The Problem with Yield Farming Tokens: No Inherent Value or Sustainability
The problem with the majority of yield farming tokens is that they have no meaningful utility. Because there is no compelling reason to use or hold these tokens, people farm the tokens, sell their holdings, and move onto the next farming project.
Furthermore, since most of the projects behind these tokens are not revenue-generating businesses, it’s nearly impossible for the average farming/staking system to sustain itself over the long term.
FRMx is Different
First, FRMx it is imbued with many valuable utilities, and it grants its holders governance over the FRMx and FRM staking regimes. This means that FRMx holders will inform, shape and vote on the structure of upcoming FRM and FRMx staking rounds.
Moreover, FRMx is sustainable. Remember the FRM we buy back off the secondary market from the revenue generated from our Staking-as-a-Service business? So far we have bought back over 1,000,000 FRM and counting…
This FRM will be used to create a sustainable ecosystem where it can be staked to earn FRMx, and that FRMx will be returned to the ecosystem as rewards for subsequent staking rounds. To add more sustainability to the system, we can simply buy back FRMx and use that as rewards for staking FRM. As we generate more revenue from our upcoming products like our P2P fiat/altcoin exchange platform, our cross-chain DEX, and the Foundry incubator, the system will create a positive feedback loop, ensuring that FRMx is readily available for farming and staking for years to come.
And because FRMx has at least half a dozen utilities, there are plenty of reasons to simply hold FRMx and enjoy its many benefits.
FRMx Utilities
There will be 7 core utilities for the FRMx token to start, with more in the pipeline that we will be revealing in the coming months. One can compare the FRMx token to the American Express Black Card: rare, valuable, and useful. Here is a rundown of the utilities:
Staking Governance
A core utility of the FRMx token is to govern the FRM/FRMx staking regimes. The FRMx governance committee will consist of individuals who hold a threshold amount of FRMx and FRM in their UniFyre Wallet. The committee will propose and vote on decision concerning staking, liquidity pools, Pool Drops, and more. Here are a few examples of items that governance committee will preside over:
- The structure of staking rounds (APY, length of staking, size of pools, etc)
- The timing of launching staking pools
- The tokens involved in each staking round, such as staking FRM to earn FRMx; staking FRM to other project’s tokens like FRM -> Gather; FRM -> UniFi; FRM -> Meridian, etc; or staking FRM to earn FRM.
The details regarding how much FRMx one must hold and other benefits are explained in the governance section below.
Greater Value from Pre-Sales
Another unique aspect of the Ferrum Network ecosystem is our incubator — The Foundry — where we help bring promising early stage projects, like Bondly, to the market. As many know, anyone holding 100,000+ FRM in their UniFyre Wallet can qualify for pre-sales in incubated projects. However, holding FRMx provides even greater access and value.
50% Greater Allocations
By holding a threshold amount of FRMx (a reasonable amount to be determined post-launch after the price has settled), holders will be entitled to a 50% greater allocation.
Option to Auction Off Unwanted Allocations
For those that hold FRMx but don’t want to invest in the pre-sale, we are developing a system where FRMx holders can auction off their allocation. Therefore, FRMx holders can generate value for themselves even if they don’t want to invest in a particular project.
Staking FRM to Earn FRMx
Another valuable use case for FRMx — and the primary way to obtain it — is by staking FRM to earn FRMx. But rather than the Ferrum team determining the details around those staking rounds, we are empowering the FRMx/FRM holders to help shape the upcoming FRM staking rounds.
By requiring that the governance committee members hold both FRM and FRMx, these individuals will have the best interests of the project in mind in structuring these staking rounds.
Another benefit of the FRM -> FRMx staking regime is that it eliminates inflation on the FRM token because rewards are not given in FRM, they are given in FRMx. And because the value of the FRMx token is high relative to a FRM, the staking rewards will be higher than otherwise would have been possible. We will release more information on the FRM -> FRMx staking round in the near future.
Staking the FRMx/FRM LP Token to Earn FRM/FRMx
One amazing feature of our advanced Liquidity Staking technology is that users can stake their LP tokens to earn native tokens. Therefore, we will be running staking rounds (structured by our governance committee), where users can stake their LP tokens to earn native tokens, including FRM and FRMx. This system will increase liquidity on Uniswap and prevent participants from abruptly removing their liquidity.
Liquidity Provider Rewards
We will also implement a standard liquidity pool program whereby LP providers can earn FRMx for providing liquidity to the FRM liquidity pool. More details on the standard Liquidity Pool program will be released shortly.
FRMx Pool Drops to 100,000+ FRM Holders
Because the amount of FRMx in the initial circulating supply is extremely small, we will be conducting a FRMx Pool Drop to everyone holding 100,000+ FRM in their UniFyre Wallet. The timing, amount, and other details concerning the FRMx Pool Drops will be announced a few days after the FRMx launch.
FRMx NFTs
Finally, we will be minting a small number unique FRMx NFTs, initially reserved for the governance committee members. These NFTs will backed by FRM to ensure they have inherent value. Holding a FRMx NFT will entitle its holder to additional benefits, which we will be revealing in the coming weeks and months.
FRMx Token Economics
The FRMx token supply is designed to be scarce, with the vast majority of the supply is reserved for staking, LP and FRM holder rewards.
- Total Supply: 33,000 FRMx
- Reserves: 97.5% reserved for staking, LP rewards and FRM holder rewards
- Listing: 2.5% for FRMx listing on Uniswap
- Initial market cap at launch: $16,500
