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Passive Income Opportunities in Flare


brianwalden
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2 hours ago, brianwalden said:

Flare Mutual - Flare Finance is going to be doing distributed insurance. I have no idea how this works - maybe @KarmaCoverage can chime in.

They are copying Nexus Mutual methods, which I can see sort of working, but leaves the door open to price fluctuations impacting coverage.

I spoke to Flare Finance guys about this and gave them some basic thoughts, but that was several months ago and I dont remember exactly what my points were.

My conclusion was, this may work for now, but definitely leaves room for improvement. 

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5 hours ago, brianwalden said:

I think that because the FLR will no longer be in your wallet but in the collateral pool, you won't get to use it to vote for FTSO providers. So you'll have to weigh if you think the return will be higher by keeping your FLR and voting with it or by using it to collateralize F-assets.

Unless there's been an update to this Flare Network overview from last year, we should be able to do both. From the webpage linked above:

"The mechanism also allows SDA’s such as FXRP to delegate Spark votes back to the ultimate owner who can then re-delegate those votes further to entities he wants to vote on his behalf. So if Bob has 5000 Spark tokens in the FXRP application, it will delegate the votes from those tokens to an address specified by Bob. If Bob wants a dedicated data provider to contribute to the FTSO on his behalf, Bob can then re-delegate his votes for the FTSO to the data provider. Importantly this means that Bob doesn’t have to choose between earning Spark by providing collateral to the FXRP application and potentially earning the reward from the FTSO, he can do both."

Hopefully this is still accurate (and I'm understanding correctly).

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8 hours ago, brianwalden said:

3) Minting F-assets - You will be able to give your FLR to an agent for them to use to mint more F-assets in exchange for a cut of the transaction fees they earn from converting to and from F-assets. There are risks in doing this because agents can be penalized and lose funds if they don't do their jobs. I suspect the system will be setup to limit the risk to ordinary people who are just putting funds into the collateral pool as much as possible, but we have to wait for the details. I think that because the FLR will no longer be in your wallet but in the collateral pool, you won't get to use it to vote for FTSO providers. So you'll have to weigh if you think the return will be higher by keeping your FLR and voting with it or by using it to collateralize F-assets.

On this part we know little so far, though how to mint F-assets from the original asset (e.g., XRP) is a little clearer. According to the information available on Youtube, we will first get XRP from the agent and then can convert it to FXRP, and it is prospected that rewards from F-assets will be higher than those from delegating the FLR votes to FTSO. If so, this avenue is worth considering especially for those who have problems in converting XRP to FXRP due to the tax. 

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6 hours ago, LaBelleSaison said:

On this part we know little so far, though how to mint F-assets from the original asset (e.g., XRP) is a little clearer. According to the information available on Youtube, we will first get XRP from the agent and then can convert it to FXRP, and it is prospected that rewards from F-assets will be higher than those from delegating the FLR votes to FTSO. If so, this avenue is worth considering especially for those who have problems in converting XRP to FXRP due to the tax. 

The tax question has been on the top of my mind for a while and here's how Cointracker sees it - https://www.cointracker.io/blog/defi-yield-farming-crypto-tax-guide

Effectively, they say it is reasonable to have the default to be not-taxable because the intent behind wrapping is not disposition. 

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2 hours ago, Ripley said:

The tax question has been on the top of my mind for a while and here's how Cointracker sees it - https://www.cointracker.io/blog/defi-yield-farming-crypto-tax-guide

Effectively, they say it is reasonable to have the default to be not-taxable because the intent behind wrapping is not disposition. 

First, it's crazy that there's no IRS position on this stuff. The IRS is basically telling everyone to interpret the rules in their own way and they'll let you know after the fact if they disagree with you. That violates the basic principles of rule of law.

I agree with you on the argument that wrapped assets, where your asset is locked up so that your can receive a token representing it on a different network, isn't a sale and therefore isn't taxable.

I originally thought the same thinking would apply to F-assets, but the more I learn about them, the more I think it will be taxable. Flare has explicitly created a system where the native asset isn't held in custody because that creates trust issues as well as regulatory issues in many jurisdictions. But in doing so they've created a system where you're essentially trading one token for another. After the trade both parties now own the opposite coin and are free to do whatever they want with it. No one is holding anything in custody for the other person. I think this is a trade and is taxable.

But don't go by what I think. Flare has said they will be issuing tax guidance (while being explicit that they are not giving tax advice). I assume this will come out prior to launch. I will follow what they say.

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4 hours ago, Seoulite said:

Just saw this, what do you guys think?

 

Thanks. I know Trustline has also said that they were working with Flare to see if people could still get their rewards. I think this confirms that we can expect that to happen. I will update my post to reflect that you should still receive your rewards even while using these services.

If you parse Flare's statement carefully, it looks like the rewards do in fact go to the wallet holding the asset. Flare expects that Dapps will in turn give those rewards to the people putting up the assets that earned the rewards, but it doesn't sound like it's going to be enforced on a protocol level.

I wonder if Flare will also take a position on whether the rewards should be paid in FLR, same as they're received, or if these Dapps can pay out the equivalent value in their native tokens (AUR and TCN for Trustline, YFLR and YFIN for Flare Finance).

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I was just reading the Flare Finance white paper. I don't think YFLR is pegged to FLR. At least it doesn't say anything about that. I think I thought it was because of the name and because it will originally have the same supply as FLR. But FLR is inflationary, and YFLR has a fixed supply so I don't see how it could be pegged.

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53 minutes ago, brianwalden said:

I was just reading the Flare Finance white paper. I don't think YFLR is pegged to FLR. At least it doesn't say anything about that. I think I thought it was because of the name and because it will originally have the same supply as FLR. But FLR is inflationary, and YFLR has a fixed supply so I don't see how it could be pegged.

Yeah I don't think the intention was ever that FLR and YFLR would be pegged. As has come up a few times, there are issues with Flare Finance using the word Flare in everything they do, even naming the token YFLR. It tends to muddy the waters in people's minds somewhat.

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Maybe I’m just thick but this seems very muddled and fraught to me.

 

These guys should have already prepared doco for all this but like many IT projects that’s an afterthought.  I’m now less impressed with their planning than I was previously.

I hope all this clarifies soon.

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Posted (edited)

Also dunno where I should post this so I'll just post it here, doesn't need a thread of its own. Hugo just talked on Twitter with some guy from the Doge community, I caught the end of it. Heard Hugo say 'the vast majority of exchanges that supported the airdrop have also agreed to list the token.' That could be immense. 

Said they were going through due diligence with Binance but they don't know yet it Binance is going to list it.

 Oh also forgot to mention that Hugo hinted at adding ADA again. Said it’s because yes they have smart contracts but they don’t have EVM smart contracts.

Edited by Seoulite
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