2 ways to unlock true time-value on Fusion!
One of the core concepts of Fusion is that assets have time-value and that Fusion can help unlock it.
There are loads of different ways to earn money with time on Fusion, like providing liquidity on Chainge, farming on some other DEX, or staking in your very own Fusion node. But these are just ways with which you can earn money with time, which is not quite the same as unlocking time value which should be more akeen to a way to get more money now, through giving up some aspect of your assets related to time.
The Chainge “earn” feature where you get a greater amount of future assets from your current assets + some bonus CHNG, is close to an example of unlocking time-value, but it’s not the only one and actually it doesn’t quite get there. A similar example is just buying futures in the Chainge futures DEX. In fact a lot of time this will be a better deal than locking in new assets, especially if it’s smaller amounts. This is though not quite a true way to unlock time value either because even though you will end up with more of the same asset as you locked, if you wanted another currency right away, you’d likely end up in a loss trying to sell off the TF-assets to get the asset you wanted.
The most basic way to play with time-value on Fusion is to sell TL-FSN. However, currently TL-FSN can only be traded on the Quantum Swap assets and FSN is the only meaningful asset available there. One day this will be much more interesting, when TL-FSN could be directly exchanged for any asset in a 100% secure way. Then this will also be a way to unlock true time value.
True unlocking of time-value should allow you more money now, to do with whatever you want. So, the award should ideally be a stable coin, and if not at least a coin that’s not directly related to what you already had.
Why is this an important difference?
The difference is that in this case, you could if you desired buy more of your OG asset off the market, or you could do something else with it. It’d be up to you. Regardless of your choice, you have extra money. Kind of like taking a loan from yourself. Are there mechanisms on Fusion today that allow this? Yes, I believe there are currently 2 true variations of this already in use.
- Chainge does have one feature that does truly unlock time-value and this is writing options. Writing options is done with TF-assets, and in exchange for locking them in you will get an option. If it’s not USDT it’ll be a call option. The call option can be used to provide liquidity, or it can be sold right away. IF you do sell it, you will have some USDT besides the assets you locked in, thus you have just extracted time-value out of the assets? Is there no catch? Yes, there is a catch, and the catch is that your locked assets can be sold to you at the strike price. I guess you can say you give up some “moon potential”, in exchange for more money now. So unless you think the moon is coming in the very near future, it’s a great way to extract time-value from your assets. But what makes this possible? How can it be that you can just take out money now? In this case I believe the primary drive in keeping CO-options liquid enough to make this viable, is that CO-option/USDT pairs have extremely high yield. Because of that high yield people are willing to provide liquidity even though it’s a risky CO-assets are risky and even inevidibly dissapears at the set time. Whether these yields are sustainable in the long run remains to be seen. But regardless, I believe this will always be interesting, because I do think extracting value this way can be desirable even at much lower rates than what is currently possible.
- The other way to extract real time-value right now, is to lock FMN, CHNG or Chainge LP-tokens (mostly FSN/FMN/FREE pairings) in the freemoonfaucet.xyz minting feature. Here you use the time value of these tokens to mint FREE. Your tokens or LP-tokens will get locked in for a very long time, and in return you get a % of the value in FREE right, with which you can do whatever you want (including buying more of the assets you locked in). The effects of this may of course result in negative sell pressure on FREE, but FREE is an asset that also gets monthly buy and burns to help it keep value and should overall not have much danger to not be able to hold its value against BTC, with which it is extremely liquid. Thus it has similar qualities as a stable coin, without actually being one.