Fuse Network (FUSE)

Fuse was a standalone blockchain toolbox for projects to work on top of. EVM compatible. It pivoted towards being a Polygon zk-L2.

Basics

• Based in: core team in Israel
• Founded in: 28-8-2019
• Mainnet release:
• According to its own blog people can build the following with Fuse (18-9-2020):

1. Payment services
2. Stablecoin based economies
3. Loyalty systems
4. Shared ownership communities
5. DeFi integration

• Not to be confused with the Fuse Protocol created by Rari Capital.

History

Planning to move towards a zkEVM L2 (11-2023). It will happen with the Polygon SDK and take 12 months (18-12-2023).

Audits

• Bug bounty program can be found here up to $25.000 (24-2-2021).
• Had an audit done on its Smart Contract by Zokyo (24-11-2020):

"The audit concluded that our code passes Zokyo’s security requirements. It also confirms that there are no issues that can have an impact on contract security, and that the contract is well-written and is production ready."

Governance

• From their blog (21-1-2021):

"In addition to the validator governance system which dictates how the network functions including consensus and infrastructure, we plan to implement token holder-based voting to further widen decision-making on aspects like token allocation, grants, and product development. UI’s will be implemented for both of these, with validator consensus already being voted on but without a user-friendly interface for the moment."

Token

Token allocation

• From their blog (14-10-2020):

"25 Million FUSE (8.3%): ETOP (Employee Token Ownership Plan) Pool

• These tokens are locked and staked for 4 years. During this period, staking rewards only will be paid out.

40 Million FUSE (13.3%): Early Team, Advisors & Validators

• Eary supporters, team members, and advisors that have been involved with the project since its inception in late 2019.
• These tokens are subject to a 1 year vesting period.

40 Million FUSE (13.3%): Private Allocation + Public Liquidity Release Mesa DEX

• Private tokens were exchanged at $0.06.
• A private token vesting period has been implemented in which 25% of tokens are unlocked every month for 4 months.
• As explained in a previous post, the Public Liquidity Release will take place on 22nd October. For a step-by-step guide on how to take part see here.

65 Million FUSE (21.7%): Dev Locked Fund (4 Years)

• These tokens are locked and will not be released for 4 years.

130 Million FUSE (43.3%): Bootstrap Pool

• These tokens are released over a period of 4 years and used to reward various different activities.
• Fuse Studio: Tokens rewarded to operators that successfully deploy and generate considerable transaction volume on the network. This is designed to incentivize network use.
• Airdrops: Tokens rewarded to community members for engagement with the network through bounty campaigns, governance participation, product testing, and solving Github issues. This is designed to incentivize community involvement and development.
• Stablecoin liquidity providers’ rewards. More on this soon as we announce some big DeFi products that are in the pipeline!

5% yearly inflation in the network is distributed to the network validators."

Utility

• From the docs (4-2021):

"Fuse token is required to be paid to the network to approve transactions. The Fuse network is using the token to create circulation between users that look to validate transactions on the network and validators who invest computing resources and maintain it. Every block created on the Fuse chain is creating new Fuse tokens rewarded to the validators.

1. Validation: Token holders can stake Fuse to become a validator. The minimal staking requirement is 100K. The network is growing, currently there are 50+ validators. (https://health.fuse.io/)
2. Voting: Validators vote on protocol changes with their staked Fuse. Which means validators with higher amounts of Fuse staked can have a bigger vote on network upgrades and governance changes (until phase 2 where delegation is activated)
3. Fees: The Fuse token is the native currency on the Fuse blockchain and is required to pay fees to the network in order to approve transactions.
4. Delegation - Activated Q3 2020: Delegation for token holders will be activated. This will allow any Fuse token holder to delegate their tokens to a validator to earn rewards. Validators compete between themselves to receive Fuse delegated from token holders. Validators with the most Fuse tokens are elected to validate on Fuse."

