In our 2021 Road Map Article, published in January, we talked about our commitment to paving the way for mass, real-world adoption. This is because of the positive impact we believe that decentralized payments and finance infrastructure will have on the lives of everyday people. By continuously building and implementing cutting-edge products, protocols, and frameworks on top of Fuse Network, we are able to empower entrepreneurs and disruptors; providing them with the tools needed to compete and succeed in the new financial landscape.
1. TRACTION
We are proud of the progress made so far this year. Projects building on Fuse such as CuraDAI by Kolektivo Labs, the Cannons Creek Token Community in New Zealand, Comunitaria in Spain, and GoodDollar continue to succeed within the Fuse ecosystem in part thanks to rapid implementation of the most up-to-date, decentralized finance and payments technologies.
Our predominant product and infrastructure development focus for the first half of 2021 has been on DeFi.
Efforts in this area saw the TVL (total value locked) on Fuse Network rise to over $17M with weekly trading volumes on network-native DEX FuseSwap hitting highs of over $500K with more than 250 trading pairs created in the process.
Our lending network, launched in collaboration with Ola Finance in May, has also seen significant progress with over 100 addresses supplying $300K in FUSE, ETH, BTC, and USDC. This is strong, organic, exchange and lending growth.
We have also developed other important areas. Notably, we made headway in the area of stablecoins — with the introduction of FuseDollar — and formed collaborations with top names like Ramp Network to ensure easy onboarding to Fuse Network from legacy banking in 170+ countries around the world with zero commission fees.
Our Binance Smart Chain bridge also means that Fuse now has interoperability with two extra major ecosystems, giving liquidity providers and token holders better options when deciding how to make the most of their assets.
Powerful integrations with The Graph, POKT Network, and other leading infrastructure projects mean more decentralization and scalability for developers and the Dapps they build on Fuse — ever more crucial as we approach 15 million transactions on-chain and over 400k wallet addresses generated.
Finally, our mobile infrastructure is strengthening and obtaining more powerful functionality every day as UI and support layer features are improved and harmonized across different Dapp implementations from Communitaria to Fuse Cash. The Core Wallet has now been forked over 60 times.
H2 & THE ROAD AHEAD
With a multitude of real-world, payment-centric communities now functioning on top of Fuse, along with a growing DeFi product suite, our focus in the second half of 2021 revolves around ensuring robustness and expansion of the network and its ecosystem.
More specifically we have made plans to prepare for scale, further decentralize platform and protocol governance and harden the underlying asset through improved tokenomics.
1. THE RACE FOR VISA-LIKE TRANSACTION SPEED
Fuse is currently processing around 40K transactions per day which theoretically gives the network plenty of room to scale given its daily capacity of around 7.9M.
However, as we have seen with other networks, demand can very quickly rise to meet supply. With multiple payment-centric communities gaining traction it’s now crucial for plans to be put in place to provide the capacity to scale.
Our vision is to not only compete with Visa but to go way beyond what they have been able to achieve. Being slightly faster is not enough. We aim to outcompete leading payments players in all technical requirement areas that would be considered in the case of potential future migrations.
This includes but is not limited to:
- TPS (transaction per second)
- Transaction finality
- Privacy
- Facilitating banking integrations
- Providing truly global coverage
- Leveraging mobile to reduce hardware costs
- Pure, open-source infrastructure for ease of integration and, therefore, lowered costs
DeFi & Evolving Network Demands
When we started Fuse in 2019, DeFi was just taking off. EVM chains were rare and there were almost zero interchain transactions.
Things have evolved considerably since then, along with our understanding of how the technology we are building will be used. As a public network, we saw growing DeFi usage and furthered our understanding of needs — notably concerning the requirement for more sophisticated tools and frameworks on EVM chains that are designed for real-world applications.
The execution of more complex, smart contract-based transactions used for decentralized finance i.e. trading, providing liquidity, and borrowing assets, require a more adaptive fee mechanism. At the same time, we have discovered that we can achieve much lower costs for p2p transfers than previously thought possible by leveraging the latest developments in layer two technologies.
As we scale, the majority of users will interact with Fuse Network on mobile devices, thanks to the Wallet Core SDK. This places us in an advantageous position; allowing for the integration of almost free and frictionless P2P transfers on a layer 2 scaling solution on mobile while forming a fee economy on layer 1 in order to drive more demand for the network and the multitude of different services that function on top of it.
