# Fusion Protocol on Plasma/XPL — Official Launch

By [FusionXPL](https://paragraph.com/@fusionxpl) · 2025-10-20

plasma, xpl, fusion, usdt0, stablecoin

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**Fusion** is a dual-peg money layer launched by [**Lume.Finance**](http://Lume.Finance) **(FrogsClub)** and treasury-backed by **FrogsVault**.  
We combine an XPL tracker (**LUX**) that **mints expansion** when above its peg (and performs a **daily rebase**), a partially-collateralized USDT0 stable (**ARC**), and a simple **Boardroom** where **FUSION** stakers are paid **every epoch (6h)**.

*   **Chain:** Plasma (XPL)
    
*   **Tokens:** **LUX** (mint-based expansion when above peg; **daily rebase**), **ARC** (partial-collateral, peg **1.00 USDT0**), **FUSION** (share)
    
*   **Epoch:** 6 hours
    
*   **Boardroom cadence:** **every epoch (6h)** distribute:
    
    *   **ARC** (from buybacks funded by on-chain yield, e.g., Aave USDT0)
        
    *   **LUX** (**only when LUX ≥ 0.99 XPL**, per **LUX Expansion Allocation**)
        
*   **DEX venue:** **Curve** (ERC-20 LPs; no NFTs) — ARC/USDT0 **Stableswap**, LUX/XPL **Crypto**, FUSION/XPL **Crypto**
    
*   **Backed by:** **FrogsVault** (initial liquidity + treasury runway) ![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f438.png)
    

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f52d.png) **Why Fusion? (What’s launching & why now)**
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Plasma needs two clean primitives:

1.  a **yielding USDT0 rail** for payments/liquidity (**ARC**), and
    
2.  a **chain-aligned asset** that tracks **XPL** without NFT LPs or wrappers (**LUX**).
    

**Fusion** delivers both, plus a **Boardroom** that pays out **every epoch**, giving holders a steady rhythm:  
**USDT0 yield in → ARC buybacks → ARC to stakers**, and **when LUX ≥ 0.99 → mint LUX → LUX to stakers**.  
One venue (Curve), fungible LPs, and a vault-anchored treasury from **FrogsClub**. ![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/2728.png)

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f9e9.png) **Tokenomics Overview**
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### ![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f4a0.png) **LUX — XPL-Aligned with Mint Expansions and Daily Rebase**

*   **Role:** Elastic XPL tracker with two stabilization tools.
    
*   **Mint expansions (epochly):** when **TWAP(LUX/XPL) ≥ 0.99**, protocol **mints LUX** per epoch based on deviation (initial cap ~**1–1.5% of supply/epoch**).
    
*   **Daily Rebase (once per day):** automatically adjusts total supply **up to +1%** (expansion) / **−2%** (contraction) **if TWAP is outside 0.98–1.08 XPL**.
    
*   **Allocation of newly minted LUX (when above peg):**
    
    *   **50%** → **Boardroom Rewards** (paid this epoch)
        
    *   **40%** → **FrogsClub Vault** (treasury growth & POL)
        
    *   **10%** → **Dev & Marketing**
        

### ![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f48e.png) **ARC (Fusion USDT0) — Partially-Collateralized USDT0 Stable**

*   **Peg:** 1.00 USDT0.
    
*   **Mint:** deposit **α USDT0** + burn **(1−α)** worth of **FUSION**.
    
*   **Redeem:** burn **ARC** → receive **α USDT0** + **(1−α) FUSION** (or from a redemption buffer).
    
*   **Collateral leg:** USDT0 is **staked on Aave** to earn on-chain yield, used for **ARC buybacks** each epoch.
    

### ![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f396-fe0f.png) **FUSN (FUSION) — Share Token**

**FUSN** is the value & coordination token of Fusion Protocol. Holders:

*   **Stake in the Boardroom** to receive **ARC every epoch (6h)** and **LUX** during **above-peg (≥ 0.99 XPL)** epochs.
    
*   **Back ARC minting:** each ARC mint burns FUSN for the `(1−α)` leg → structural demand sink.
    
*   **Bootstrap liquidity:** MasterChef emissions reward LPs (Curve LP **ERC-20s**, not NFTs).
    
*   **Govern (phased-in):** starts with multisig + timelock; can move to Snapshot/on-chain later.
    