Stablecoin

• From the Fuse blog (8-9-2022):

"At present, fUSD is backed by the USDC token issued by Circle. To mitigate the risks arising from the exposure to a single stablecoin issuer,, upgrading to fUSD v2 will allow the community to choose a basket of non-algorithmic stablecoins by which fUSD will be backed. Doing this will significantly decrease friction and price impact on trades, especially larger ones. Voltage will craft fUSD v2 so holders can earn fees simply by holding the token."

• FuseDollar was the first in the FuseX suite of stablecoins to be launched (19-2-2021).
• From their blog (21-1-2021):

"Native Fuse Network stable coins — FuseDollar, FuseEuro & FusePound."

Tech

• Docs can be found here.
• Code can be viewed here (13-8-2020).
• Built on: It's own blockchain. It has an ERC version (11-8-2020). Also deployed on BSC.
• Programming language used: Solidity

Transaction Details

• Capacity (TPS):
• Latency: 5 seconds

How it works

• A version of DPoS.

Fee Mechanism

• From the docs (4-2021):

1. "The network charges fees on every transaction that goes to the validators and is capped at 1 cent $ per transaction.
2. While the network has unfilled blocks the cost per transaction will be lower than 1 cent.
3. The fee cost per transaction in Fuse will be adjusted to be a maximum of 1 cent US dollar once the blocks start to fill up. At this stage simple transfer transactions will be moved off-chain."

Upgrades

• A good overview can be read here (26-1-2021).
• over the year 2021 the following developments happened according tot heir year end blog (15-1-2022):

1. "enhanced decentralization of the platform (through the creation of FuseDAO and the partnership with Pocket Network);
2. first centralized exchange listings (including Gate.io, MEXC and Bittrex);
3. the growth of usage of the platform and its native token FUSE;
4. the launches of of new major products and tools (including Fuse Cash, Fuse-Binance Smart Chain bridge, etc.);
5. continued progress of payment-focused ecosystem projects (including GoodDollar, Peepl and Kolektivo);
6. fast expansion of the DeFi ecosystem;
7. the emergence of NFTs on Fuse, and
8. an array of major partnerships and integrations with leading players in the crypto/blockchain space."

Staking

• Has activated delegation on their DPOS (11-11-2020).
• From the docs (4-2021):

"5% inflation in the network is distributed between the validators. Each cycle (A cycle is all transactions conducted in 48 hours) the validators with the highest amount of Fuse tokens staked will split the rewards based on their stake."

Validator Stats

• Has 38 'active' validators according to Fuse Explorer(13-7-2021).

Liquidity Mining

• From their blog (21-1-2021):

"More liquidity provider incentive programs will be launched over the coming weeks."

Scaling

• Fuse is considering between Arbitrum and Optimism for its L2 (3-5-2022).
• From this thread (5-1-2022):

"In the future, Fuse will be implementing ZK rollups to scale their network which will be known as the Flutter Later 2 Payments (FL2P)."

• From their blog (21-1-2021):

"Research has begun in order to look at how solutions like ZK roll-ups could be used. The benefit of layer 2 scaling solutions is that they not only improve throughput but they also provide improved privacy and interoperability with other layer 2 integrations."

Interoperability

• The Fuse team strongly believes in the future of interoperability and is running a multichain bridge currently connecting it to Ethereum and BSC.
• From its docs (2020):

"It's anchored to Ethereum using a bridge which allows any token to freely move between Ethereum and the Fuse-chain. A Token is minted on Ethereum and then moved to the Fuse-chain, where it gets access to a wide range of features and business plugins that brings it to life."

• Integrated with Elk Finance (13-12-2021) to move FUSE to different chains. A similar integration happened with ChainPort (17-12-2021). Got added to Allbridge (29-1-2022). Multichain integrated it as well in their bridge (28-2-2022).

