Understanding FlowFi

FlowFi offers unique composability opportunities for both emerging and established token projects as well as DAOs. It creates avenues for more strategic, efficient deployment, ownership, and control of liquidity.

Furthermore, FlowFi provides opportunities for exchanges to strengthen their liquidity and for market makers to utilize Protocol Owned Assets (POA) to generate substantial liquidity for specific projects.

In the future, FlowFi will enable new projects to establish their initial liquidity as determined by its governance mechanism.

FlowFi facilitates two primary roles for its dApp users: Liquidity Directors and Liquidity Providers.

Liquidity Providers:

• These users deposit single-sided assets into individual Token Reactors and/or Pair Reactors (like ETH, USDC, etc.), earning yield in the form of FlowFi's native protocol token.

Liquidity Directors:

• They stake FlowFi's token and vote on how liquidity pairs from the Pair Reactors and to which exchange venue it should be directed. They also earn yield in the form of the native token.

Cycles (Epochs):

FlowFi operates in epochs called Cycles, essential for system stability and health.

• Cycles are one-week periods, starting on Wednesdays and transitioning to the next Cycle the following Wednesday.

• At each cycle rollover, various actions are executed by the manager contract. More information on these rollovers can be found in the Manager Mechanics section.

Cycle Considerations for Liquidity Providers and Directors:

• Assets deposited mid-Cycle as a Liquidity Provider, or staked as a Liquidity Director, start earning yield at the beginning of the next Cycle.

• Newly deposited assets by Liquidity Providers are not used as liquidity until the next Cycle starts.

• Liquidity Directors' votes take effect with the commencement of a new cycle.

• Withdrawal requests must be placed first, with the actual withdrawal possible only at the start of the next Cycle, requiring two transactions: the "Request to Withdraw" and the actual withdrawal to the user's wallet.

• New rewards become available at the end of a Cycle and can be claimed anytime.

Protecting User Assets:

Deepool implements various mechanisms and safeguards to mitigate the risk of impermanent loss, ensuring that Liquidity Providers can always reclaim their deposited assets on a 1:1 basis. These mechanisms may involve some risk to token stakers, but only as a last resort.

Fee Capture:

• The protocol captures fees from its liquidity provision across DeFi. Over time, this builds a substantial reserve of various assets in FlowFi's POA (Protocol Owned Assets), ultimately controlled by token holders through decentralized governance.