Introducing Fungify's P2T Farming
A major under-discussed advantage of points-based schemes is the ability to reward more complex behaviors by offloading computation off-chain while also providing flexibility around the logistics of distributing the token itself. On-chain liquidity mining programs are by comparison less secure, less flexible, and more computation/gas constrained.
Recent implementations of points have tended to leverage the opaqueness of the off-chain component, leading to substantial uncertainty around the value of the points themselves. There is widely perceived to be a lack of clarity around how points translate to actual earnings. By having a defined token emission schedule and continuously updating the point to token (P2T) correspondence, we hope to break the trend of nebulousness surrounding point values.
How P2T Farming Operates
P2T Farming is designed to reward users who supply to and borrow from the protocol. Participants earn Cap Points 🍄 which are then converted into FUNG tokens at fixed 7-day intervals, referred to as cultivation periods. The allocation of FUNG is based on a predetermined schedule and corresponds to the points accumulated by users during each cultivation.
Users engaged in both supplying and borrowing assets within the same market will have their base interest rate adjusted based on the net APR of that market. This aims to discourage unproductive resource consumption, promoting efficient asset utilization.
Methods to Earn Cap Points 🍄
Users can collect Caps 🍄 in two ways:
Supplying Assets: By supplying assets to any of Fungify's markets. Including for the first time, NFT Markets where you can supply NFTs in order to earn yield in USDC.
Borrowing Assets: Borrow assets, including NFTs
Earning Rate and Boosts
The base rate for Cap 🍄 accrual is linked to the market's interest APR. The formula is straightforward: the interest rate of a market determines the base rate of caps earned for supplying or borrowing from that market.
Users can increase their points through several boosts:
Borrowing: Engaging in borrowing activities applies a 3x boost to Caps earned.
Size: Size matters, the greater the value of assets supplied or borrowed, the larger the boost, up to 3x. Each $50,000 increment adds a 0.1x boost.
Time: The longer a position is held, the more the points boost, up to 2x. A 0.2x boost is granted for every cultivation period a position is maintained.
Additionally, the program will include a surprise Weekly Bonus feature. Every week, at the start of each cultivation period, a new method to boost your cap count will be revealed.
At the end of each quarter, all token balances become claimable and begin vesting.
Fungify's P2T Farming is will go live on February 15th, 5:00PM UTC , and the Weekly Bonus applies to the latest assets we’ve added to the platform: Sappy Seals and The Honey Jar Honeycombs (Berachain Community Project). Borrowing and lending with Sappy Seals and Honeycombs earns a 2x points bonus. They’ve been given a collateral factor of .3, meaning you can borrow up to 30% against its value and get ETH, USDC, or USDT. We’re excited to be the first pooled lending protocol to support Sappy Seals and Honeycombs.
One more thing:
A separate PvP leaderboard, which tracks the number of NFTs deposited from each NFT collection as well as individual user deposits, will launch shortly. This will be separate from the rewards program…
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