- fUSD v2 will allow for an on-chain fee system and help unlock Fantom to further institutional adoption.
- The migration to fUSD v2 will allow for a predictable, budget-friendly on-chain fee system.
- Liquidations of FTM positions will occur, although users will have ample time to sort such scenarios.
Layer-1 blockchain platform Fantom plans to migrate from fUSD version 1 to fUSD version.
The Fantom Foundation said in a blog announcement on 29 January that the stablecoin migration is a key goal as the developer team seeks to make the scalable next-gen blockchain more predictable and cost-effective for builders, partners and users.
fUSD V2 will see Fantom users allocate fees in the native FTM or fUSD, with this making it easier to predict future costs based on the network usage.
According to Fantom Foundation’s Andre Cronje, moving toV2 and allowing for an on-chain fee system will not only introduce consistency when it comes to planning, but also help unlock more institutional products.
FTM liquidations ahead of v2 launch
Fantom supports the use of FTM and fUSD in decentralised finance (DeFi), with users able to access services such as lending and borrowing. It’s for this reason that the Fantom Foundation has highlighted potential liquidations as migration from fUSD v1 begins.
fUSD migration & liquidations https://t.co/vj4UAagaoX
— Andre Cronje (@AndreCronjeTech) January 29, 2023
The liquidations, Cronje pointed out, will occur in scenarios where the fUSD debt is either equal to or greater than the FTM or staked FTM (sFTM) backing it. In case of sFTM, Fantom says the stake will be unstaked immediately, with all rewards thereof claimed.
The same cause of action will be taken against validators with less than the minimum stake, with this group unable to produce blocks or claim block rewards.
The timeline for v2 going live hasn’t been provided, but Fantom will help users as they look to close out positions ahead of the launch. This includes the ability to swap DAI for the Fantom stablecoin using a newly created swap tool.
Users will get enough time to sort out themselves and benefit from advance notifications before any liquidation.