized. Provide liquidity, and receive weekly fUSD airdrops.
Where do these Incentives come from?
A substantial part of borrower interest goes to incentivizing liquidity provision.
Where do I provide liquidity?
all dexes info here
Can I just provide liquidity at every price?
No, if concentrated, keep within ranges. Expand on info here.
ILIS Buy Backs
What are ILIS buy backs?
It is of crucial importance to make sure the ILIS token is valuable, as this is what ensures the safety of the DAO. To make sure there is substantial incentive to hold ILIS, part of the protocol's yield is funneled into buying back ILIS, and burning it.
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