**Max supply:** **100,000 FUSN** (hard-capped)

**Bucket**

**%**

**Tokens (FUSN)**

**Vesting / Notes**

Liquidity Mining

35%

35,000

~36 months, bi-weekly decay; emissions stop when bucket empties

FrogsVault / Treasury & POL

30%

30,000

24-month linear; POL seeding, emergency ops, buybacks

Team (Dev & Marketing)

15%

15,000

24-month linear; multisig-guarded

Ecosystem / Partnerships / Grants

5%

5,000

12-month streaming; milestone releases

Redemption & Stability Reserve

10%

10,000

Funds ARC redemption leg; replenished via buybacks

Community / Airdrops

2.5%

2,500

Programmatic; 6-month vest on larger grants

Initial Liquidity & MM

2.5%

2,500

Seed liquidity; lock/vest as appropriate

**Total**

**100%**

**100,000**

  

> **Genesis mint:** only **non-emissions buckets** mint at TGE; the **35% mining bucket** remains unminted and is released via MasterChef on schedule.

#### **Emissions (MasterChef)**

*   **Emission bucket:** 35,000 FUSN (maximum).
    
*   **Decay:** **2% weekly** (governable).
    
*   **Initial weights (first 4 weeks):** ARC/USDT0 LP **50%**, FUSN/XPL LP **30%**, LUX/XPL LP **20%** (starts once LUX/XPL pool is live).
    

#### **Sinks & Buybacks**

*   **ARC mint burn:** `(1−α)` worth of FUSN is burned per ARC mint → enduring sink.
    
*   **Buyback & burn/lock:** PSM & fee revenues buy FUSN to **burn** or **lock** (anti-dilution).
    
*   **Redemption Reserve:** ARC redeems pay the FUSN leg **from reserve**, preserving the hard cap.
    

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f5fa-fe0f.png) **Phased Launch (with objective gates)**
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### **Phase 1 — ARC First (Genesis)**

*   **ARC mint on:** **α = 1.00** (USDT0-only) with small fee bands.
    
*   **Pool:** **ARC/USDT0** (Curve Stableswap-NG).
    
*   **Seed:** FrogsVault POL (target **$50–100k** total depth).
    
*   **Rewards:** **FUSN** emissions for **ARC/USDT0 LP** (MasterChef; ERC-20 LP).
    
*   **Aave:** deposit a guarded portion of ARC’s USDT0 collateral; yield accrues.
    
*   **Boardroom:** **ON after ~48h** — **every epoch (6h)** pays **ARC** (buybacks). _(No LUX yet.)_
    

**Gate → Phase 2**

*   ARC/USDT0 **POL ≥ $50–100k**, and
    
*   30m **TWAP deviation ≤ 20 bps**, and/or
    
*   **24h volume/TVL ≥ 8–12%**.
    

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### **Phase 2 — Governance & Price Discovery (FUSN)**

*   **Pool:** **FUSN/XPL** (Curve Crypto 2-coin), seed **$20–50k**.
    
*   **Rewards:** **FUSN** emissions for **FUSN/XPL LP** (MasterChef).
    
*   **Boardroom:** continues **every epoch** — **ARC** only (until LUX is live).
    
*   **Comms:** launch peg dashboard (ARC deviation, α, Aave APY, epoch payout timer).
    

**Gate → Phase 3**

*   FUSN/XPL **POL ≥ $20–30k**, and
    
*   ARC/USDT0 peg **within ±50 bps** for **48h**.
    

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### **Phase 3 — LUX Expansion (Above-Peg Minting + Daily Rebase active)**

*   **Pool:** **LUX/XPL** (Curve Crypto 2-coin), seed **$20–50k**.
    
*   **Mint expansions (epochly):** when **TWAP(LUX/XPL) ≥ 0.99**, mint LUX per epoch (cap ~**1–1.5%** of supply).
    
*   **Daily Rebase (1×/day):** if TWAP is **outside 0.98–1.18 XPL**, apply up to **+1%** expansion / **−2%** contraction.
    
*   **Boardroom:** **every epoch** now pays **ARC + LUX** (LUX only if ≥ 0.99).
    
*   **Rewards:** add **LUX/XPL LP** to MasterChef.
    

