A new project named Fluidity aims to change the way crypto coins are handed out for different projects. Instead of rewarding mercenary farmers, Fluidity wants to pay people for actually using a protocol.
The project works by allowing users to deposit a stablecoin into the Fluidity protocol and receive a Fluidity-wrapped token (fToken) in return.
The stablecoin is then deposited into a yield-earning protocol like Aave or Compound, and the fToken can be used to buy NFTs, make simple transfers, or join liquidity pools.
The more the fToken is used, the higher the chances of winning a payout, which is determined by total value locked, daily active users, and gas fee of the specific transaction.
The payout varies, with about half of transactions winning something, and on average, once every three months, someone winning a large payout.
Fluidity’s CEO Shahmeer Chaudhry explained that eventually, protocols can program the behavior to their specific needs, like controlling the trigger for a payout. Fluidity also mitigates wash trading by factoring in gas fees and rebalancing the yield distribution, so if transactions spike up, the probability of payouts goes down.
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