Minting fAssets
Last updated
Last updated
In review, fAssets like fAlgo or fUSDC are the Folks Finance (FF) liquid staking token (LST) associated with ASA's such as Algo and USDC. These fAssets are minted when users deposite assets into FF, but in most cases aren't seen by the user. The fAsset is saved, either in an escrow wallet, or within lending liquidity pools on one of the Dexes. These tokens are then used by Folks to back loans in their lending markets as collateral or manage the swaps in their lending pools.
Folks obscures the fAssets to simplify the user experience in a way that simulates depositing assets in a bank, while still harnessing the simplicity of LST accumulation tracking. There are times, however, when holding the fAsset would be advantageous, such as using them as collateral backing at a location other than FF.
The CompX router was designed with the ability to directly interface with the FF smart contracts that govern the treatment of fAssets. By setting up a swap in the router, the user is able to directly deposit their asset into the folks lending wallet, and keep the fAsset in the controlling wallet rather than an escrow wallet.
If the user has fAlgo and would like to reclaim their Algo simply change the direction of the swap, fAlgo -> Algo and perform the swap. This will most likely route everything through the fAlgo burn transaction and redeem the Algo back into the users wallet. Again, if routed through a dex, it means that the user is getting Algo at a higher rate than a simple burn transaction.
The process is simple. To deposit into FF lending markets, and hold onto their fAssets, the user would set up a swap as outlined in the section. The source asset should be the asset represented by the fAsset, for example, Algo can freely be swapped into fAlgo. The minting of fAssets are usually not being run through a dex and so don't incur fees beyond paying for the transactions themselves. Note in the example below, 100% of the "swap" is going through a 0% fee tier. This is the ASA deposit -> fASA minting transactions. No liquidity pools are used and so no fees are charged to the user. There may be instances in which a portion of the swap actually does route through liquidity pools. In that case, there will be other fee tiers listed on the swap and fees will be paid to the router. However, this means that the user is getting a better rate than a simple mint transaction, so despite the fees, they are getting a better value for the swap. Note that the predicted value of the fAlgo in the swap below is off. This is due to the absence of liquidity for this swap in the dexes, and doesn't reflect a loss in value.
