Fortress AMA January 2022
Q: Does fort treasury get a share of all fusd fees for investing $75,000? Can the team explain how it’s used to profit holders?
A: FORT return on bootstrapping FUSD is:
- FORT earns fees from liquidity pool
- FORT gets waived fees on FUSD mint and redeem
- FORT gets yield from FUSD. This grows the treasury and the backing value of FORT. This in turn can be used for buybacks/encourage buys.
- We are currently discussing an option of FUSD giving bonus yield to Fortress to as a return on the $75,000 investment, but details have not been finalized.
Q: How much did FORT treasury use to ‘bootstrap liquidity for FUSD’ which voted in the proposal? Proposal did not give details and I voted for $75,000 (not open amount). If used to bootstrap only, will it be removed later and added back to FORT treasury?
A: Fortress minted $550,000 worth of FUSD with MIM as part of the initial liquidity providing. This FUSD was used to bootstrap the FUSD-MIM Curve LP and FORT/FUSD TJ pool. We currently own $200,000 of FUSD-MIM LP. The FUSD-FORT liquidity has since been moved back to FORT-MIM.
Q: What is so special about a stable coin giving yield? There are already a large number of stable coins in the market? Our main project development has been sluggish for weeks, price collapsing, then we get stable coin yield? How is that going to turn around Fort in short order? Other projects just farm treasury for yield, how is this better?
A: FUSD is unique as it provides access to diversified cross and off-chain sources of yield while giving the user an on-chain token that can be used without giving up yield. We will prove out the value proposition of FUSD over time.
Q: What is taking so long? People have been waiting too long for answers causing increased worry and doubt.
A: Unfortunately it does take time to develop products — especially during holiday season. We had a few hiccups along the way slowing the process. We apologize for the delay and are doing our best to deliver for FORT investors. We are looking to hire more devs in our planned restructure to speed up the development process.
Q: Are there any updates on the re-org that has been announced?
A: We have a planned restructure we will be discussing with the community in the coming weeks. This includes PeachPie stepping back from multisig and being replaced by the community member Xibumi. We are trialing Cory as our first dev hire, and also are looking at an additional backend dev and a marketing lead.
Q: As a FORT holder how can I interact with FUSD?
A: You can mint FUSD from the FUSD website. You can also independently purchase FUSD from the Curve stablecoin pool and stake FUSD directly if you desire.
Q: What marketing plans are there to push FORT after the FUSD launch?
A: Our former marketing lead is not working for us anymore. Part of the reorganization efforts include seeking out and hiring a new marketing team.
Q: Are we going to have FUSD bonds?
A: Yes, we have an sFUSD 4,4 bond active. Future decisions will depend on market conditions.
Q: Is there a roadmap for FORT? (in particular beyond wrapping, yawn)
A: We’ve recently launched wsFORT and a number of website updates and optimizations, many of which were requested by the community.
Moving forward the primary focus is on completing the reorganization so that we can remove roadblocks to all future development, investment, and marketing efforts. The reorg includes hiring new developers, and a lead marketing person.
We’re also excited to be reviewing the community suggestions and the process for getting them turned into proposals so they can be voted on and added to our backlog. We have many talented members of the community who have provided us with feedback and integrating it is going to be fundamental in our future success.
Q: The world needs a privacy stablecoin. Does FUSD have any privacy options/features?
A: We believe tornado cash already fills this niche. However if there is massive demand for privacy from the community we can consider developing this.
Q: Where is PeachPie?
A: PeachPie has stepped down from leadership and is no longer on the multisig wallet.
Q: Will FUSD and/or Fort for that matter be audited? Are there any plans for that?
A: The FUSD contracts won’t hold a lot of money directly and are fairly simple so while an audit is certainly a priority, we don’t think it needs to be pursued immediately. As FUSD scales, we plan on obtaining an audit.
Q: Are there plans on adding community members to the multisig?
A: Yes, Xibumi is a community member who replaced PeachPie in the Fortress multisig wallet.
