ARC (Fusion USDT0) is a Frax-style stablecoin pegged to 1.00 USDT0. It keeps a tight peg using:

• a dynamic collateral ratio (CR = α) in USDT0, and

• a share token (FUSN) for the algorithmic leg (1−α).

Users can always mint and redeem around $1 of value with the split between USDT0 and FUSN adapting over time. This is the fractional-algorithmic design that made Frax V1 capital-efficient without relying on supply-only rebases. ARC is not a TOM/Ample-style token; the peg is enforced by mint/redeem arbitrage and a moving α—a banking-style balance-sheet controller.

2) How Mint & Redeem Work (with simple numbers)

Mint (at current CR = α)

To mint 1 ARC, deposit:

• α USDT0, and

• (1−α) worth of FUSN (burned).

Example: If α = 0.98, you deposit $0.98 USDT0 + $0.02 in FUSN to mint 1 ARC.

Redeem (always for ~$1 of value)

To redeem 1 ARC, you receive:

• α USDT0, and

• (1−α) worth of newly-minted FUSN.

  (Optionally, the protocol can atomically swap the FUSN leg to USDT0 and return ~$1 in collateral; economically equivalent.)

Example: If α = 0.90, a redeemer gets $0.90 USDT0 + $0.10 in FUSN per ARC.

ARC is redeemable for $1 of value, not “one unit of a token.” That keeps arbitrage clean even if the collateral drifts slightly from $1.

2b) Arbitrage Mechanics — how the peg is enforced

If ARC trades above $1 (premium)

Trade: Mint at $1 of value → Sell >$1 → Keep the spread

• Cost per ARC: α·USDT0 + (1−α)·FUSN (=$1 total)

• Sell price: P_market > 1.00

• Edge per ARC: P_market − 1.00 − fees − slippage

Example: ARC at $1.006, α=0.96 ⇒ Mint at $1.00, sell $1.006; after costs ~0.35–0.45% net. Many such mints expand supply and collapse the premium back toward $1.

If ARC trades below $1 (discount)

Trade: Buy < $1 → Redeem at $1 value (USDT0+FUSN) → Convert FUSN leg → Keep the spread

• Edge per ARC: 1.00 − P_market − fees − slippage − FUSN→USDT0 conversion cost

Example: ARC at $0.992, α=0.92 ⇒ Buy $0.992, redeem to $0.92 USDT0 + $0.08 FUSN; swap the FUSN leg. After costs ~0.3–0.5% net. Redemptions reduce supply and lift price back toward $1.

Why it works:

• Premiums incentivize mint→sell, increasing supply until price normalizes.

• Discounts incentivize buy→redeem, reducing supply until price normalizes.

• α adjusts with sustained deviations (see §4), letting the market “vote” on the backing it demands while preserving $1 redeemability.

3) Why this is capital-efficient and safe

Capital efficiency

• When demand is strong and ARC trades at/above $1, the controller can lower α (de-collateralize). New ARC requires less USDT0 and more FUSN, raising monetary efficiency while maintaining the $1 target.

• A portion of the USDT0 collateral can be deployed (e.g., on Aave) to earn on-chain yield—protocol revenue that supports buybacks and operations.

Safety & resilience

• If ARC trades below $1, the controller raises α (re-collateralize), so redemptions return more USDT0 and less FUSN, strengthening backing and confidence.

• The Growth Ratio (ARC supply × $1 / FUSN market cap) indicates how much “shock” the system can absorb with reasonable FUSN dilution—lower is safer.

• Fast, reliable redemption keeps ARC from drifting below the value of reserves.

4) Controller Policy (intuition)

• De-collateralize: if ARC > $1 over a sustained window, lower α by a small step (e.g., 0.25–1.00 bps per interval; configurable).

• Re-collateralize: if ARC < $1, raise α by a step (symmetric or faster than de-collateralization).

• Equilibrium: if ARC ≈ $1, hold α steady.

Policy knobs (governable bounds):

• Step size per interval, minimum/maximum α, observation windows, atomic swap toggles for redemptions, and daily/weekly caps on α movement.

5) Where FUSN fits

FUSN is the volatile, value-accrual token (like FXS in Frax):

• As ARC demand grows and α falls, more FUSN is used in mints (and/or burned), creating structural demand linked to ARC growth.

• A stronger FUSN market cap improves stability (better capacity to absorb redemptions and shocks).

• Protocol revenues (e.g., PSM/fees) can be routed to buybacks or reserves to mitigate dilution and align incentives.

6) Collateral yield → the Fusion flywheel

Collateral (USDT0) can be strategically deposited into whitelisted venues (e.g., Aave) to generate yield. Fusion routes this revenue to:

• ARC buybacks and peg support, and

• programmatic distributions (e.g., Boardroom policies), closing the loop between use, stability, and value accrual.

7) Advantages vs. TOM-style designs

• $1 mint/redeem with dynamic α → peg is enforced by arbitrage, not by hoping supply rebases find demand.

