Date: Tuesday, 5th January, 2021
Time: 13:00 UTC
The Freeliquid team was represented by @alexbriss. He judiciously shared with us detailed knowledge and information about the project.
1st Segment: INTRODUCTION
Q1 : Can you please introduce yourself and your background, also introduce the Team working on Freeliquid project
Ans : Sure. I am one of the community managers at t.me/freeliquid. Our team is spread across the globe and consists of people from different backgrounds: traders, developers, content writers, and more!
As far as our philosophy concerned, we leanr towards the original ideas of crypto - offering an anonymous, decentralized, and trustless exchange of value between people.
Q2 : Can you introduce the Freeliquid project, what critical problems does it solve that existing solutions are not solving and what’s the competitive advantage
Ans : Freeliquid is a lending platform that offers loans in our stablecoin, $USDFL, to people providing liquidity pools (also in stablecoins) as collateral.
Technically, you simply lock your liquidity provider (LP for short) tokens via our smart contracts and generate the respective amount of $USDFL (up to 90% of the initial pool value). This gives the LPs the ability to get funding while keeping their passive earnings from liquidity fees. There's more to Freeliquid Platform (like the FL reward program that is currently running), but that would be a brief description!
Regarding the advantages - we think that the main one is the support of liquidity pools as collateral (as opposed to "usual" crypto assets like ETH or wBTC). If you think for a second, stablecoin pools are a perfect collateral for lending. They have almost no volatility and are easy to price. Until Freeliquid launched, LPs could not use this advantage - now, they have a solution.
One more thing - the liquidation mechanism for our stablecoin pairs is completely switched off, since they have almost zero volatility. Thus, users can be sure that their funds are #safu at our platform!
Q3: Can you briefly describe the Top milestones you have achieved and your target milestones with timelines, also share your roadmap
Ans : We have just launched on 21st December 2020, so there is a long road ahead. Nevertheless, we are pleased to observe that the platform is working perfectly and new users are joining!
There has been a lot of liquidity coming to our native tokens, $FL and $USDFL. This is the main focus now, so people could easily use our platform and transfer funds back and forth. Also, the main FL rewards are running - it was also important to ensure that everything turns out great, which it did.
Regarding the plans - we definitely have a lot of them for future development. Note, however, that Freeliquid is governed by FL token holders, so development team can implement something only after successful approval vote of the community.
We are currently testing the support of Curve Finance - a platform with one of the largest total value locked in stablecoin pools. After Curve’s users understand that they can receive up to 90% of their pool value, you might guess how many funds we are expecting to flow into Freeliquid ;)
And as mentioned, we have to ensure the voting mechanism to be working. We are doing the final tests of the voting platforms’s GUI - it is expected to come online shortly. In the meantime, the smart contracts distribute more FL tokens that are used for the voting, as I mentioned.
The are more plans for adding utility to the $FL token, which I would not like to disclose, so people do not speculate on its price too much :) Again, it will be only proposals to our community - we will see how it turns out!
All this should be done in the matter of months.
2nd Segment: LIVE Questions
Q1 : I read that you have rejected the idea of performing an ICO or doing a private sale, for what reasons did you decide this? Why did you prefer not to?
Ans : Just to start - let me clear that this regards only the $FL governance token. The $USDFL token is simply generated when you take a loan.
There have been two main concerns of not performing private sales, etc.
1) As you mentioned, one reason is to ensure that our GOVERNANCE token is decentralized and not concentrated in the hands of big players. Of course guys you will tell - anyone with big funds can still participate in the reward program (more on them later), earning his huge share.
But even then, one whale cannot simply dump his whole position on day 1. The tokens are distributed gradually over months - so the supply and demand of tokens will shift slowly.
2) Second, rewards are distributed only to the users that provide liquidity to our native tokens, $FL and $USDFL. Through that we ensure the growth of our platform — not from some Venture Capitalists, but by the users themselves. And they (the loyal users) can also earn by helping Freeliquid! Win-win.
Q2 : Can you explain what the FL reward programs for liquidity providers entails, the benefits and how FL tokens distributed?
Ans : ... the previous question flows nicely into the next one.
We are currently running two reward programs, which in total will distribute 95% of the max total supply of $FL (which is 1 Mil). Both programs reward users that provide liquidity either to $FL or $USDFL pairs on Uniswap and lock them in Freeliquid Save afterwards.
The tokens are distributed proportionally to your share in the common pools of liquidity providers of $FL and $USDFL (they are treated separately, thus, two reward programs).
Providing liquidity to USDFL-FL is more risky, since $FL is not a stablecoin and the pool can suffer impermanent loss. The reward program will last for approx. 3 months more.
