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A list of token types that can be used in Folks Finance
A wrapped token is a cryptocurrency token pegged to the value of another crypto. It’s called a wrapped token because the original asset is put in a wrapper, a kind of digital vault that allows the wrapped version to be created on another blockchain.
What’s the point? Well, different blockchains offer different functionality. And they can’t talk to each other. The Bitcoin blockchain doesn’t know what’s happening on the Ethereum or Algorand blockchain. However, with wrapped tokens, there can be more bridges between different blockchains.
Liquid tokens allow users to avoid locking their liquidity while participating in the consensus mechanism classic of PoS blockchain. On Folks Finance we built ALGO Liquid Governance which allows users to participate in the Algorand Governance without losing access to their liquidity using to a mint process that sends gALGO to those users who have deposited ALGO.
A stablecoin is a crypto-asset pegged to an asset that has a stable price, such as a fiat currency or precious metal. Stablecoins were developed to avoid the high levels of volatility which are common in the cryptocurrency market.
On Folks Finance users have access to USDC and USDt stablecoins.
In order for automated market makers (AMMs) like Tinyman or Pact to function, crypto-asset liquidity providers must contribute crypto-asset pairs to liquidity pools. When tokens are deposited into a crypto-asset liquidity pool, the platform automatically generates a new token that represents the share the depositor owns of that liquidity pool. This new token is known as a liquidity provider (LP) token and it can be used in a myriad of functions both on the issuing AMM platform and on other decentralized finance (DeFi) apps. This has the potential effect of multiplying the accessibility to liquidity within the DeFi ecosystem.
The Folks Finance Deposit Token: fToken, is the asset distributed to users following a deposit for each asset (i.e. fALGO, fUSDC) and represents that user's ownership. fTokens are instrumental to the system's operations and are minted by the protocol itself. It is possible to use the fToken to withdraw the deposit or use it as collateral to obtain a loan. The fToken is designed to help calculate the interest accrual on the deposited asset.
The folks rewards token: frToken, is the asset distributed to users for performing qualified operations on the Folks Finance protocol. frToken is instrumental to the system's operations and are minted by the protocol itself. They are distributed when users repay their loans' interests or provide liquidity through Lock & Earn. These tokens should be traded with the rewards token through the Rewards Aggregator.