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FSN token
The tokenomics of Fusion is an advanced topic entailing time-locks, time-value, staking tickets, multiple chain presence, block rewards, halvings (around every 2 years) and three types of gas fees. It is built to be a fundamentally desirable coin with predictable scarcity that can be used as payment without losing anything and yet offer a high interest rate, for all time. Sounds impossible, right? Possibly. The last part is only possible if Fusion becomes a highly used network. But so far, it’s off to a promising start.
A Mainnet coin
An important point seldom made for FSN, is that it's a coin and not a token. Why is that important? It's important because the dynamics are secured by a great number of validators whereas a token's supply might well be governed by a centralized party who changes the rules at their pleasure. To change the dynamics of Fusion all the validators need to be in agreement. Fusion's history actually has a case of this happening, where a vote was held in the aftermath of the swap wallet theft. It also means you need FSN as gas in order execute actions on the Fusion blockchain. In uses of FSN you can read more about what makes it special.
Ticketed Staking, Time-locks and Time Value
In order to run a node and partake in staking, 5000 time-sliced FSN (spanning at least 30 days into the future) is needed to buy a ticket for a chance for your node to sign the block and get the block reward. The ticket purchasing is generally handled automatically, and the result is a relatively smooth ROI over time from the block rewards. Each node can run multiple tickets. On Fusion Mining you can view the current total of tickets being bought and the current number of validator nodes that buy the tickets as well as all kinds of detailed data for each of them. The number of staking tickets being bought have a direct relation to the "active supply of FSN" since every ticket effectively locks out 5000 FSN from "active supply" at least 30 days into the future.
Fusion differs from most staking networks in that it offers a possibility for secure delegated staking by use of Fusion’s time-locks. This makes it easier to create secure pools that benefit those who don’t want to run a node but still wish to benefit from the staking rewards without putting their tokens at risk. Current such pools are listed here.
The time-lock feature enables a holder to slice their FSN in 2 time-slices. One half will be from present time, to a time of their choosing and the other half from the time of their choosing until infinity. This way they can send a time-slice to a pool which lasts from present time and the following 6 months (for example). The pool uses the slice to stake FSN and sends the agreed upon yield to the time slice lender. Meanwhile the lender still has the infinity end of the token still in their wallet and is guaranteed the original FSN they had at the time they chose, no matter what happens.
Making the extraction of interest through time in the process of staking as simple as possible, as described above, is important, because it has the potential to unlock the idea of time value. If it’s not simple to unlock value TL FSN, then this limits how useful it is as payment, and if TL FSN can be used as a currency, then there is little reason to sell FSN. Instead you can share its time value over and over again, in order to use it.
It’s also important that a relatively solid interest rate can be maintained through time despite the halvings. And this is where gas comes in. Fusion is one of the busiest blockchains at the moment according to coinstats.network. There are three types of gas fees. 1. The regular one, which can be compared with Ethereum (but of course much, much cheaper at the moment). 2. An extra fee of 0.001 FSN for swaps and TL transactions. 3. An extra fee of 0.1 FSN for USAN generation.
The important one here is 2, because TL transactions and advanced swaps is truly what makes Fusion unique, and since Fusion is a platform with major interoperability ambitions, the goal is not just to have lots TL transactions and swaps with FSN, but for pretty much all cryptocurrencies and crypto assets. There’s really no telling how big the demand may eventually be. However, we can easily calculate how big it would need to be in order for gas rewards to compete with current block rewards of 2.5 FSN every 13 seconds. This would be 192 TL or swap txs/s. If Fusion is a truly successful network in the niche of TL and swap txs that does by no means sound like impossible numbers to me. It is also much less than the network can currently handle, which is the realm of 2000-2500 txs/s. More in depth analysis of halvings and predictable time value is found in the gas section.
So perhaps the case of predictable scarcity that can be used as payment without losing anything and yet offer a high interest rate for all time is possible after all? Today we can't know this. Only in 4-6 years when a few halvings have already happened, can we know better how well the concept ages.
Initial Supply
FSN, the native coin of Fusion was initially issued on Ethereum in 2018 with a fixed supply of 57 344 000 FSN. Fusion mainnet was launched on June 30, 2019 with an initial supply mirroring these 57 344 000 FSN. In this section of FSNEX you can view how many of these still remain on Ethereum and Fusion's mainnet and other interesting supply data. As the original FSN on Ethereum is burnt it is awarded mainnet FSN at a 1:1 ratio.
Block Reward Growth and Burns
Since the main net launch, circulating supply is growing at a rate of 2.5 FSN every block (around 13,2 s), which is awarded to the signer node every block. It has also decreased through a 519 119 FSN burn on block 957394. And at block height 4915200 a halving will occur where block rewards go from 2.5 FSN to 1.25 FSN.
Halvings such as this will occur every 4915200 blocks, making the block reward growth smaller and smaller with time, in a manner where the supply of FSN will never be greater than 81 920 000 FSN. In about 40 years we’ll be pretty close to this amount. Worth noting here is that it is supply growth that is diminishing and not necessarily block rewards, as these also have a gas element to them. Current supply can be seen on FSNEX .
Liquidity Provision and Cross-chain existence
AnySwap has brought FSN to have a supply on other chains as well as a cross-chain asset called aFSN. To find the contract of aFSN on each chain look here and search for them in each chains block explorer to see how much exist on every chain. AnySwap has also made FSN into a major asset for providing liquidity in automated market making both on these other chains, but perhaps more importantly on Fusion itself, which will always be AnySwap's first chain. If you provide liquidity with FSN there are two benefits. 1. You can collect the 0,3% fees that come from swapers into the liquidity pools whenever a swap is executed and 2. FSN and aFSN LP-pairings could be attached to farms which might yield additional rewards. Liquidity provision is a great usecase for any cryptocurrency, perhaps especially in times where the currency is considered to be overvalued. In such a situation it can be a great alternative to selling. Though in general, you want to avoid it in times of extreme volatility due to the effects of impairment loss.
The Licensing Model
For complete tokenomic overview Fusion’s licensing model https://www.fusion.org/licensing needs to also be mentioned. As of yet it has not really come into play, but once Fusion can display all of its functions in full use, bringing Fusion features to other chains through a license may end up happening. These licenses are obtained by sharing TL FSN with Fusion Foundation for each year the license will be used. If Fusion technology becomes popular to use in other blockchains, private and public (perhaps in particular for private blockchains), then this should also result in an even greater amount of FSN locked away from being sold on markets and additional funds for Fusion Foundation to keep on improving the chain.
Last modified 1yr ago