Fulcrom Finance
  • About Fulcrom
    • Fulcrom Finance
    • What is perpetual trading
    • Spread
    • Slippage
    • Fees
    • Revenue Share
    • Liquidation
    • Tokenomics
    • Roadmap
  • Core Modules
    • Trading Module
      • Trading Module Features
      • Trade Lifecycle
    • Fulcrom Liquidity Pool (FLP)
    • Liquidation Engine
    • Staking Module
      • $FLP
      • $FUL
      • $esFUL
      • Boost Points
      • Vesting $esFUL
      • Staking Parameters
  • Other Features
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      • How to apply referral code?
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      • How to start receiving notifications on Fulcrom?
      • How to start receiving notifications on Telegram?
      • How does the liquidation warning notification work?
    • Take Profit & Stop Loss Orders
      • How to set Take Profit/Stop Loss Orders when creating new positions?
      • How to set Take Profit/Stop Loss Orders after opening positions?
      • How to view the existing Take Profit/Stop Loss Orders?
    • Trading Competition (Cronos)
      • Aug 2023
      • Jun 2023
    • zkMania (zkSync Era)
      • zkMania Season 1
      • zkMania Season 2
    • croMania (Cronos Exclusive)
    • zkEVM Frenzy (Cronos zkEVM)
    • Fulcrom Mayhem
  • Additional
    • Get Started on Cronos zkEVM
      • Bridge Asset via Official Bridge
        • How to deposit CRO for zkCRO
        • How to deposit ETH for vETH
        • How to deposit USDC for vUSD
        • How to deposit USDT for vUSD
        • How to deposit DAI for vUSD
      • Swap via H2 Finance
    • FAQ
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    • Smart Contracts
    • Supported Tokens
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    • Risk Disclosures
    • Usage Disclaimer
    • Terms of Use
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On this page
  • Overview
  • Trading Counterparty
  • Real Revenue and Yield
  • Rebalancing to achieve ideal FLP state
  • Buffer Amount
  1. Core Modules

Fulcrom Liquidity Pool (FLP)

PreviousTrade LifecycleNextLiquidation Engine

Last updated 6 months ago

Overview

The Fulcrom Liquidity Pool ("FLP") is an index of tokens used for swaps and leverage trading. It can be minted using any index asset and burnt to redeem any index asset.

The price for minting and redemption is calculated based on:

Total worth of assets in index including profits and losses of open positions / FLP Supply

Trading Counterparty

The purpose of the FLP is to provide a counterparty to the trading activity of traders on the platform. What this means is that when trades profit and close their position, their profit is taken from the FLP, decreasing FLP’s value. Likewise, if a trader makes a loss and closes their position or gets liquidation, their losses are taken from their collateral and given to the FLP, increasing FLP’s value.

Real Revenue and Yield

Furthermore, FLP holders are also rewarded with 60% of all the fees paid by traders on the platform, making FLP holders the largest beneficiaries of the transaction volume generated on Fulcrom.

Cronos zkEVM Exclusive

All vETH & vUSD yields earned by our smart contracts on Cronos zkEVM will be deposited into FLP automatically, which increases the AUM and price of FLP, in turn rewarding FLP stakers.

Note that the yields are deposited via the direct deposit function, so we won’t dilute the rewards earned by the FLP stakers in our community.

Past deposit record can be accessed via this API:

Rebalancing to achieve ideal FLP state

Similar to LPs of stable swaps, there is no fixed proportion of tokens to be held in the pool. However, there will be costs and incentives associate with minting/redeeming FLP for tokens that have weights that vary from the ideal state of the FLP

Token weights are adjusted to help hedge FLP holders based on the open positions of traders. For example, if a lot of traders are longing ETH, then ETH would have a higher token weight, if a lot of traders are shorting, then a higher token weight will be given to stablecoins.

On a downtrend (shorting positions expected to increase), a larger weight will be given to stablecoins, intrinsic FLP value decrease is minimised, as compared to if a higher weightage of non-stablecoins were held. This works vice versa, if more traders are longing, a higher weightage will be given to non-stables.

Token swapping rates in FLP are determined according to FLP targeted state where token weights will be adjusted to help hedge FLP holders.

You can check FLP Index Composition under Analytics > FLP Pool

Buffer Amount

Fulcrom has set Buffer Amount for each indexed token according to their supply figures on Fulcrom.

The Buffer Amount is used to safeguard the fund in pool, protecting users by monitoring the amount of a token that is reserved only for trading.

When the Pool Amount is under the Buffer Amount:

  1. You will see an “insufficient liquidity” warning message under the trading pair when trying to open a position.

  2. You can only open a Short Position on that trading pair. Opening Long Position will be temporarily disabled.

  3. Existing positions will not be affected.

  4. Swapping the affected token out of FLP will be temporarily disabled. Swapping the affected token into FLP will not be affected.

SwapOutAvailableAmount=PoolAmount−BufferAmountSwapOutAvailableAmount = PoolAmount - BufferAmountSwapOutAvailableAmount=PoolAmount−BufferAmount

Once the Pool Amount is larger than the Buffer Amount, swapping and trading will resume automatically.

The team is also doing weekly review for this Buffer Amount parameter according to market situation and do manual adjustment if needed.

You may check the composition and performance of FLP on our page.

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https://token-rewards-api.zkevm.cronos.org/distribution-history/0x4bb74a27bfe30afd8974ac84cfea62f3e4515a7c?page=0&size=50
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