Fluidity, a spend-to-earn DeFi protocol, is scheduled to go live on the Ethereum mainnet on December 19, 2022. As a blockchain incentive layer, Fluidity brings something refreshing to the DeFi space. It rewards users for completing a transaction with Fluid-wrapped assets.
One of the newest protocols gracing the DeFi space, Fluidity, has been running on the Ethereum testnet and Solana Devnet beta. It has already amassed 50,000 users across both testnets, making it one of the fastest growing newcomers. After an initial release on Ethereum and Solana, Fluidity will be released on other blockchains such as Polygon and Arbitrum.
Reinterpretation of the traditional return model
Fluidity operates a secure and audited system that has turned the traditional return model on its head. It replaces traditional yield farming/liquidity mining with a spend-to-earn model that encourages real users. This means that as users explore different aspects of the protocol, they will continue to earn.
But how exactly does Fluidity work? Simply put, the protocol rewards users for using liquid-packaged assets for on-chain transactions, including bartering and trading. Instead of using, lending, or locking their digital assets for an extended period of time to earn rewards, users can transact on such assets to earn rewards. The only catch is that the good must be liquid-packed.
Regarding the project, Fluidity founder Shahmeer Chaudhry said:
“Four or five years ago everyone was saying DeFi could be the use case that would bring a billion users to crypto – but it actually turned out to be NFTs and GameFi. At Fluidity, we want to gamify how people think about spending, and our long-term goal is to reshape the way people spend.”
Fluidity-wrapped assets and high-yield spend
As previously mentioned, the key to unlocking rewards in Fluidity lies in transactions involving liquid-packed assets. These liquid assets are stablecoins that are backed one-to-one with the underlying currency. They can be redeemed by users at any time.
According to reliable information from Fluidity, between 50 and 70% of all transactions within the protocol are rewarded. Such rewards are shared 8:20 between senders and receivers. Recipients in this sense can be service providers who are paid with liquid-packed assets.
Fluidity will encourage sending and receiving payments with wrapped tokens. Any user can make money by spending on such essential things as rent, food, gas, and more. Regular crypto enthusiasts have other earning opportunities, including interacting with a decentralized exchange (DEX), a GameFi platform, or even by participating in an NFT marketplace. All they have to do is use liquid-packed tokens for payments.
Wrap up
Fluidity brings something unique to the DeFi space. It’s no surprise that it has received over $100,000 in development grants from entities such as Polygon, Solana, Compound, AAVE, Lido, and RMIT Blockchain Innovative Hub. Fluidity has also received up to $1.3 million in seed funding from backers including Solana, Circle, Multicoin Capital, and Lemniscap.
When Fluidity goes live on Ethereum and Solana, we expect it to attract many users. As mentioned, it has already attracted up to 50,000 users known as “Fluiders”. They have already stress tested the system and it is ready to welcome millions of new users.
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