Fusion is a smart-contract-based blockchain that supports interoperability between blockchains. Its goal is to allow users on different blockchains to communicate and transact with each other seamlessly. In this article, we'll explore what fusion is and how it works.
On Fusion, anyone can build and launch a smart contract to carry out a transaction between several parties, but what's unique about Fusion is that all the parties don't have to be on the same blockchain. Different people on different blockchains can carry out a transaction on Fusion without ever having to leave their blockchain.
In the white paper outlining how it would operate, Fusion described the field of blockchain financial services it was going to focus on as "Cryptofinance." The term "Cryptofinance" has since been replaced by the more popular "decentralized finance (or DeFi)," but Fusion remains one of the first players in the space. FSN is the Fusion blockchain's native token.
What is FSN (Fusion)? Quick facts
Fusion was the first organization to develop a way of implementing financial transactions and providing complicated financial services on the blockchain — widely recognized today as Decentralized Finance (DeFi).
Beyond trading digital assets like cryptocurrencies, Fusion also intends to bring real-world assets like houses and cars to its network and enable people to easily trade them over it.
How Fusion works
So what is FSN? And how does Fusion work exactly?
Dejun Qian, Fusion's founder, created the project as a way to advance the blockchains' use cases toward the so-called Internet of Value (IoV). The Internet of Value is the idea that all assets, both digital assets on the blockchain and real-world assets, should be able to be traded on the blockchain easily and securely without the help of any intermediaries. So, for example, anyone should be able to sell their house, car, or any other asset on the blockchain without involving the typical middlemen such as banks and brokers.
However, there are at least four main problems that need to be solved before a true Internet of Value can emerge. The problems are interoperability, scalability, usability, and the digitization of real-world assets. Fusion is particularly focused on solving the interoperability problem.
To solve the interoperability problem, Fusion has built a blockchain that enables people to carry out transactions by creating smart contracts. Smart contracts are code run on the blockchain that execute certain actions automatically when certain conditions are met.
Usually, to work with a smart contract, all the parties involved must be on the same blockchain and have tokens supported by that blockchain. However, with Fusion, anyone on any blockchain can work with smart contracts on Fusion using the tokens from their own blockchains.
So, let's say two people want to enter into a smart contract transaction on Fusion. One of them owns some Ethereum, while the other owns some Bitcoin. The smart contract can be set up to work with Bitcoin and Ethereum such that participants can send their Bitcoin and Ethereum to the smart contract on Fusion. The Fusion blockchain will accept Bitcoin and Ethereum, lock them up, and issue corresponding tokens to the smart contract representing the Bitcoin and Ethereum sent to it. The tokens sent can then be used to carry out transactions on Fusion and can be converted back to their original tokens at any time.
This process is known as "Cryptoasset mapping," and with it, anyone from any blockchain can enter into a financial arrangement with anyone else via the Fusion blockchain even though they don't have similar cryptocurrency assets.
Where is FSN used?
What is FSN and what is it used for? The FSN token is the native token of the Fusion blockchain. It's used to pay for transactions and power smart contracts on the blockchain. FSN also has several other uses on the Fusion blockchain, including:
Liquidity provision
You can supply FSN liquidity to a decentralized exchange (DEX) with your FSN tokens. On the Fusion blockchain, you can do this on Anyswap, the native DEX of the Fusion blockchain.
You can also provide liquidity to DEXs outside the Fusion blockchain. When you supply liquidity to a DEX, you earn a percentage of the trading fees that it charges users when they trade.
Staking
Fusion runs on a consensus mechanism known as Ticketed Proof of Stake (TPoS), where people known as validators stake tokens to become network validators. Validators help to secure the network by confirming that transactions are valid before being added to the blockchain. Validators are compensated for their contributions with FSN tokens. Anyone can become a validator on the Fusion blockchain, but you need to have FSN tokens to stake in order to do so.
Fusion’s founders and history
Fusion was founded by Dejun Qian, a Chinese businessman. Prior to launching Fusion, Dejun Qian was the founder of BitSE, a South-East Asia-based blockchain incubator that was responsible for the creation of blockchain projects like VeChain and QTUM. Dejun founded Fusion in 2017 to create the infrastructure that would enable robust digital financial services to be provided on the blockchain.
