# Fusion Protocol on Plasma/XPL — Official Launch

**Published by:** [FusionXPL](https://paragraph.com/@fusionxpl/)
**Published on:** 2025-10-20
**Categories:** plasma, xpl, fusion, usdt0, stablecoin
**URL:** https://paragraph.com/@fusionxpl/fusion-protocol-on-plasma

## Content

Fusion is a dual-peg money layer launched by 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 hoursBoardroom 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 CryptoBacked by: FrogsVault (initial liquidity + treasury runway) Why Fusion? (What’s launching & why now)Plasma needs two clean primitives:a yielding USDT0 rail for payments/liquidity (ARC), anda 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. Tokenomics Overview LUX — XPL-Aligned with Mint Expansions and Daily RebaseRole: 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 ARC (Fusion USDT0) — Partially-Collateralized USDT0 StablePeg: 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. FUSN (FUSION) — Share TokenFUSN 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 / NotesLiquidity Mining35%35,000~36 months, bi-weekly decay; emissions stop when bucket emptiesFrogsVault / Treasury & POL30%30,00024-month linear; POL seeding, emergency ops, buybacksTeam (Dev & Marketing)15%15,00024-month linear; multisig-guardedEcosystem / Partnerships / Grants5%5,00012-month streaming; milestone releasesRedemption & Stability Reserve10%10,000Funds ARC redemption leg; replenished via buybacksCommunity / Airdrops2.5%2,500Programmatic; 6-month vest on larger grantsInitial Liquidity & MM2.5%2,500Seed liquidity; lock/vest as appropriateTotal100%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 & BuybacksARC 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. Phased Launch (with objective gates)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 2ARC/USDT0 POL ≥ $50–100k, and30m TWAP deviation ≤ 20 bps, and/or24h volume/TVL ≥ 8–12%.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 3FUSN/XPL POL ≥ $20–30k, andARC/USDT0 peg within ±50 bps for 48h.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. Pool Parameters (starter defaults)ARC/USDT0 — Curve Stableswap-NGA (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 BoardroomFUSN/XPL — Curve Crypto (2-coin)Fee: factory default · Seed: $20–50kNote: set price_scale to seed valuation; allow EMA to adaptLUX/XPL — Curve Crypto (2-coin)Mint-based expansion cap: ~1–1.5%/epoch; above-peg defined as ≥ 0.99 XPLDaily Rebase: ±1% / −2% if outside 0.98–1.18 bandOracle: 45-min TWAP window · Seed: $20–50k near 1 XPL reference Rewards & Emissions (initial suggestion)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). Risk Controls (simple & strict)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. How to Participate (90-second guide)Provide liquidity Add to ARC/USDT0, FUSN/XPL, or LUX/XPL on Curve (as each pool goes live).Stake LP tokens Deposit ERC-20 LPs into MasterChef to farm FUSN.Stake FUSN → Boardroom Get ARC every epoch, plus LUX during above-peg (≥ 0.99 XPL) epochs.Track it all Use the dashboard for peg deviation, α, Aave APY, epoch countdowns, and emissions runway. FAQ (fast answers)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. Transparency & OpsDashboard: 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. LegalThis 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. LinksSite: https://www.fusionxpl.fiApp / Docs / Status: TBA at TGEBy: Lume.Finance (FrogsClub) — FrogsVault-backed launch

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