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  • ๐ŸŒŠ๐Ÿ’ธ Welcome to Fluidity Money
  • Docs
    • ๐Ÿ“šLearning and getting started
      • ๐Ÿ”ฎWhy Fluidity?
      • โ“What are Fluid Assets?
      • ๐ŸŒŸHow do you get a Fluid Asset?
      • ๐Ÿ’ฐHow are the rewards earned?
      • ๐Ÿ—ƒ๏ธThe Economics of a Fluid Asset
        • โœ๏ธTransfer Reward Function (TRF) Example
      • ๐Ÿ“‹Tutorials
        • How to use Fluidity
    • ๐ŸกAddresses
      • ๐Ÿ…ฐ๏ธArbitrum
      • โ˜€๏ธSolana
      • ๐Ÿ’งSui
      • ๐Ÿ˜ณSuperposition devnet
    • ๐Ÿ” Fundamentals
      • ๐Ÿ“„FAQ
      • ๐Ÿ”ซFluidity Wars
      • โ›๏ธUtility Mining
      • ๐ŸคFor arbitrage
      • ๐Ÿ›๏ธUnderstanding the $FLY Governance Token
        • ๐Ÿ’ธFluidity $FLY Vaults
        • ๐Ÿช™Understanding $FLY Tokenomics
      • โ›“๏ธLaunch restrictions (mint limits)
      • ๐Ÿ”“Governance structure
      • ๐Ÿš‚Advisory team
      • ๐Ÿ‘ฉโ€๐Ÿซ๐Ÿ‘ฉ๐Ÿซ Laws of Fluidity
      • ๐Ÿ›ฃ๏ธRoadmap
        • ๐Ÿš€Product roadmap
        • ๐ŸŒค๏ธDecentralisation roadmap
      • ๐Ÿ‘ฉโ€๐Ÿš€Why instant rewards?
    • ๐Ÿ’ธUse-cases
      • โŒจ๏ธDevelopers
      • ๐Ÿฆ„DEXs
      • โœจFluid Assets and Utility
      • ๐ŸŽฎMetaverse and Gaming
      • ๐Ÿ–ผ๏ธNFTs
      • ๐Ÿ’ณTransactions and Payments
      • ๐ŸŒŠOther Use-Cases
    • ๐ŸŽชDevelopers
      • ๐ŸขArchitecture
        • ๐Ÿ‘ทWorker architecture
        • ๐Ÿ’ Ethereum contract architecture
        • โ˜€๏ธSolana program architecture
      • ๐ŸŽEVM ABIs
      • โ˜€๏ธSolana account structure
      • ๐Ÿ™‹How can I Fluid Wrap my custom token?
      • ๐Ÿ“ŠGraphQL
      • ๐ŸงพDev Tutorials
        • โ›๏ธCreating a New Utility Mining Client
        • ๐Ÿ‘ฉโ€๐Ÿ’ปSupporting a New Application
        • ๐Ÿ’ธSending and receiving a Fluid Asset
        • ๐Ÿš„Supporting a Fluid Asset on your DEX/AMM/exchange
        • ๐ŸŽWrapping and unwrapping a Fluid Asset in your app
        • ๐ŸŒŠProviding liquidity for a Fluid Asset
      • ๐Ÿ“”Whitepapers
    • ๐Ÿ’ชSecurity
      • ๐ŸคณWebsite/infrastructure security
      • ๐Ÿ“ฅDropboxes
      • ๐Ÿ’ฐBounty program
      • ๐Ÿ“œAudits completed
      • ๐Ÿซ‚Contactable team
    • ๐ŸคPartnerships/collaboration
      • ๐ŸคPartnering with us
      • ๐Ÿ‘Join us!
      • ๐Ÿ’ฌFluidifying your asset
        • ๐Ÿ˜ŽBrand assets
    • Useful links
      • Fluidity website and whitepapers
      • Fluidity Whitepaper v1.0
      • Discord server
      • Medium
      • Telegram
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  1. Docs
  2. Learning and getting started

How are the rewards earned?

If using a Fluid Asset can allow a person to potentially earn yield, where does this yield come from?

Fluidity borrows from the yield generation concept to create a 'no-loss' rewards savings pool.

As mentioned earlier, to mint a Fluid Asset a principal token is required to be locked up. When you mint 1 ฦ’USDC you have to deposit 1 USDC token in exchange.

Fluidity earns yield on the deposited USDC token and distributes it to the reward pool, which is only accessible to people who utilise the respective Fluid asset.

The yield is generated from lending the principal asset into Decentralised Finance protocols such as Compound or Solend, or utilise in yield generating strategies. When a Fluid Asset is swapped back for the principal, the contract withdraws the tokens from the Defi Protocol.

This way Fluidity does not charge any fees to utilise Fluid assets, and rewards can be sizeable.

In the next section, we explore how these rewards are sized, the expected payouts, probabilities and how Fluidity protects itself.

PreviousHow do you get a Fluid Asset?NextThe Economics of a Fluid Asset

Last updated 2 years ago

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