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Copy file name to clipboardExpand all lines: docs/fassets/01-overview.mdx
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Anyone on the Flare blockchain can mint FAssets, which are wrapped versions of original tokens from other blockchains, known as underlying networks. The original tokens from these chains, such as Ripple (XRPL), Dogecoin (DOGE), Bitcoin (BTC), and Litecoin (LTC), are referred to as underlying assets. For example, the FAsset version of Bitcoin is known as FBTC.
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Anyone on the Flare blockchain can mint FAssets, which are wrapped versions of original tokens from other blockchains, known as underlying networks.
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The original tokens from these chains, such as Ripple (XRPL), Dogecoin (DOGE), Bitcoin (BTC), and Litecoin (LTC), are referred to as underlying assets.
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For example, the FAsset version of Bitcoin is known as FBTC.
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### Minting
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### Challengers
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Challengers monitor agents for illegal transactions that reduce collateral below the backing factor. They:
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Challengers monitor agents for illegal transactions that reduce collateral below the backing factor.
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They:
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- Submit proof of illegal actions to the system.
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- Earn rewards from the agent's vault upon successful challenges.
Copy file name to clipboardExpand all lines: docs/fassets/02-minting.mdx
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#### Agent share
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This share remains in the agent's underlying account but is not marked as being in use. The agent can use this balance freely.
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This share remains in the agent's underlying account but is not marked as being in use.
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The agent can use this balance freely.
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#### Pool share
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This share is minted as FAssets and sent to the [collateral pool](/fassets/collateral#pool-collateral). The percentage of this share is defined by the agent and can be changed by the agent after a delay that provides time for minters to notice the change.
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This share is minted as FAssets and sent to the [collateral pool](/fassets/collateral#pool-collateral).
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The percentage of this share is defined by the agent and can be changed by the agent after a delay that provides time for minters to notice the change.
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### Executor Fee
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### Minting
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The FAssets agent verifies the minter after the user completes the collateral reservation and pays the collateral reservation fee. The agent is responsible for confirming or rejecting the minter's status. If the agent does not respond within a certain timeframe, the minter has the option to cancel the reservation and receive a full refund of the collateral reservation fee.
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The FAssets agent verifies the minter after the user completes the collateral reservation and pays the collateral reservation fee.
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The agent is responsible for confirming or rejecting the minter's status.
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If the agent does not respond within a certain timeframe, the minter has the option to cancel the reservation and receive a full refund of the collateral reservation fee.
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To enable the agent to verify the minter, the collateral reservation must include the address (or multiple addresses, in the case of UTXO chains) from which the payment will be made. If multiple addresses are provided, all of them must be used for the payment.
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To enable the agent to verify the minter, the collateral reservation must include the address (or multiple addresses, in the case of UTXO chains) from which the payment will be made.
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If multiple addresses are provided, all of them must be used for the payment.
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Users must wait up to 60 seconds before they can cancel their request. If the agent accepts within this time, the user can proceed to mint by depositing the underlying assets. Therefore, it is important for the agent to respond quickly. If the agent does not respond in time, it will depend on whether the user is willing to wait; otherwise, the agent will simply miss the opportunity to mint, but there will be no loss of tokens.
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Users must wait up to 60 seconds before they can cancel their request.
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If the agent accepts within this time, the user can proceed to mint by depositing the underlying assets.
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Therefore, it is important for the agent to respond quickly.
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If the agent does not respond in time, it will depend on whether the user is willing to wait; otherwise, the agent will simply miss the opportunity to mint, but there will be no loss of tokens.
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When the agent rejects the minter's request or the minter decides to cancel, the minter will receive a refund of the collateral reservation fee, minus a small percentage (e.g., 5%) that is burned. This burned amount is designed to prevent abuse of the agent by stopping someone from repeatedly reserving collateral from a sanctioned address. If the burned percentage were zero, an attacker could exploit the system without any cost.
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When the agent rejects the minter's request or the minter decides to cancel, the minter will receive a refund of the collateral reservation fee, minus a small percentage (e.g., 5%) that is burned.
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This burned amount is designed to prevent abuse of the agent by stopping someone from repeatedly reserving collateral from a sanctioned address.
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If the burned percentage were zero, an attacker could exploit the system without any cost.
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## Payment Failure
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### Expired proof
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Proofs provided by the [Flare Data Connector](/fdc/overview) can be created for 14 days and remain valid indefinitely once created.