The Fusion blockchain was officially launched on June 30th, 2019, after almost two years of development and rigorous testing. The blockchain's development and growth are largely overseen by the Fusion Foundation.
At the launch of Fusion, it already had 40+ partners lined up to begin the development of digital financial services on it. These partners included organizations ranging from banks and organizations working for social good to other blockchains.
Fusion's tokenomics
What is FSN token's method of supply and distribution? The FSN token was first made available to the public via an Initial Coin Offering (ICO) in February 2018, which raised over $50 million in the first 24 hours. The ICO implemented a unique mechanism where FSN tokens were bought with Ether (ETH) tokens at a fixed price of 1 ETH = 400 FSN. The amount of FSN sold on the ICO was also capped at 51,200 ETH, or 20.48 million FSN tokens.
There are a total of about 77.21 million FSN tokens in circulation right now, according to CoinMarketCap, and there's a maximum supply of 81.92 million tokens. FSN's value is largely due to its use as the native token of the Fusion blockchain. Transactions, validation, and even smart contracts on Fusion need FSN tokens to work.
How is FSN created?
Now, about FSN's creation process. How are new FSN tokens created? FSN is created through the staking process. Staking is the process by which network users, or "validators," stake FSN tokens for the opportunity to validate transactions, add new transaction blocks to the Fusion blockchain, and earn new FSN tokens in return.
The rewards consist of a certain number of FSN tokens for every block (batch of transactions) mined as well as the gas fees (or transaction fees) collected for the transactions validated. The reward for validating a new block on the Fusion blockchain is 1.25 FSN.
The current block reward came into place after a block reward halving event in September 2021, where the block reward was halved from 2.5 FSN to 1.25 FSN. More halvings are expected to follow every two years until eventually all the FSN tokens have been mined and there are no more block rewards, making FSN, like its predecessor, Bitcoin, a deflationary currency. FSN currently has a maximum supply of 81.9 million FSN tokens, meaning only 81.9 million FSN will ever exist.
Fusion's competitors
Fusion offers such a unique service that few direct comparisons can be drawn between it and other blockchains. Nonetheless, there are a number of other blockchains vying to be the solution to the interoperability problem.
Fusion's main competitors are Cosmos and Polkadot. Polkadot and Cosmos are very similar in that they offer a core network to which all the chains that intend to communicate through them must be connected. The basis of interoperability on Polkadot and Cosmos is that all the blockchains in their ecosystem are connected to this central core, which then enables the communication between all the blockchains. This is a rather centralized arrangement, as the central core is crucial to the smooth running of the system.
The method employed by Cosmos and Polkadot is quite restrictive. They require that other blockchains join their network to enable communication between them. Furthermore, the Cosmos ecosystem and the blockchains can barely communicate with those in Polkadot's ecosystem.
Fusion, on the other hand, offers interoperability without requiring any blockchains to join its network. So how does Fusion work to make this possible? It does this through its Distributed Control Rights Management (DCRM) feature. By enabling the users of any blockchain to map their assets onto the Fusion ecosystem and use the mapped assets to interact with other users, Fusion provides a way for anyone on any blockchain to communicate and carry out transactions with users on any other blockchain. With this system, Fusion also offers a far better and far more elegant solution to the interoperability problem than its competitors.
Fusion's partnerships and investors
To further its goal of expanding the world of DeFi through interoperability, Fusion announced the launch of a partnership known as the DCRM alliance with a wide variety of organizations to aid the development of the Fusion platform and the DCRM feature in particular. The organizations in the DRCM alliance include blockchains like Fantom, educational institutions like the Kalrushe Institute of Technology (KIT), blockchain asset manager Realio, and many more. By bringing together many different organizations from different niches and combining their expertise, Fusion hopes to build even more critical infrastructure for DeFi.
Fusion's SWOT analysis
Fusion's strengths
By not requiring blockchains to connect to its own network first, Fusion eliminates a big barrier to entry for most blockchains that may fear knock-on effects in case something goes wrong with a network participant. The simplicity and all-inclusive nature of this solution could also give it an edge over its competition. Additionally, Fusion's patented "time-slice" feature allows users to "slice up" and use their assets to seek profits while managing risk in unprecedented ways.