• Direct redeemability + re-collateralization provide downside defenses missing in many purely algorithmic models.

• Collateral yield adds a sustainable revenue source to reinforce the peg and fund operations.

8) How to use ARC (user journey)

1. Mint ARC when you want USDT0-par exposure with protocol yield support.

2. Hold or LP ARC/USDT0 for low-volatility yield opportunities.

3. Arb premium/discounts via the mint/sell or buy/redeem loops.

4. Redeem ARC at ~$1 value whenever you need to exit; the mix of USDT0 vs. FUSN depends on α at that time.

9) Risks & mitigations

• Smart contract & market risk: Audits, timelocks, and conservative parameter bounds help, but cannot remove risk.

• Liquidity risk: Deep, incentivized ARC/USDT0 pools reduce slippage and improve arb reliability.

• Oracle/ops risk: Use robust TWAPs and circuit breakers; publish weekly parameter reports.

• Model risk: Cap α step sizes, maintain reserves, and monitor the Growth Ratio to avoid over-extension.

10) Quick glossary

• Collateral Ratio (CR = α): Portion of each ARC backed by USDT0 (e.g., α=0.97 → $0.97 USDT0 + $0.03 FUSN per ARC).

• Algorithmic Ratio (AR = 1−α): Portion backed by FUSN value.

• De-collateralize / Re-collateralize: Lower/raise α based on persistent price deviations around $1.

• Growth Ratio: ARC supply (×$1) divided by FUSN market cap; lower is safer.

11) Summary (TL;DR)

• ARC (Fusion USDT0) implements the Frax V1 mint/redeem + dynamic α model.

• Users can always mint and redeem around $1 of value; α moves with market signals.

• Arbitrage (mint→sell on premium, buy→redeem on discount) pulls price to peg.

• Capital-efficient by design and defensive when stressed via re-collateralization.

• Collateral yield reinforces the peg and funds the protocol flywheel.

ARC is Frax-style by construction—not a TOM fork—delivering peg reliability, capital efficiency, and a clear path to sustainable growth.

• ARC (Fusion USDT0): a USDT0-pegged stable using partial collateral and on-chain yield, and

• FUSN (FUSION): the share token used to incentivize liquidity and reward participants.

You can mint ARC, provide liquidity, and stake LP tokens to start earning FUSN now.

• App: https://www.fusionxpl.fi/

• Mint ARC (Fusion USDT0): https://www.fusionxpl.fi/mint

• Earn (Provide LP & Farm): https://www.fusionxpl.fi/earn

What’s Live Today

• ARC (Fusion USDT0) minting via the Mint page.

• Liquidity programs for:

  • ARC/USDT0

  • FUSN/WXPL

• FUSN rewards for staked LP positions on the Earn page.

• Displayed APRs (currently up to ~2,600%) are variable and reflect current incentives, liquidity, and trading activity.

Launch Promo — PSM Fee (Earns)

• Week 1: 0% PSM fee on Earns (launch window).

• After Week 1: 30% PSM fee on Earns applies (standard policy).

  This fee supports protocol operations, buybacks, and stability reserves.

Quick Start

1. Mint ARC (Fusion USDT0).

2. Provide liquidity in ARC/USDT0 and/or FUSN/WXPL.

3. Stake the LP tokens on the Earn page to farm FUSN.

Token Addresses (Add to Wallet)

• ARC (Fusion USDT0): 0x8F273EC84Dd87F97E325E14f7FaE0C4848bE2622

• FUSN (FUSION): 0x6eC86064c434Fa56c64Bf44a8f7FE5Ed45c1FD27

• Network: Plasma (XPL)

Why ARC (Fusion USDT0)?

ARC targets 1.00 USDT0 using a partial-collateral mechanism (α) combined with on-chain yield. A portion of protocol revenues is routed into ARC buybacks, reinforcing the peg and funding programmatic distributions.

Why FUSN?

FUSN aligns incentives across LPs and long-term participants:

• LPs earn FUSN for contributing depth and tight spreads.

• Stakers gain exposure to protocol growth via ongoing emissions and programmatic distributions.

• Over time, governance may expand to include additional parameters and program upgrades.

Risk & Disclosure

• APRs are variable and can change materially as incentives, liquidity, and volume shift.

• Smart contract, market, and peg risks exist. Do your own research.

• This post is not investment advice.

Support

If you need help, please use the support channel in our Discord or the help link inside the app.

• 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)

Why Fusion? (What’s launching & why now)

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.

Tokenomics Overview

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

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.

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)

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.

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 2

• ARC/USDT0 POL ≥ $50–100k, and

• 30m TWAP deviation ≤ 20 bps, and/or

• 24h 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 3

• FUSN/XPL POL ≥ $20–30k, and

• ARC/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-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

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)

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.

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 & Ops

• 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.

Legal

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.

Links

• Site: https://www.fusionxpl.fi

• App / Docs / Status: TBA at TGE

• By: Lume.Finance (FrogsClub) — FrogsVault-backed launch