Oracle Method

• Oddin's security oracles will be integrated (25-8-2022).
• DIA got integrated (21-2-2022).
• From their blog (2-3-2021):

"Our Chainlink Proof of Reserve integration will bring secure, reliable, and efficient minting and auditing of Fuse Network’s collateralized stable coin FuseDollar (fUSD), ensuring it is 100% backed by USD Coin (USDC) deposited in a dedicated Ethereum smart contract."

• From their blog (21-1-2021):

"Partnerships and integrations that ensure connectivity and coherence with the rest of the DeFi ecosystem on Ethereum and other layer 1s are also a priority. These include price feed oracles that allow for improved AMM functionality in FuseSwap, fixed transaction fee targeting on the network, and proof of reserves for FuseX’s asset-backed stable coin products.

Their Other Projects

Fuse Studio

• From its docs (2020):

"The Fuse Studio allows users to easily launch and operate new communities, with a built in contract store that allows the easy launch of new features and integrated services - fiat on-ramps, business management plugins, community management functionality and much more."

FuseSwap

• Got incorporated into Voltage Finance.
• From their blog (21-1-2021):

"Fuse’s native DEX. Protocol change decisions are currently made by the core Fuse team. As trading activity grows on the platform, users and liquidity providers gain a more significant stake in its success. We are researching various voting models to make governance more inclusive and potentially move to full decentralization."

Roadmap

• Can be found here (1-1-2020). Update (26-1-2021).
• From its weekly update (20-9-2020):

"Mark explains the importance of focusing on the long-tail acquisition of users of the open-source technology with tangible goals of reaching 1 million USD locked, 1 million transactions per day with 1000 launched micro-economies, and reaching parts of the world with undeveloped financial infrastructure within the next 2–3 years."

• Is looking into burning mechanisms and reducing its block reward (26-1-2021).
• From the docs (4-2021):

"A fixed inflation rate also helps with stabilization of the token price. At phase 2 of the network an upgrade to a differential inflation schedule will be proposed and voted on by the validators to optimize the inflation/fee price policy."

Usage

• Just passed half a million tx (12-8-2020).
• Done over 12.5M tx (3-7-2021).

Projects that use or built on it

• Beefy Finance; will be deployed on Fuse (11-1-2022).
• The Digital Rand (8-2020)
• GoodDollar, digital basic income project, is ranked 6th among dApps by the number of daily users according to Dapp.com (13-7-2021)
• Flambu; "A decentralized sharing economy powered by Fuse. It features a mobile app and a two-token model for enhanced peer-to-peer renting of anything." (7-9-2021)
• Kolektivo; a project aimed at developing regenerative economies in Curaçao; soft-launched the CuraDAI stablecoin and mobile app
• MintGate; got integrated by Fuse (24-2-2021)
• Rupiah Token
• Comunitaria (formerly Wikibank); platform for better targeting donations to poor families (6-7-2020).

Competition

• Interoperable blockchains. L1s. Payment systems like Paypal.

Team, Funding, Partners

Team

• Full team can be found here (3-7-2021).
• Mark Smargon; CEO

Funding

• Is listed as one of the backers of Unbound (30-1-2021).

Partners 

• Fuse is getting its own dedicated node via GetBlock with which it is partnered (19-8-2020).
• Is partnered with Orion Protocol (10-2021).
• Partnered with and will integrate Pocket Network (25-2-2021). From the Fuse blog (28-9-2021): "The Fuse Foundation will exchange 750,000 FUSE for 250,000 POKT to broaden access to Pocket’s RPC call relay service for the Fuse ecosystem."
• Is one of the announced partners of Unmarshal during their first months (5-4-2021).
• Fuse and Krystal will work together (20-4-2021) to enable the integration of Fuse’s native decentralized exchange (DEX) FuseSwap into the DEX aggregator on Krystal.
• Had a tokenswap with Peepl (16-9-2022):

"According to the terms of the token swap, Fuse will be entitled to 1% of the PPL token supply once the token has been emitted. In exchange, Peepl has received 750,000 FUSE tokens."

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