The Flask-Fund Utility Token (PWR) is the native digital utility token, it provides access to FSK services to play a vital role in the functioning of the FSK ecosystem and is intended to be used only as the primary utility token on the network.
Our ecosystem is also composed of the Energy token which is the fuel of the traders who will place the trades. The last token that makes up the ecosystem is the ROY token which is the token that the developers of the project own to receive a small funding fees in exchange of their work.
The main use of the PWR token is to be the counterparty for sending BUSD to an FSK pool.
FSK has no interest in making this token speculative. Its price variation must correspond transparently to what is happening in the fund.
The PWR token is the one that will be purchased to enter the FSK ecosystem. It is the main token that will have several uses:
- It represents a share of the BUSD in the fund.
- It has no intrinsic volatility, as buying and selling it does not change its price.
- It is used to determine the number of votes a user has in the DAO.
- It can be stacked and locked for a customised period of time to ensure the stability of the amount of BUSD in the fund.
Finally, as it represents a share of the fund, it facilitates the process of rewarding users’ good deeds against the fund.
All rewards (investor accumulation, business competition, governor’s fees) constitute a regular hit of PWR tokens allocated to eligible users.
The objective of this token is to have no intrinsic volatility, and no possible speculation of its value.
- It is a token that does not pump on the buy side due to a mint mechanism (you add BUSD to the fund, and the corresponding amount of PWR are minted to you, representing a share of the fund).
- It is a token that does not dump on sale due to a burn mechanism (you gain BUSD in exchange of burning PWR)
- And it have no variation other than the result of traders various trades, farming and rewards.
Speaking of farming we want to get a token that allows everyone a minimal return of 30% APR, if we reach and outperform this target then the PWR value will appreciate accordingly. We can’t have terrible variations on this token and it could be like an algorithmic stablecoin with a direct return for its investors because owning and stacking it provides a common pool of traders who will naturally work this cash. In conclusion, as PWR represent a share of the FSK fund, no rugpull, no sell run can happen, and the token price will evolve slowly by mirroring directly the farming and rewards (dump) and traders performances (pump or dump). As a result, a strong trust can be achieved in holding this token.
When buying PWR, the fund will mint the right amount of PWR to match the PWR price and send it to the buyer. In doing so, the price of PWR (against the BUSD) will remain unchanged.
When selling PWR, the same process will occur (PWR will be burnt in exchange for sending BUSD to the seller).
Note that because of the selling fee, the price of PWR will increase slightly when someone sells it. The selling fee serves multiple purposes:
- The basic sales fee acts as a reward for the long-term holder. Because the later a user sells their PWR, the higher the price of the PWR will be, due to the fees paid by previous sellers.
- The dynamic selling fee acts as a protection against speculators. In order to prevent speculators from buying REPs before the end of the transaction and reselling them directly after the end of the transaction, a dynamic fee has been set, corresponding exactly to the percentage increase in the price of the PWR. Note that these dynamic selling fees decrease over time.
Finally, each reward in the FSK ecosystem will take the form of a funding fee: at the end of a reward cycle, a defined % of the REP supply is struck and allocated to eligible users. This serves several purposes:
- Rewards are disconnected from the amount of BUSD that a good rewarded user has invested. It is therefore a strong incentive for individual participants to act in the right way (locking the PWR for a long period of time or making successful trades)
- This strike is a form of redistribution of each individual’s share in the fund, increasing the share of good users (relative to the interest of the fund) and decreasing the share of bad users.
something that is really important and needs to be understood. The lock-in token period. We have established in our system a lock period for tokens, because how can you have liquidity if it disappears? That’s why when the lock period is higher we reward people more. Because in a relationship of trust, those who give us the most will be rewarded.
If you are afraid, know that in case of major worries, all funds will be delocked via a quick DAO vote and that all PWR will be at your disposal without fees.
Let’s take the following example, in the FSK pool in BUSD we have 1 million dollars.
The token is $1
A trader takes a trade, this one is perfect and allows (let’s take the most absurd example but which represents the thing well) the increase of the total pool in BUSD by 2.
So when the trade closes the PWR token will not be $1 but $2.
The PWR token will multiply its price by 2 as we have no maximum profit limit for a trade.
On the other hand the loss limit is fixed. So to take our example with a PWR$ token at $1.
A trader engages in a bad trade, this one will only manage it poorly.
The trade loses and continues to depreciate.
=> The system will automatically close the trade at a maximum loss of 15% no matter what happens.
Let’s say a trader commits the maximum he can and this results in an exposure (again let’s take absurd and maximum values) of 10% of total funds by this one trade.
=> then the trade will automatically cut off at -15% and the pool will only be affected by this 1.5% loss.
We have made a set of rules related to FSK that you can find in this article on the ecosystem !
“trade in a safer place”
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