More appropriate fees can be applied to users executing DeFi related transactions for speculative or professional reasons, whilst ensuring that everyday users wishing to make simple p2p transactions are not impacted.
Introducing FL2P — Flutter Layer 2 Payments
Flutter Layer 2 Payments (FL2P) is a ZK-Rollup SDK that can be integrated directly into the Wallet Core and any of its forks including CuraDAI, Comuntaria, and Cannons Creek. This is part of a larger strategy to make any functionality built-in Fuse Cash and other leading implementations of Fuse Wallet composable and accessible to projects building on Fuse.
By integrating this option, projects are able to integrate FL2P so that everyday payments can be transacted on a layer 2 infrastructure, allowing for a 99% reduction in costs.
We aim to create the most seamless settlement experience in crypto from layer 2 back to layer 1 leveraging our unique SDK which is part of a noncustodial full-stack solution.
The first pilot for L2 payments will take place in Q4. Pending successful implementation, this function will then be integrated into the SDK allowing any operator that is using our Wallet Core mobile infrastructure to add ZK Rollups.
We aim to make the SDK available for public release and use by any payments community building using the Core Wallet by H1 2022.
2. DECENTRALIZATION OF PLATFORM GOVERNANCE
Plans are in motion to gradually begin phasing out the current control that the foundation has over platform direction. At the “hard governance” level, Fuse features a strong network of validators who ensure that any major changes to network parameters like block rewards, block size, or the consensus algorithm, are put to a vote. However, there are also open source products and frameworks that are native to Fuse, including the Studio and the Wallet Core, that would benefit from a more decentralized governance mechanism.
Our long-term vision is for not only the network but also the open-source technologies that are built on top of it to be completely decentralized and belong to the community of token holders. As we continue on this journey of decentralization and community involvement, increasingly advanced governance features will be implemented to ensure that the ecosystem is able to grow efficiently and in keeping with its core values.
Introducing the Fuse Assembly
Putting a community governance structure in place is a gradual process that first of all requires us to appoint initial contributors with defined areas of responsibility before distributing authority, allocating budgets where necessary, and coordinating activities.
As of August, five Fuse ecosystem members that have shown consistent dedication and commitment to the project, and already have a voice within the community, are appointed to the Fuse Assembly:
1. Rob Brown, PhD
Council Chairman
Rob is a software developer and business operations expert with over 20 years of experience. He runs Fuseprime, an independent organization that was one of the first validators on Fuse Network, and has been heavily involved in Fuse community management and strategic project development since 2019.
2. Luc Lammers
Council Member, Business & Marketing
Luc is a business development expert, SaaS leader, and startup enthusiast. He has been a committed member of the Fuse ecosystem since mid-2020 and brings a depth of growth-oriented experience to the team.
3. Lucas @ Fuse Core
Council Member, Business & Finance
Lucas is a financial expert and bank-less enthusiast with over 16 years of experience in financial management and consulting. Lucas joined the Fuse ecosystem in late 2020 and runs a validator. He brings an extra dimension to the development and presentation of the network as an investment opportunity.
4. Bertrand Juglas
Council Member, Technology
Bertrand brings over twenty years of open-source engineering and DevOps experience to the team, having worked extensively with Linux and other leading technologies. He was originally introduced to Fuse Network whilst working on the GoodDollar project where he remains a leading voice and prominent community member.
5. Jan Owiesniak
Council Member, Business & Technology
Jan has over 10 years of business and software development experience and currently serves as CTO and co-founder of an Augmented Reality platform designed to drive customer loyalty and boost sales. Having joined the Fuse ecosystem more recently in 2021, Jan has shown an enormous amount of commitment, providing support and feedback across the various different technologies that we are building.
Community Token Pool
Initially, a budget of 200,000 FUSE per month will be placed into a community pool under Fuse Assembly management for funding of grants, bounties, marketing, and other initiatives designed to serve communities building on the platform and drive innovation.
Snapshot governance
The creation of the Fuse Assembly is the first stage in transitioning full governance and ownership to the community.
In September 2021, the Assembly will take over control of the Fuse Forum and begin implementation of Snapshot, a multi-governance community polling dashboard that will allow decentralized decision-making on more granular aspects of development.