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Suppose neither the minter nor the agent presents the proof of payment or nonpayment within the 14-day window. In that case, the regular minting process cannot continue, and the agent's collateral could be locked indefinitely.
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Suppose neither the minter nor the agent presents the proof of payment or nonpayment within the 14-day window.
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In that case, the regular minting process cannot continue, and the agent's collateral could be locked indefinitely.
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In this case, the agent can still recover the collateral by buying it back with native tokens.
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The recovery is accomplished with the following procedure:
Copy file name to clipboardExpand all lines: docs/fassets/05-collateral.mdx
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FAssets collateral is locked in contracts that ensure the minted FAssets can always be redeemed for the underlying assets they represent or compensated by collateral.
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Along with Flare's native token, FLR, any governance approved ERC-20 token on the Flare blockchain can be used as collateral.
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FAssets collateral ensures the security and redemption of minted FAssets by locking collateral in smart contracts. This guarantees that FAssets can either be redeemed for their underlying assets or compensated by collateral. Collateral can include Flare's native token (FLR) and any governance-approved ERC-20 tokens on the Flare blockchain.
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FAssets collateral ensures the security and redemption of minted FAssets by locking collateral in smart contracts.
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This guarantees that FAssets can either be redeemed for their underlying assets or compensated by collateral.
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Collateral can include Flare's native token (FLR) and any governance-approved ERC-20 tokens on the Flare blockchain.
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## Collateral Types
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#### Minimal CR
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The lowest collateral ratio the agent vault and the collateral pool must maintain so that enough collateral exists to insure the minted FAssets and to compensate for redemption payments that fail. The minimal CR can be different for each type of collateral.
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The lowest collateral ratio the agent vault and the collateral pool must maintain so that enough collateral exists to insure the minted FAssets and to compensate for redemption payments that fail.
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The minimal CR can be different for each type of collateral.
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If an agent's CR remains below the minimal CR for longer than a governance-set amount of time, [liquidations](/fassets/liquidation) can start.
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#### Exit CR
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After a user redeems CPTs, the pool CR must be more than the exit CR. If the pool CR is already below the exit CR, redemption cannot occur.
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After a user redeems CPTs, the pool CR must be more than the exit CR.
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If the pool CR is already below the exit CR, redemption cannot occur.
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The exit CR is for the collateral pool only.
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#### Top-up CR
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To incentivize healthy collateral pools, if the pool CR falls below the top-up CR, anyone can add collateral to the pool and receive [CPTs](#pool-collateral) at a reduced price. This [top-up mechanism](#top-up) decreases the likelihood of liquidations because of a low amount of pool collateral.
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To incentivize healthy collateral pools, if the pool CR falls below the top-up CR, anyone can add collateral to the pool and receive [CPTs](#pool-collateral) at a reduced price.
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This [top-up mechanism](#top-up) decreases the likelihood of liquidations because of a low amount of pool collateral.
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## Minting Fees and Debt
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After step **4**, Bob is not entitled to any of the fees in the pool:
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- Bob is assigned an initial fee debt of 10 FAssets, according to the $fee\_debt_p$ formula in the box above.
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- As a result, the total virtual fees are increased to 20 FAssets. 10 of them are in fees, and 10 of them are in debt.
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- As a result, the total virtual fees are increased to 20 FAssets.
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10 of them are in fees, and 10 of them are in debt.
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- Each user now holds half the total CPTs, therefore they are allowed to withdraw half the virtual fees, this is, 10 FAssets each.
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- Alice has no debt, so she can withdraw 10 FAssets, which is all the fees in the pool, because she was the only CPT holder when these fees were accrued.
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- Conversely, Bob has 10 FAssets of debt, so he can't withdraw any of the fees.
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After step **3**, all of Alice's CPTs continue to be transferable, and she is entitled to 100% of the fees in the pool.
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If she transferred or traded his CPTs, the recipient of those CPTs would be entitled to the fees.
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After step **4**, only half of Alice's CPTs are transferable (50 CPTs). The other half is debt-locked.
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After step **4**, only half of Alice's CPTs are transferable (50 CPTs).
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The other half is debt-locked.
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After step **5**, only 25% of Alice's CPTs remain locked (25 CPTs), which correspond to her 5 FAssets of debt.