Providing liquidity to $USDFL pairs with other stablecoins is obviously less risky, but the reward rate is lower as well. The reward program will last for approx. 1 year more. All stablecoin pairs are summed together - it does not matter if you provide liquidity to USDFL-USDC or USDFL-DAI.
I won’t be taking more your time with explaining the rest of the mechanics of the program - please read them in our Medium article here: https://freeliquid.medium.com/freeliquid-rewards-distribution-a40b3de86dc
Make sure to understand that Freeliquid Save is completely independent from Freeliquid Borrow! You cannot provide USDFL or FL pairs as collateral and take loans for them. You are locking your funds again at our platform - thus, the rewards for not using the tokens :)
Q3 : What is your plan to be competitive than USDT? What are the advantages of your stable coin?
Ans : OK, now few more words about $USDFL.
1) We do not plan to "compete" with any other stablecoins - each of them has its place and economics. We just wish that all pairs have enough liquidity with $USDFL, having a 1-to-1 ratio.
2) I think the main advantage of $USDFL is the fact that it is backed by at least 110%+ collateralization ratio of the security. In simple terms, you can borrow max. 900 USDFL for providing 1000 of USD in stablecoin pools. This guarantees the "solvency" of $USDFL — every holder is sure that 1 USDFL is backed by even a larger value of USD.
3) Adding to the last point - moreover, $USDFL is backed by other *stablecoins*, not by volatile assets. Users can sleep well knowing that their USDFL are backed by an asset with no (or a very low) volatility. Note that this is not the case with MakerDAO's $DAI, which might turn the things rough if we have crashes like in March 2020. No hits on MakerDAO here - I love the platform and using them myself :) After all, we are their fork, haha.
Q4 : Have any platform audits been done and which teams were involved?
Ans : Yes, we have been audited shortly after the launch by Beosin Blockchain Security. They audited quite few projects, just check their Twitter or the website.
Beosin had some comments here and there but ALL smart contracts of Freeliquid passed the test and the whole audit as well. You can see the full report if you go at freeliquid.io - the link is right in the header.
Of course, all our contract are open-source and are uploaded on Github. The link is found on our website as well!
Q5 : Most of the project with Anonymous team do rug pulled/exit scam. Why you decided to remain anonymous? Don’t you think that it will have a bad effect on your project? How can we sure that there is no chance of scam?
Ans : Yeah mate, I understand your concern. Let’s be honest, there is a lot of scam and bullshit going on in crypto :)
We have decided to remain anonymous for several reasons:
1) Simply the private safety of our team. Unfortunately, in the countries of some our team members, "public" crypto developers have been robbed, kidnapped or worse.
2) The safety of Freeliquid as project as well. We do not want to have any regulators on our back - you all heard what has happened to "some" project in the crypto space lately. Of course, the platofrm is decentralized and can live on its own, but it would be much harder with the developer team being concerned about getting sued or whatever :)
3) Lastly, as I mentioned — it is how crypto meant to be! We do not judge people that go public, put their LinkedIn profile links everywhere and so on. We have just other views on how it is should be done.
Speaking straight — everyone can read our code open source, check the audit or just simply hang around and decide for themselves. If you do not like it - do not use our platform, that's it. Do not trust shiny promotions and promises, verify the code!
p.s. Do not forget, that you get 90% of your funds immediately as a loan - you have them on your personal wallet and our smart contracts have no access to them. Would be stupid for developers to scam people for 10% of the funds only ;)
Q6 : There have been a huge exploits/hacked have been made this past few weeks in defi platforms? How can we know our funds are safe in your platform and lets say the worst thing happen, do you have insurance funds to cover up the stolen funds?
Ans : Well, of course we cannot guarantee that some Vitalik Buterin #2 does not come up with a genius way to hack our platform in the future. But I can just assure you that we have tested our platform back and forth before and (shortly) after the launch. We have also asked some of our hacker friends to break the platform while testing for a fat bounty - they have not succeeded :)
Second - being a fork of MakerDAO, we have few years of platform running with 100s of millions of value locked. They had some hickups, but they are dealing with non-stablecoin assets, remember! We are a simpler platform for now (simpler in a good way).
Third, because the liquidation mechanism is turned off and the pricing mechanism is pretty straightforward for the stablecoins, there are simply no obvious ways to exploit the platform (like flash loans).
And no, we do not have a cover up for the stolen funds. Developers of Freeliquid do not earn anything - we are simply using the platform by ourselves and getting profits from our Uniswap fees, while trading the loans from $USDFL :) Setting up such fund would mean taking money from your loans (i.e., by setting up higher Stability Fees - let me explain them).
Q7 : You provide lending service but how the interest rate calculated?
Ans : As for now the interest rate (called Stability Fee) is set to zero for all stablecoins. For one, this has been done to attract users to our platform. The other reason - we wanted to focus on FL reward programs and to start providing liquidity to our pairs.
