Litepaper
What is Ferro Protocol?
Built on the Cronos blockchain, Ferro Protocol is a StableSwap AMM protocol that brings a more efficient way for users to exchange and farm tokens by creating more efficient pools consisting of highly correlated assets, as well as allowing better composability between protocols in the Cronos ecosystem. Compared to other DEXes, some of the advantages of Ferro Protocol are:
Lower fees - Due to gas usage & traffic efficiency of the token swap/exchange mechanism versus normal DEX
Lower slippages - Highly correlated assets reduce price divergence within tokens of the same pool
Limited to no impermanent loss - Highly correlated assets reduce overall market exposures of the pools
More utilization of pools - Highly correlated assets allow for more utilization, providing opportunities to benefit by deploying pools into other DeFi protocols.
Ferro Protocol offers two main features:
1. Ferro Swap
Users can exchange one token with another as long as both tokens are available in any of the pools within the protocol. You can also customize your token exchange by specifying allowable Slippage in %.
2. Liquidity Pools
Apart from swapping, users can become liquidity providers and earn incentives by staking their LP tokens into the liquidity farm. You will be rewarded with our native tokens $FER together with the opportunity to lock your tokens with different maturity options to boost your returns.
The typical liquidity pools in Ferro Protocol will also carry a mechanism to incentivize/disincentivize users to LP a particular token through Deposit Bonus and Withdrawal Penalty, in order to balance the proportion of tokens in the pool.
Token Economics
There are 2 types of tokens to fuel the overall Ferro ecosystem, each with different utilities, namely $FER and $xFER.
$FER token is the main reward/incentive token in the protocol, while $xFER token is the yield-bearing token. Users can opt to convert $FER to $xFER at the prevailing exchange rate at any time.
When users provide liquidity to Ferro Protocol, they will receive the corresponding Liquidity Provider (LP) Token as proof of their participation. These LP tokens can then be staked to receive the following emission reward:
60% of the reward in the form of $FER token, available to be harvested immediately
40% of the reward will be directly converted into $xFER at the prevailing exchange rate and will be automatically directed into the 30-day locking vault. Users can choose to upgrade their vault setting as well for higher rewards.
There is no restriction on the $FER token that is harvested (i.e. the 60% portion). Users can choose to convert it into $xFER, sell it directly, or use it to provide liquidity back into the protocol. Holders of $xFER token can opt to lock their $xFER token with different maturity options. By locking their $xFER, users can boost their APR in the farm that they are invested in by a Boosting Factor.
$FER has a fixed total supply of 5,000,000,000 (5 Billion) and will be distributed as follows:
| Category | Allocation | Usage | Remark |
|---|---|---|---|
Team | 14.5% | Team Allocation | 24m linear vesting on a monthly basis |
Public Sale | 0.5% | IDO | 10% immediate unlock; 90% monthly vesting at 10% |
Ecosystem Reserve | 35% | Reserve for ecosystem related initiatives | Unlocked upon Token Generation Event, but size and timeline of utilization will depend upon needs and initiatives |
Operations & Partnerships Reserve | 20% | Protocol and infrastructure upgrades, future audits and external partnership/marketing efforts | Unlocked upon Token Generation Event, but size and timeline of utilization will depend upon needs and initiatives |
Incentives & Liquidity Management | 30% | Community incentives, partner incentives, and liquidity management needs | Distributed over the course of 48 months |
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