Proposing the Fabric Ecosystem: Litepaper Now Available

The synthetic asset protocol is attempting to curate a user base for launch by issuing the Litepaper.

By
Utulu Hope
on
May 27, 2021
Category:
Breaking News

Introduction 

In a Tweet on the 22nd of May 2021 Fabric announced its Litepaper is now available. In the Litepaper, the decentralized synthetic asset issuance protocol proposes the Fabric ecosystem. The document discloses details about the Fabric Ecosystem, decentralized web application (dApp), decentralized exchange (DEX), and native FAB tokens. This article will summarize the key points listed in the Litepaper while also discussing its importance to the Fabric Ecosystem proposal. 

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Introducing SPL Synthetics 

The first section of the litepaper describes the features of the Fabric ecosystem. One of the core features is the SPL Synthetics supported by FAB tokens — the native currency of Fabric. SPL Synthetics are minted when users use the Fabric dApp to interact with smart contracts while staking FAB tokens as collateral. A 1000% collateralization ratio is required to mint SPL synthetics. Now, what is the importance of SPL synthetics? 

When FAB holders want to stake their tokens to mint SPL synthetics, some mechanisms are utilized. These mechanisms ensure that FAB stakers are encouraged to maintain their collateralization ratio of 1000%. In essence, these mechanisms are in the form of rewards —  Serum DEX rewards, mint/burn rewards, and FAB staking rewards. 

The overcollateralization ensures that enough collateral supports SPL synthetics to cope with price volatility. Thus, FAB stakers create debts when they mint SPL Synthetics. To unlock their FAB, they need to pay back the debt by burning the SPL synthetics. In short, the SPL Synthetics is very important to a functional Fabric Ecosystem as it allows FAB holders to maintain their collateralization.


Web dApp and DEX

This is another core feature for the benefit of its users. The Fabric dApp will provide a web GUI that will interact with the Fabric protocol. This allows users to stake FAB and mint SPL Synthetics. Users will view rewards and vote on Fabric Protocol Improvement Proposals (FPIPs). 

The Fabric DEX will provide a web GUI for the Serum DEX, giving users the license to trade any SPL token against a central order book. 


FAB Token

This is the last incentive for adoption in the Fabric Litepaper.  The FAB token has a lot of unique qualities and will hold the following utility: 

  • Governance utility: Holders of FAB will have a say in the protocol's governance. They will have a license to vote on new SPL Synthetics, Oracle feeds, and Fabric ecosystem proposals via the Fabric dApp. 
  • Staking utility: FAB holders will be able to stake FAB for xFABRIC and earn FAB from Fabric DEX fees. 

There will also be more incentives in the distribution of FAB tokens. The community will get 8% of the initial supply — 500,000,000 in an airdrop. 20% will go to the partnership, while 60% will be stored in its mining supply. Fabric will use the remaining percentage for development..


About Fabric

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Fabric is a decentralized synthetic asset issuance protocol built on Solana. Its synthetic assets are collateralized by Fabric tokens (FAB) that must be locked in Fabric pools to ensure that SPL synthetics are minted and distributed. Once stamped, SPL synthetics can be traded on the Serum DEX. In summary, Fabric provides tokenized synthetic assets that use an over-collateralized staking pool, the central order book of Serum decentralized exchange, and a unique Oracle architecture. 


Closing Thoughts

The litepaper describes the plans for the Fabric ecosystem along with the benefits of trading on its Serum-based DEX. With this made available, it is easy for users to understand what Fabric plans to integrate, while also providing details about the present infrastructure. One core significance is that users get a license to perform many operations on the protocol by holding FAB, indicating the significance of the governance token. Synthetic asset protocols have seen great success on other chains, and Fabric seems poised to become a major player in the Solana ecosystem. 


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Utulu Hope

UC Hope is a passionate fan of crypto who could weave the latest event into sparks of inspiration and information. He leaves no stone unturned to get to the core of a story. Aside from writing, he spends his hours poring over algorithms and protocols, preparing for a future career as a computer programmer.