FLP
FLP is the platform's liquidity provider asset.

Overview

FLP consists of an index of assets used for swaps and leverage trading. It can be minted using any index asset and burnt to redeem any index asset. The price for minting and redemption is calculated based on (total worth of assets in index including profits and losses of open positions) / (FLP supply).
Holders of the FLP asset earn Escrowed FXDX rewards and 70% of platform fees distributed in ALGO. Note that the fees distributed are based on the number after deducting the network costs of keepers, this cost is usually around 1% of the total fees.
Note that FLP is specific to the network you mint it on, it is not directly transferrable between networks and the price / rewards to the tokens will differ between networks.
As FLP holders provide liquidity for leverage trading, they will make a profit when leverage traders make a loss and vice versa.

Minting and Redeeming

Minting FLP
  • Fees will be lower for tokens that the pool has less of, check the "Save on Fees" section to get the lowest fees
  • Ensure that you have some ALGO for network fees
  • Key in the amount of FLP you'd like to purchase on: https://algo.fxdx.exchange/buy_flp.
Fees for buying FLP will vary based on which assets the index has less or more of, the Buy FLP page will show which assets have the lowest fee.
After buying your assets will automatically be staked and you will start earning Escrowed FXDX and ALGO rewards, you can check your rewards at https://algo.fxdx.exchange/earn.
Redeeming FLP
Key in the amount of FLP you'd like to redeem at https://algo.fxdx.exchange/sell_flp. Note that there is a minimum holding time of 15 minutes after minting before you can redeem FLP tokens.

Rebalancing

The fees to mint FLP, burn FLP or to perform swaps will vary based on whether the action improves the balance of assets or reduces it. For example, if the index has a large percentage of ALGO and a small percentage of USDC, actions which further increase the amount of ALGO the index has will have a high fee while actions which reduces the amount of ALGO the index has will have a low fee.
The asset weights can be seen on the Dashboard.
Asset weights are adjusted to help hedge FLP holders based on the open positions of traders. For example, if a lot of traders are long ALGO, then ALGO would have a higher asset weight, if a lot of traders are short, then a higher token weight will be given to stablecoins.
If token prices are increasing, then the price of FLP will increase as well, even if a lot of traders have a long position on the platform. The portion reserved for long positions can be treated as stable in terms of its USD value since if prices increase the profits from that portion will be used to pay traders, and if prices decrease, the losses of traders will keep the USD value of the reserve portion the same.
If a lot of traders are short and larger weights are given to stablecoins, then FLP holders would have a synthetic exposure to the assets being shorted, e.g. if ALGO is being shorted then the price of FLP will decrease if the price of ALGO decreases, if the price of ALGO increases then the price of FLP will increase from the losses of the short positions.

Risks

Caution should be exercised when interacting with any smart contract or blockchain application. While risks are attempted to be mitigated through testing, audits and bug bounties, there is always a risk of vulnerabilities in smart contract code.