As we head into 2022, research will begin on implementing a more advanced governance platform that allows the Fuse Assembly to further distribute governance and streamline the way budgets are allocated and managed.
3. TOKENOMICS & TREASURY
It’s important for community members and token holders to understand how upcoming changes to the way transactions are processed (as mentioned above), fee models, Fuse treasury management, and inflation might impact token supply and demand characteristics of the network.
Treasury update.
Updated information is provided below on the Fuse Tokens currently in circulation and being managed by the treasury:
- Future Dev Pool will be smart contract locked until September 2024.
- Half of the initial Boostrap pool (65M FUSE) will be smart contract locked with releases back to the treasury at the beginning of 2022, 2023 & 2024.
- New community pool created under Fuse Assembly management with a budget of 200,000 FUSE per month provided by the Bootstrap pool.
Future Goals for Foundation Holdings
In keeping with the objective described above of decreasing the Gibraltar foundation’s control over the project, we also plan to balance the token ratio between the foundation’s holdings and circulating supply. The treasury is currently holding more FUSE than circulating supply by a ratio of around 8:3. We aim to balance this, targeting a 1:1 ratio by Q3 of 2023.
Token Burns
Having officially launched Fuse Token less than 10 months ago, there is still a lot of bootstrapping to be done. However, in order to meet the ratio targets, the treasury will, if necessary, execute tokens burns at particular intervals over the next two years.
Inflation Rate Change
Fuse Network’s dPOS-rewards-driven inflation model currently provides stakers with 5% rewards annually based on their proportionate share in the total amount of FUSE staked. This highly attractive rate was initially put in place to attract early adopters and supporters at a time when there was little activity on the network. Our documentation stated, at the time, that at phase 2 of our growth a different rate would be proposed to optimize the inflation schedule policy.
Following an engaging community discussion on the Forum, the proposal will soon be put to a vote and, subject to approval by validators, the inflation rate change will go ahead.
The proposal can be found here. We encourage community members that haven’t yet had the opportunity to take part in the discussion.
The proposed model is to reduce inflation over the next 10 years starting with an immediate reduction from 5% per annum to 2% in late September/early October 2021 including periodic reassessments to ensure Fuse’s competitive edge in the DeFi landscape.
The table above models how the inflation model could be improved over time. However, changes would be made one at a time beginning with the initial proposal to reduce from 5% to 2%. A majority of validators will need to approve the change in order for it to be implemented.
4. PRODUCT AND INFRASTRUCTURE DEVELOPMENTS
Wallet SDK and Forkability
From day 1 we aimed to make every piece of our tech open-source and public. From the underlying code to the business models and strategies used by communities to scale, we believe that harmonizing tech and creating a sharing environment with instructions and educational resources is the best way to create a strong and vibrant ecosystem. It is to this end that we released the Wallet Core SDK.
One of the challenges we face is that the wallet has been undergoing huge improvements, especially in the first half of the year. This means that the documentation available still requires relatively experienced developers who have an understanding of Flutter and the available libraries. Many of the tools built into the wallet were also added following demand from developers that used the platform in the last year.
A top priority for the team in Q3 and Q4 is to focus more on 3rd party developers and continue to develop the documentation which makes up the SDK making it more readable and making the wallet more forkable by a wider developer audience. All functionality from social backup to layer 2 payments will eventually find its way to our Wallet Core SDK.
Studio API Module
The fully self-service Studio allows the owner to interact with and manage every aspect of the project they build on Fuse including the community smart contract, tokens, cross-chain bridges, users, and merchants.
Thanks to the latest API documentation, updated in Q2 of this year, projects are able to integrate these functionalities into their own business tools. As more features are added to the Studio we continue to provide the necessary API support as part of an ongoing process.
Freemium & Premium Studio Tools
Fuse Studio currently operates under an entirely free model which has been hugely beneficial in allowing projects to begin testing concepts and get communities up and running quickly.
As Studio features become more sophisticated, we plan to introduce paid services for certain modules as part of a premium model that requires Fuse Token as a form of payment. This allows for the sustainable long-term development of business tools on Fuse Network, enables better support, and creates extra demand for the underlying asset.
The expected timeline for the first premium business services on Fuse is the end of Q4 21/the start of Q1 22.
Invoicing
Businesses and individuals that process a lot of payments on Fuse will soon be able to streamline the process thanks to the upcoming integration of Request Network.