Q: Why does it take so long to implement changes despite the active community on discord?
A: Dev takes time and needs to be tested given no reversibility/money at stake. We’ve also had a number of key contributors step away from the project and are working hard to fill the void left behind.
Q: There was a discussion on how Avi will have ultimate control over the Fusd treasury and could potentially get away with our treasury. Is this true? If it is, any reassurances that Avi wouldnt and what are some measures that will take place to prevent this.
A: Every FUSD minted will be fully backed at all times. The Fort treasury will hold FUSD as a core asset as originally proposed and approved. FUSD is safu.
FUSD on-chain assets will be held under multisig, with a separate “hot wallet” for time sensitive arbitrages and investments.
Q: There has been a lot of demand for redemption. Is this something that Arce Deum is taking seriously?
A: The project docs discuss the mechanics and redemptions scenarios. In short, redemption will be triggered if the price goes below $1.
Q: What is the advantage of FUSD over simply investing the treasury into yield bearing assets?
A: Fort needs to be fully backed with stable reserve assets at all times as per the code. By converting the treasury into FUSD this enables earning yield while keeping stables in the treasury at the same time.
Q: How is FUSD Multisig setup?
A: There are four signers in the FUSD multisig — https://snowtrace.io/address/0x1487148aab4e78e87fd4c8160f53751fff3d6689#readContract
Imago, Sicut, Avraham, and Coby. The first 3 are the same wallets that are 3/4 of Fortress multisig, while Coby is an advisor to FUSD and not involved with Fortress.
Q: Can US stake/wrap FUSD and not mint?
A: The fortusd website is not open to US investors at this time.
Q: What will FUSD fees be used for? Will FORT receive these fees?
A: There are very minor (.1%) fees on minting and redemption to cover conversion costs for the stables. An arrangement for Fort to receive a return on its investment is being discussed as mentioned above.
Q: Why does this treasury wallet buy FORT and stake? 0x57E04786E231Af3343562C062E0d058F25daCE9E
A: This is the FUSD execution hot wallet for its treasury. FUSD treasury is a separate entity from Fortress. It can buy FORT from the open market as any individual investor. Buying FORT below backing is an excellent investment arbitrage opportunity for the FUSD treasury, which also helps to grow FORT price by buying it.
Q: Why doesn’t the FUSD treasury buy FORT up to backing?
A: FUSD treasury wants to invest in diverse assets and should not solely rely on FORT investments. The bulk of FUSD funds will be invested elsewhere.
Q: Will FUSD treasury vote on Fortress proposals?
A: FUSD is ultimately a stakeholder in Fortress. As any other investor FUSD could have legit needs in determined actions and decision. We plan to reach an agreement with the FUSD team going onwards. The treasury will likely not vote in community proposals.
Q: It is very cumbersome to buy FORT right now (MIM -> FUSD -> FORT). When will this be fixed?
A: We have moved the liquidity back to FORT/MIM pool. You are now able to buy FORT in Trader Joe, Matcha, or Paraswap as usual.
Q: Why was the FUSD launch article posted on Avi’s blog? Why was there no mention of Fortress DAO there?
A: FUSD is a separate entity managed by Avraham. We see FUSD as a sister project of Fortress, which will have great benefits for both of the projects. Fortress related articles will be shared on our blog.
Q: I don’t want Fortress DAO to invest treasury in FUSD. What can I do?
A: If you disagree with the direction Fortress DAO is going in, as approved by the community in proposals, you are free to sell and leave. We understand it’s impossible to satisfy everyone.
Q: Are we going to invest 100% of Fortess treasury in FUSD?
A: We have been moving slowly and scaling up to ensure that capacity is available. Ultimately we would like to fully invest the treasury, but it will take some time.
Q: How will FUSD be good for FORT in a different way from other FUSD stakers?
A: We expect FUSD to bring higher yields than the existing stablecoin yield farms. In addition, Fortress earns fees from the liquidity MIM/FUSD pool. So, the more people use FUSD, the more LP fees Fortress will receive. Another advantage is Fortress gets waived fees on FUSD — saving 0.1 with each mint and redeem.
