Fuji Money

FAQ

Frequently asked questions

Q. Who can borrow Fuji assets?

A. Anyone can open a new contract to borrow any asset offered on the platform, after locking BTC as collateral in a smart contract, plus a minting fee.

Q. How to send, receive and store Fuji assets?

A. Any wallet that has integrated the Liquid Network can store, send and receive Fuji assets to any address, in a peer to peer fashion.

Q. Who are the parties involved in the contract?

A. The user locking the collateral is called borrower and Fuji is always the issuer and the liquidator. The liquidation process is performed as soon as the value of collateral is below the minimum collateralization requirement and that is attested by an oracle with the use of a cryptographic signature.

Q. How can the borrower get back the collateral locked in the covenant?

A. The borrower can always redeem the entire collateral, upon burning the same amount of Fuji asset as was issued for this collateral.

In case of the price of the collateral falling below the contract minimum collateralization requirement, the liquidator will claim the collateral upon burning the Fuji asset and presenting the oracle’s signed message.

Q. Why would I ever lock Bitcoin to borrow a Fuji asset?

There are many reasons, for example:

You need a lot of Fuji assets (for running a market on TDEX or to use in lending schemes etc..) and it is not practical to buy on the market because of the fees or low liquidity.
If you believe that your Bitcoin price will rise you can use it to borrow a Fuji asset, then use that asset to buy more Bitcoin - so basically you can use borrowing as leverage.
If the Fuji asset trading price is above the reference index you can borrow Fuji to sell it on exchanges.

Q. What is the minimum collateralization requirement?

A. Each borrower must, at all times, maintain collateral such that the ratio of deposited collateral to asset settlement value is greater than the collateralization requirement of 150%, otherwise the collateral will be liquidated. To prevent liquidation, the sponsor can top-up the collateral via a single transaction that combines redeem and the issuance in one event, and does not require payout to the issuer.

Q. Can someone else beside the original borrower redeem the collateral upon burning a Fuji asset?

A. There are two contract version: Fuji Unlimited and Fuji Prime. In the former anyone can redeem BTC at face value using oracle price attestation, meanwhile the latter has exclusive collateral ownership for a recurrent minting fee.

Q. How to verify that the platform is not issuing Fuji assets without being backed by collateral?

A. The creation and burn process of Fuji assets are always non-confidential (ie. visible on the Liquid Network blockchain) and therefore easy to verify the supply and the collateral. This minimizes the risk of the platform losing credibility and reputation.

Q. If the Fuji asset represents a stock or security, can I vote or receive dividends?

A. No, a Fuji asset does not grant any rights on the underlying reference asset, only tracks the price.

Q. How is the price guaranteed to be 1 to 1 with the reference asset?

A. It is expected that borrower and liquidator incentives of redemption and liquidation, will make the asset price to closely follow the one of the underlying reference asset, plus anyone can borrow new Fuji at the current reference price, using arbitrage opportunities to balance the price on decentralized exchanges.

Q. If the collateral's value exceeds the collateralization requirement, shall the borrower close the current contract and borrow again?

A. No, there is no obligation to redeem the collateral and close the contract.

Q. Is the liquidation tied to a single Oracle service decided in advance?

A. All available Oracle services can be used to trigger the liquidation process. Each oracle service must sign his own price and include a timestamp in the message.

Built on Bitcoin

Blinded oracle

Non
custodial

How it works

Lock BTC collateral

Borrow Fuji USD

Use, trade or long BTC

FAQ

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