Flux and Fusion change the game for cross-chain blockchain development.

A short overview of how Fusion works, and how it will change the game for how you exchange, store and put your assets to work.

Fusion & Liquidity Pools

If Flux parallel assets are the engine powering interoperability via swapping, then Fusion is the centralized exchange powering the actual swaps. Fusion will ultimately be fully decentralized with liquidity pools controlled by smart contracts, but the technology is not there yet. No matter how much money is spent and how many companies audit smart contracts, there are hacks and exploits every week worth millions of dollars. To ensure that LPs and assets aren't sniped by the malicious actors, Fusion has pools of liquidity for Flux parallel assets locked into smart contracts.

As the next generation of contract languages emerge, including the Kadena Pact language, Fusion will wait until the right technology exists before risking the liquidity necessary to power this level of interoperability between chains. Here’s a quick summary of current and future Fusion functionality:

  • There are pools of liquidity for each parallel asset custody by Fusion. This also ensures there are enough parallel asset coins for complete liquidity, meaning at any time, all of Flux and its assets could be swapped into a single parallel asset (e.g. all Flux mainnet -> Flux-KDA) and not run out of coins. This is critical to provide instant liquidity across all chains.
  • Fusion functions like a “centralized exchange” in process, while we explore decentralized options in the near future. Fusion is not like other CEX’s because every transaction is done on-chain. This guarantees that Fusion will always be able to swap for users. Most other CEXs like Coinbase, Blockfi, Binance, etc. crash or lockout users when volatility hits the top 10 coins. This is not acceptable when users need swap services, and Fusion was built to always stay on and remain right in Zelcore.
  • Until Fusion can safely implement secure smart contracts, parallel assets will be held in custody out of necessity to allow the above functions to existing. This is temporary until Smart Contracts 2.0 arrive, but is vital to ensure the health of these liquidity pools and the novel features of Fusion.

Learn more about Flux here: runonflux.io and check out the economic model here: https://youtu.be/Ilp8Ca-dtQ0. You can also dig deep into what the Parallel Assets do with fusion here: The Secret Sauce!

Blog source for all things Flux, officially; from the Flux Team | https://runonflux.io | https://twitter.com/runonflux