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## Top-up
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To reduce the likelihood of liquidations because the pool collateral is too low, the pool can be topped up at a reduced price when the **CR** is above the **top-up CR**. A top-up mechanism for vault collateral is not available. To prevent liquidation, agents can add vault collateral any time.
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To reduce the likelihood of liquidations because the pool collateral is too low, the pool can be topped up at a reduced price when the **CR** is above the **top-up CR**.
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A top-up mechanism for vault collateral is not available.
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To prevent liquidation, agents can add vault collateral any time.
Copy file name to clipboardExpand all lines: docs/fassets/06-core-vault.mdx
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:::info
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Transfer requests do not expire. Agents must either complete the transfer or cancel and re-queue it. Inaction leaves collateral locked indefinitely.
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Transfer requests do not expire.
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Agents must either complete the transfer or cancel and re-queue it.
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Inaction leaves collateral locked indefinitely.
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:::
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### Security Model
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The XRP Core Vault features enhanced security measures for managing daily liquidity, including escrow time-locking and a minimum reserve in multisig setups. It has an emergency pause function and "Red Alert Mode" for urgent threats.
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The XRP Core Vault features enhanced security measures for managing daily liquidity, including escrow time-locking and a minimum reserve in multisig setups.
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It has an emergency pause function and "Red Alert Mode" for urgent threats.
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In case of a security issue, all signing is halted pending governance review. Escrow accounts may be unlocked to prevent asset loss, with governance overseeing the restoration of operations. Only one escrow can be unlocked per day, minimizing potential damage.
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In case of a security issue, all signing is halted pending governance review.
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Escrow accounts may be unlocked to prevent asset loss, with governance overseeing the restoration of operations.
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Only one escrow can be unlocked per day, minimizing potential damage.
Liquidation is the process of selling assets to bring the FAssets system back to health after an [agent](/fassets/overview#agents) becomes undercollateralized. The following types of liquidation can occur:
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Liquidation is the process of selling assets to bring the FAssets system back to health after an [agent](/fassets/overview#agents) becomes undercollateralized.
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The following types of liquidation can occur:
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-**Unhealthy position liquidation**: Occurs when the [collateral ratio (CR)](/fassets/collateral#collateral-ratio) of either the agent's vault or collateral pool falls below its respective [minimal CR](/fassets/collateral#system-wide-thresholds).
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In this case, the agent's position is liquidated until the collateral ratio reaches the [safety CR](/fassets/collateral#system-wide-thresholds) or all of the backed FAssets are liquidated.
This page lists the current values for the most important parameters of the FAssets system on **Songbird Canary-Network** and **Songbird Testnet Coston**. These values are subject to change as the system is further developed and tested.
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This page lists the current values for the most important parameters of the FAssets system on **Songbird Canary-Network** and **Songbird Testnet Coston**.
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These values are subject to change as the system is further developed and tested.
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## Asset Manager Operational Parameters
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To get the default agent settings, you need to call the `getSettings` function on the `IAssetManager` interface. Read more about the `IAssetManager` interface [here](/fassets/reference/IAssetManager).
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To get the default agent settings, you need to call the `getSettings` function on the `IAssetManager` interface.
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Read more about the `IAssetManager` interface [here](/fassets/reference/IAssetManager).
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### Minting and Redeeming
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### Core Vault Manager
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To get the Core Vault manager operational parameters you need to use the [`ICoreVaultManager`](/fassets/reference/ICoreVaultManager) interface. Specific functions added to each parameter.
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To get the Core Vault manager operational parameters you need to use the [`ICoreVaultManager`](/fassets/reference/ICoreVaultManager) interface.
To get the Core Vault settings you need to use the [`IAssetManager`](/fassets/reference/IAssetManager) interface. Specific functions added to each parameter.
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To get the Core Vault settings you need to use the [`IAssetManager`](/fassets/reference/IAssetManager) interface.
The launch of FAssets on Songbird Canary-Network demonstrates system behavior while paving the way for its next deployment on Flare Mainnet. The primary goals of this test are to ensure the system operates as intended, identify edge cases, refine usability and automation, and incentivize whitehat security researchers to uncover potential code errors.
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The launch of FAssets on Songbird Canary-Network demonstrates system behavior while paving the way for its next deployment on Flare Mainnet.
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The primary goals of this test are to ensure the system operates as intended, identify edge cases, refine usability and automation, and incentivize whitehat security researchers to uncover potential code errors.
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The test on Songbird Canary-Network will have the following characteristics:
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