Namely, Stability Fees are involved in some other mechanisms of our platform (paying dividends in Freeliquid Save, for example) and this would complicate the whole thing in the early months. We want our users just to understand the basics first — there has been already enough confusion between liquidity pools in Freeliquid Borrow and Freeliquid Reward, let's not add to that! :)
But in the future, the community might introduce the interest rate. In that, none of earnings are going into the developers' pockets (just check the smart contracts). Again, this can be done only after the community voting - for example, to provide more utility for $USDFL, since it is used in Freeliquid Save. Maybe users decide that they are happy without the fees - let it be so! The platform is totally solvent without them as well.
Anyway, we will share our ideas on this only later, after we all add more liquidity and grow in general. Do not worry - even in that case, Stability Fees should be very few percent... it will be competitive on the market.
Q8 : As we all know the fee on Ethereum platform is very high. Then why you build on Ethereum blockchain?
Ans: Nothing special here - it is the mostly used ecosystem for such kind of projects, at least for now. A lot of solutions are already present and well tested. Also, most DeFi funds are on Ethereum as well - remember that we accept liquidity pools from Uniswap (and further platforms like Curve that might come later).
But you are right - the fees were insane in the last days. We feel lucky that we might have launched shortly before a new bull run, but it also brings crazy fees. A lot of our contracts are "data costly" and sometimes users had to pay $100 or more just to set up the Vault and take a loan! And then you have to spend almost the same to provide liquidity for Freeliquid Reward.
Sadly, it is just how Ethereum works! Please wait for gas fees to cool down and be careful with the gas price you setting. We do not recommend to decrease the gas limit - it might result in a failed transaction. Often, you see some crazy estimation of the gas fees - it's just our API calculates the "worst" case. When I was setting up the Vault, it first showed be $150 because of the high default gas limit. I paid $30 in the result :)
Q9 : Can you explain to me how can get interest by just providing liquidity without locking into stake?
Ans : This is a suitable question because new users are often missing the main point of Freeliquid - that is, to KEEP your fees from Uniswap (or other platfrom), WHILE getting additional funds. I am not really sure if you mean locking the Uniswap tockens or USDFL-FL pairs, but I hope I will kinda answer both.
Instead of using Freeliquid Borrow, some folks just want to "farm" from FL rewards and simply skip the loan part. They are getting focused on the FL price and thinking that just market buying it is an investment in our project #ApeSzn. Maybe it is, maybe it is not! We advise not to speculate on the $FL price. If you do - always risk manage. The volatility can be insane in the first days, since the supply is rather low (remember, FL are distributed gradually over months, we did only like 10-11% so far).
Anyway, back to your question. Of course, we cannot prevent you to "just" farm our tokens without locking you Uniswap liquidity. But if you do, you keep your fees from Uniswap — you will get them back after covering the loan and getting back the LP tokens. So you can BOTH get interest on your Uniswap investment AND get the FL rewards. Or you can just do one of them. Just do whatever f you want guys - as we said, it's crypto, it's freedom :)
Q10 : Freeliquid allow its users to lock liquidity pools with zero fees and receive loans in USDFL stablecoin, what are the uses of USDFL, what would we do with our loan of USDFL, are you planning to add more use cases?
Ans : All right, I think it will be a good final question. What can you do with your USDFL after you took a loan by locking Uniswap pools?
1) There are liquidity pairs at least to four stablecoins on Uniswap - you can simply exchange $USDFL for USDT, USDC, DAI or USDN. And then do whatever you want :) The liquidity is growing with each day (because of our reward programs), but make sure you do not buy/sell if the price deviates from $1 by too much. Again, it will come back to $1 after someone sees it and basically does an arbitrage on the price difference.
2) In the future, you might be able to lock your USDFL in Freeliquid Save to earn an interest. I mentioned it above - the earnings will come from Stability Fees, if the community decides to go for it.
3) You can participate in FL reward programs that I already explained many times here. All reward pairs are made with $USDFL (either USDFL-FL or USDFL-stablecoin).
4) If you wanna go safe, you can think of other passive income sources with less risk. You can buy stablecoins, again, and open up one more Uniswap pool... or go to Curve Finance and earn interest there as well. It's up to you!
5) Go x100 BitMEX full degen mode and get rekkkt. Haha, just kidding, do not do it guys, unless you're really sure about it :) Remember that you will not get your LP tokens back from Freeliquid until you cover the loan (partially or fully)!
Thanks for answers questions, before leaving, can share all link social media, and where can buy tokens presale all details please
Ans : A lot of good questions, some of them similar, so it was hard to choose. Do not hesitate to ask tough questions to the project - if they are solid, they should take them as well!
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