Bridge to Flare now using Stargate to take part in rFLR rewards.

Flare’s DeFi ecosystem is poised for a new phase of growth in liquidity, dapp development and overall network participation due to the launch of a new 510 million FLR DeFi emissions program, approved via community governance.

The FLR DeFi emissions program has been designed to incentivize the provision of deep stablecoin, FLR, and ETH liquidity to the network. This is intended to support the growth of Flare’s DeFi ecosystem in anticipation for the launch of FAssets, a trustless bridge powering DeFi for non smart contract assets like BTC, XRP, and DOGE.

• An initial 510 million FLR tokens (of Flare’s 20 billion FLR incentive pool) will be made available to selected DeFi protocols and pools to incentivize community participation
• Monthly emissions will increase over time as more protocols and pools are added to the program
• Dapp users will be able to claim their FLR emissions each month directly via the Flare Portal

How does the Emissions Program work?

Launching first on decentralized exchanges (DEXs), the emissions program will reward active participants with Reward Flare (rFLR) tokens for adding liquidity. The rFLR incentives are strategically allocated by the Emissions Committee to selected dapps and their pools or vaults, with the aim of attracting stablecoins and ETH from other chains.

At the end of each reward period, dapps will allocate rFLR rewards to qualifying users that have participated in rFLR-incentivized pools. The first step will be for users to claim their rewards via the Flare Portal, at which point they will start vesting and accruing monthly FlareDrops. The rFLR will vest linearly over 12 months, which means 1/12 of the rewards can be withdrawn from the Portal each month as WFLR. Note that early withdrawal of unvested rewards will incur a 50% penalty, so users should wait for their rewards to vest if they wish to maximize returns.

Why is stablecoin liquidity important?

Stablecoin liquidity is key for DeFi transaction efficiency. Deep stablecoin liquidity ensures smooth and consistent transactions, while also reducing slippage and volatility in trades. It is particularly important for the healthy operation of a blockchain ecosystem and will be crucial for the launch of the FAssets system.

FAssets enables non-smart contract assets like BTC, XRP and DOGE to be brought to Flare and used in DeFi to earn a yield. The success of the FAssets system relies on stablecoin liquidity to execute on core functions. FAssets will be backed by a mix of collateral (including stablecoins) bridged from other chains. The system uses over-collateralization to secure the value of the minted assets on Flare, which means if the collateral value falls below a certain threshold, liquidations will be triggered. For the system to function smoothly, liquidations should execute efficiently; at fair market prices and without delays in order to rebalance any shortfalls. Deeper stablecoin liquidity means quicker liquidations and more access to collateral top-ups to maintain efficient FAsset function.

Deep liquidity pools available on DEXs are also required to support healthy lending & borrowing protocol function, so liquidations can be performed in case of under-collateralized borrow positions. Lending and borrowing is a key component of blockchain DeFi ecosystems and will serve as an additional way for users to put their FAssets to work earning yields.

This is all designed to support a secure and smooth operation of Flare’s DeFi ecosystem, while allowing users to earn more yield.

Which dapps are participating?

A robust DeFi ecosystem requires a broad array of dapps that serve different functions. The emissions program is already live on the SparkDEX and BlazeSwap decentralized exchanges, with more dapps being added in the near future.

Live dapps

• SparkDEX: A Uniswap V3-style DEX with concentrated liquidity pools that include the following assets:
  • sFLR (Liquid staked FLR token from Sceptre)
  • WFLR (Wrapped FLR)
  • USDC.e (Stargate-bridged USDC)
  • USDT (Stargate-bridged USDT)
  • USDX (Hex natively-issued stablecoin)
• BlazeSwap: A Uniswap V2-style DEX with a broad range of liquidity pools
• Kinetic: A borrow & lend protocol from Rome Blockchain Labs, a team that built Benqi

Upcoming dapps

• Enosys: A Uniswap V3-style DEX with concentrated liquidity pools
• Raindex: An intents-like DEX that uses the Flare Time Series Oracle (FTSO) for advanced trading operations that mimic those of centralized exchanges

Maximizing yield with DeFi strategies

In order to take full advantage of Flare’s growing DeFi ecosystem and new emissions program, users can experiment with a variety of strategies running across multiple dapps. As always, it’s important to do your own research, but here are two example pathways to help users get started:

Example Strategy 1

• Bridge USDC or USDT to Flare from another chain by using the Stargate bridge. You will receive USDC.e or USDT.
• If this is your first time bridging to Flare and you have no FLR in your destination wallet, you will automatically receive a small amount to enable you to immediately transact on the network.
• Ensure you add the tokens to your wallet so the balance can be reflected:
  • USDC.e token address: 0xFbDa5F676cB37624f28265A144A48B0d6e87d3b6
  • USDT token address: 0x0B38e83B86d491735fEaa0a791F65c2B99535396
• Swap half the value of USDC.e/USDT in exchange for wrapped FLR (WFLR) via SparkDEX or BlazeSwap
• Add liquidity in equal USD values to incentivized pools like SparkDEX’s Farm

Example Strategy 2

• Swap bridged USDC.e/USDT for WFLR on one of the participating DEXs
• Deposit WFLR on Sceptre to mint the sFLR liquid staking token
• After sFLR is minted, deposit sFLR on Kinetic when it goes live. Users lending assets can borrow other assets against their deposited position, such as USDX
• Use the USDX in the Clearpool vault for additional yield