This solves a key challenge for organizations that function on Fuse Network, starting with the Fuse foundation itself, as it allows for better management of funds notably for the payments of grants, bounties, and other activities designed to foster growth within the ecosystem.
Using Request Network businesses are able to minimize manual tasks related to paying and getting paid, saving hours in the process. Features include creating invoices, accepting invoices, fully compliant record keeping, payment notifications, and client address books.
August/September is the estimated timeline for the arrival of this service on Fuse.
NFTS
Following the NFT grant launched in June as part of the Fuse Builders Grant Program, the ERC-721 standard has now been deployed on the network.
More developments can be expected in this area including the ability to mint NFTs in the studio and adding NFT support in the wallet.
Stay tuned for a fun campaign to distribute the first-ever NFTs on Fuse to dedicated community members.
Bluetooth Social Recovery
We intend for Fuse Wallet to be the first in the world to enable Social Recovery leveraging Bluetooth Low Energy (BLE).
Without a user-friendly solution that solves the inherent security issues of blockchain in a way that competes with the banks, mainstream adoption will be extremely difficult. Private keys and mnemonic seed phrases are not a long-term answer to the problem.
We strongly believe in “Social Recovery” as the most prominent and user-friendly solution. Social Recovery allows the user to assign “guardians” (typically friends and family) who can help unlock the wallet by signing a special transaction to change the signing key registered in the wallet contract to a new one.
In September of this year, the first “Social Recovery” feature pilot will take place in Fuse Cash with the aim of making it available to all forked wallet implementations in Q4.
WalletConnect
The majority of activity on DeFi and other protocols on Fuse Network is currently being executed using Metamask wallet. And yet there is growing liquidity on Fuse Cash and other Fuse-based wallets that could be interacting with these services including FuseSwap and Fuse Lending.
WalletConnect, an open-source protocol for connecting decentralized applications to mobile wallets with QR code scanning or deep linking, is currently being tested and will soon be available in Fuse Cash before being made available as a Fuse Wallet feature for use by other projects.
This is an important feature that hugely increases utility for Fuse wallets by making actions such as staking, pooling liquidity, lending, and borrowing available.
Public release of WalletConnect can be expected before the end of August.
5. GROWTH & DEVELOPMENT
As Fuse grows, it consistently becomes easier and more attractive for communities to launch on the platform. Not only do projects get the reassurance of being part of a blossoming ecosystem, but they also benefit from an ever-improving technology stack and infrastructure designed to streamline development and onboarding.
Partnership development
A lot of this streamlining of projects is made possible thanks to collaborations forged with dedicated industry partners. Creating mutually beneficial, fruitful partnerships with projects and people that share our vision is key to our success.
We continue to focus, in particular, on developing partnerships with:
- Cross-chain liquidity providers and platforms.
- Fiat to crypto on-ramp providers (especially those that function in parts of the world that are underserved).
- Other leading layer-one protocols where it makes sense to build bridges as part of our multi-chain strategy.
- Consumer DeFi providers such as index investment products.
- Liquidity protocols wishing to launch on Fuse Network to compete with existing DeFi products.
Communities on Fuse
Every month dozens of entrepreneurs and leaders get in contact via our channels, interested in building various different token projects on the platform. And there remains an exciting pipeline of projects under development. Projects that are still building in stealth mode include an item-sharing platform in Tel Aviv and a social club in Madrid, not to mention the highly anticipated food delivery project set to disrupt the likes of Deliveroo and Uber Eats!
We are particularly excited about the CuraDAI and Cannons Creek projects because they go to the heart of one of the drivers that pushed the team behind Fuse to launch in the first place; using decentralized technology to allow for new economic models in parts of the world that have been underserved by traditional finance. We encourage more of these types of projects to get in contact and, providing they meet the qualification criteria, will work closely with them to launch MVP communities with personalized wallets integrating the latest updates to our Flutter-based wallet. The team is also on hand to advise on business models and user adoption.
As we continue to scale, the composability provided by the Fuse Wallet SDK will make it possible to greatly accelerate the speed at which communities are onboarded to the ecosystem.
Get in contact
We would like to thank our community for your continued support and encourage you to get in touch with any feedback or ideas. Team members can be reached in our Telegram group or via email at team@fuse.io
Follow our social media channels to stay updated on recent news and developments at
Thanks to Mark Smargon