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f9ea.png) **Pool Parameters (starter defaults)**
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**ARC/USDT0 — Curve Stableswap-NG**

*   **A (amp):** 100–150 · **Fee:** 0.02–0.04%
    
*   **Oracle:** EMA half-life ~**30–45 min** (`ma_exp_time`)
    
*   **Ops:** Slippage guard 0.2–0.3% on USDT0→ARC buys for Boardroom
    

**FUSN/XPL — Curve Crypto (2-coin)**

*   **Fee:** factory default · **Seed:** $20–50k
    
*   **Note:** set `price_scale` to seed valuation; allow EMA to adapt
    

**LUX/XPL — Curve Crypto (2-coin)**

*   **Mint-based expansion cap:** ~**1–1.5%/epoch**; **above-peg defined as ≥ 0.99 XPL**
    
*   **Daily Rebase:** ±1% / −2% if outside **0.98–1.18** band
    
*   **Oracle:** 45-min TWAP window · **Seed:** $20–50k near 1 XPL reference
    

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f381.png) **Rewards & Emissions (initial suggestion)**
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*   **MasterChef weights (Weeks 1–4):**
    
    *   ARC/USDT0 LP — **50%**
        
    *   FUSN/XPL LP — **30%**
        
    *   LUX/XPL LP — **20%** (begins in Phase 3)
        
*   **Decay:** total emissions **\-10–15%/week** (preserve runway).
    
*   **Boardroom (every epoch):**
    
    *   **ARC** from USDT0 yield buybacks (Aave → yield → buy ARC → distribute).
        
    *   **LUX** only when **LUX ≥ 0.99 XPL**, per **50/40/10** allocation (Boardroom / FrogsVault / Dev+Mkt).
        

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f6e1-fe0f.png) **Risk Controls (simple & strict)**
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*   **ARC controller:** raise **α** faster on discount (e.g., +1% step) and lower slowly on premium (−0.25% step); daily cap on change.
    
*   **Aave guards:** deposit cap ≤ **70%** of ARC’s USDT0 collateral; **utilization > 90%** or **APY < floor** → pause top-ups; keep **≥ 3 days** redemption buffer.
    
*   **Expansion & rebase pause:** if oracle spread (Curve EMA vs. secondary) **\> 1%**, pause LUX **expansions** for one epoch and **rebase** for one cycle.
    
*   **Circuit breakers:** widen PSM fees + redemption queues if ARC deviates beyond bands; temporary emission boosts to ARC/USDT0 LP if needed.
    

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f4c8.png) **How to Participate (90-second guide)**
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1.  **Provide liquidity**  
    Add to **ARC/USDT0**, **FUSN/XPL**, or **LUX/XPL** on Curve (as each pool goes live).
    
2.  **Stake LP tokens**  
    Deposit ERC-20 LPs into **MasterChef** to farm **FUSN**.
    
3.  **Stake FUSN → Boardroom**  
    Get **ARC** **every epoch**, plus **LUX** during above-peg (≥ 0.99 XPL) epochs.
    
4.  **Track it all**  
    Use the **dashboard** for peg deviation, α, Aave APY, epoch countdowns, and emissions runway.
    

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/2753.png) **FAQ (fast answers)**
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*   **Why Curve?** ERC-20 LPs (no NFTs), efficient stables, robust crypto pools, and on-chain EMAs.
    
*   **Do I need NFTs?** Nope. All pools here mint **fungible LP tokens** you can stake in MasterChef.
    
*   **How often do I get paid?** **Every epoch (6 hours)** — ARC always; LUX only if **≥ 0.99 XPL**.
    
*   **What if LUX is below 0.99?** No LUX minted that epoch; ARC payouts continue as usual.
    
*   **Who funds the treasury?** **FrogsVault** backs initial liquidity/runway and receives **40%** of LUX expansions (when above peg) to grow POL.
    

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f50d.png) **Transparency & Ops**
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*   **Dashboard:** ARC TWAP deviation (bps), **α** (now & 24h), Aave APY/utilization & 7/30d realized yield, FUSN staked, ARC+LUX paid per epoch, pool depths, emissions runway.
    
*   **Reports:** weekly peg/treasury updates; parameter changes via timelock; public post-mortems if any pauses trigger.
    

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/26a0-fe0f.png) **Legal**
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This announcement is informational and subject to change; it is **not** an offer or solicitation. Parameters, allocations, and schedules are governed on-chain and may be updated by governance/multisig with timelocks.

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![](https://cdn.jsdelivr.net/npm/emoji-datasource-apple/img/apple/64/1f517.png) **Links**
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*   **Site:** [https://www.fusionxpl.fi](https://www.fusionxpl.fi)
    
*   **App / Docs / Status:** TBA at TGE
    
*   **By:** [**Lume.Finance**](http://Lume.Finance) **(FrogsClub)** — **FrogsVault-backed launch**

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*Originally published on [FusionXPL](https://paragraph.com/@fusionxpl/fusion-protocol-on-plasma)*