Q: Why should FORT bootstrap FUSD if it isn’t owned by it/doesn’t get the fees
A: The fees are not the reason for bootstrapping FUSD. FUSD fees on minting and redemption are there to cover conversion costs for the stables. We believe, FUSD as a treasury asset is value-adding for the Fortress ecosystem. As mentioned, an arrangement to address this concern is being discussed.
Q: Why did FortressDAO fund the development of FUSD?
A: The vision of Fortress is to bring value to our token holders by growing the treasury via profitable investments. We believe the idea behind FUSD is a novel approach, which is expected to bring higher returns than traditional stablecoin investments. As mentioned, an arrangement to address this concern is being discussed.
Q: How will FUSD add value to FORT, compared to investing in any other yield bearing asset like other stable farms
A: Firstly, we expect higher returns from investing in FUSD vs investing in other protocols. Secondly, FORT and FUSD will be connected closely. FORT is currently a major investor in FUSD, giving it price stability as a stablecoin. FUSD on the other hand will be buying and holding a certain amount of FORT tokens, giving the token price support in bear markets. As mentioned, an arrangement to address this concern is being discussed.
Q: Does looping dilute current FORT holders?
A: Looping is an idea to grow Fortress treasury by leveraging the FUSD treasury by bonding FORT using FUSD. As long as FUSD is fully backed at all times, this presents no risks to the Fortress treasury.
Q: What else can we use FUSD for?
A: We plan to open 4,4 bonds for sFUSD. FUSD is a yield bearing stablecoin, which is expected to receive new investors as it starts bringing yield. We expect collaboration with other protocols on the Avalanche ecosystem to integrate FUSD as well.
Q: How can we trust Avi to succeed with FUSD investments?
A: Avi is an experienced crypto investor with a solid track record. He will share his investment history in a dedicated blog article — see https://deepfivalue.substack.com/p/how-our-team-makes-millions-in-crypto.
Q: The FORT/FUSD team seem to be taking on this project as a side hustle in addition to their day jobs. Why after raising 14M in a matter of weeks, do the core team not have the confidence to dedicate full time attention to a promising crypto start up with a treasury others could only dream of?
A: $14M is a fantastic treasury and we’re proud of the achievement, however it isn’t currently providing the returns for the core team would need to be able to focus on the project full time without pulling salaries from the treasury.
Q: Launching FUSD abruptly with no documentation, diagrams or infographics as to the changes coming and what to do/not (for example some confused investors staked their minted FUSD immediately unaware of the route to obtaining MIM via crv pool) shows very limited foresight from the team and respect for investors. What will be changed in the coming releases?
A: We’ve done a lot of after action reviews of the previous release. Listening to the questions from the community, understanding the concerns, as well as plenty of self reflection has led to a number of improvements in our processes. We’re working on a standard template for proposals that would include things like ownership, more specific budget/spending coverage, and other items that will help ensure the community and Arce Deum understand proposals the same way. The reorg includes hiring a marketing manager who would be responsible for managing the development and release of documentation, diagrams, and infographics.
Q: Why was the FUSD pool launched with such high liquidity? The mim/fort pool was held at very low liq for weeks and weeks, with justification that the team didn’t want whales to enter or exit with size under backing. What are the team’s plans to drive volume to FUSD/FORT pool and how will you repair the damage to community and on-looker trust from this?
A: The community had been asking for increased liquidity and the team decided that the FUSD launch and liquidity move was a good opportunity to increase liquidity. Further liquidity changes have been proposed to the community in advance. Liquidity has moved back to Fort-MIM after community approval and the FUSD/Fort pool has been retired for now.
Q: FUSD looks like a hedge-fund managed by Avraham. How is he going to be paid? Will there be management fees?
A: FUSD is a separate entity run by Avraham. There’s no direct fee charged outside of the minting and redemption fees but FUSD as an entity can make a profit.