fUSD and economic abstraction go hand in hand, for Fantom, we want to be able to provide builders, partners, and users, a predictable and budget-friendly system. This means being able to allocate fees in either FTM or fUSD and able to predict future costs based on usage. This allows for consistency in planning and further unlocks additional institutional products. As we move towards fUSD v2, and allow it as a fee system on-chain we need to migrate from v1.
Migrations & Liquidations:
fUSD v1 will implement liquidations. Any positions where fUSD debt is equal or greater than the FTM or sFTM backing will become liquidated. Where the backing is in sFTM, the stake will immediately be unstaked and all rewards claimed as well. Where this is a validator, if the validator falls below minimum stake, the validator will no longer be able to produce blocks or receive block rewards.
Liquidity & closing positions:
To allow users to close out their positions, we have built a swap tool that will allow users to swap DAI to fUSD and then settle their outstanding debt.
Ample time will be provided to close out these positions and advance notification will be given before liquidations go live.