Flamingo Finance has added GAS to the list of supported assets that can be used as collateral for Neo’s first native stablecoin, FUSD. When using GAS to mint FUSD, platform users will pay 6% interest, must ensure a 50% loan-to-value ratio, and can begin getting margin calls at 55% LTV.

Source: Flamingo Finance

FUSD is an over-collateralized stablecoin launched in Jan. 2023 with singular support for FLUND, bNEO, and fWBTC. Since the launch, Flamingo also added FLM and fWETH support for collateral. Flamingo modeled FUSD’s token structure after MakerDAO’s DAI token, which collateralizes digital assets to ensure the FUSD stablecoin’s peg is held to US $1.

To mint FUSD, users must choose to Create a New Loan, choose FUSD as the asset they’d like to borrow, and choose from the list of collateral to back their loan. Just as in traditional finance, when a user mints FUSD, they’ll need to pay an annual fixed interest rate, redeemed when they reclaim the underlying capital used to mint FUSD. The interest rates for FLM and FLUND are 1%, 3% for bNEO, and 6% when using GAS, fWETH, or fWBTC as underlying collateral.

Source: Flamingo Finance

Users can mint FUSD with an LTV up to 50% (i.e., an equivalent of $1,000 of FLUND can mint up to $500 of FUSD). However, if the market value of the underlying assets decreases, the LTV will increase. If the LTV of the loan exceeds 50%, other users can repay some of the loan (up to 50% of the outstanding loan) and earn a 5% bonus on the underlying asset they’ve purchased.

To avoid margin maintenance by an external actor, users can repay the loan as it approaches 50% LTV or add more underlying capital to decrease the LTV. Each “loan” can only be backed by one type of underlying digital asset, so the user must add more of the underlying collateral to the FUSD loan in question.

The full announcement can be found at the link below:
https://medium.com/flamingo-finance/flamingo-lend-update-now-including-gas-as-collateral-2b00c7cb7201

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