Fusion's weaknesses
Despite its groundbreaking approach to the interoperability problem, Fusion continues to struggle for visibility in the DeFi space. This has been attributed to a lack of proper marketing of the platform and the innovative products it brings to the DeFi ecosystem. The Fusion Foundation has also been criticized by users for being understaffed and for failing to deliver on promises.
Fusion's opportunities
Interoperability is currently one of the biggest problems in DeFi. Decentralized protocols are constantly seeking ways to serve users across several multiple blockchains so as to leverage features unique to certain blockchains or just acquire more users. With more people and organizations embracing blockchain technology, the need for interoperability between them is only poised to grow. Fusion, with its focus on interoperability and innovative products, could be in a good position to fill that need.
Fusion's threats
As Fusion continues to expand and make it possible for different blockchains to communicate on its network, it exposes itself to the possibility of problems on other blockchains affecting its own network. If a blockchain's assets lose their value, for example, it might affect transactions on Fusion involving those assets negatively.
Fusion's roadmap
Having launched a stable version of its blockchain on which projects can be built by anyone, Fusion is looking to further expand its ecosystem by adding more projects to it. Currently, Fusion is focused on onboarding and assisting DEXs, like Chainge Finance and Freemoon, that run on its platform in growing and gaining traction.
In addition to bootstrapping DEXs, Fusion also plans to add more projects to its blockchain in order to attract more users. An example of this is the decentralized marketplace, Parsar, which just launched on Fusion, giving access to its marketplace to FSN token holders. Future plans include adding non-fungible token (NFT) marketplaces and support for cryptocurrency and NFT-enabled games to the Fusion blockchain.
Fusion's updates, news, and highlights
One million unique wallets
On May 7, 2022, Fusion announced that there had been one million unique wallets created on its platform. This represented a notable milestone for the blockchain on its journey to bring the benefits of DeFi to people all over the world.
Chainge Finance launch
Decentralized exchange Chainge Finance recently launched on the Fusion blockchain. Chainge Finance leveraged the cross-chain capabilities of Fusion to build a DEX that facilitates cryptocurrency swaps for its users across different blockchains. Using Chainge Finance, people can swap assets like tokens on one blockchain for those on another blockchain.
KuCoin listing
One particularly notable piece of news about FSN is its listing on the popular cryptocurrency exchange, KuCoin. The listing is an important step in making Fusion more accessible to crypto users. It could also make FSN tokens more accessible and appealing to newcomers to the cryptocurrency industry and the Fusion ecosystem.
Freemoon launch
The Freemoon exchange, a DEX that aims to become the easiest to use on the Fusion blockchain, was recently launched on the Fusion mainnet (main network). Right now, anyone can provide liquidity to any pool on the exchange and swap between supported tokens. A reward system to incentivize the provision of liquidity is planned to be implemented soon.
Fusion's time-slice feature
One of the most distinctive features of the Fusion blockchain is its "time-slice" feature. This feature is unique to Fusion, with no other blockchain having anything similar. The groundbreaking technology is even protected by a patent.
Time-slice aims to provide an extra layer of protection for assets that are on the Fusion blockchain to protect investors from losses and give them more confidence to invest on the platform. Most other blockchains and protocols, on the other hand, utilize a time-lock feature, where you lock up your tokens on a blockchain or on an exchange for a certain amount of time and get rewards based on how much you have locked up and for how long. It's really no different than the savings services offered by traditional banks and financial corporations.
Fusion's time-slice feature, on the other hand, enables users to lock up their assets on a suitable Fusion protocol for a stipulated period, earn rewards while their assets are locked up, and still have access to those assets for use elsewhere. It's based on a concept known as the time value of money. This is the idea that a sum of money has different values at different times, being worth more in the present than in the future. The reasoning behind this is that you can invest the money you have today and earn returns on it to multiply its amount, but you can't invest the money you'll receive in the future because you don't have it yet.
Building on this principle, Fusion enables you to split assets into two based on time and use one portion of them while the other portion stays in your wallet. If you have 30 FSN tokens, for example, you can split them into two time periods, one from, say, now to the end of next month, and the other from the end of next month to infinity. So now you have two portions of 30 FSN tokens. The only difference between them is that they exist in different time periods.
You can then go on to stake the 30 FSN tokens covering the rest of the month in a suitable protocol to earn returns while the 30 FSN tokens covering the period from the end of the month to infinity remain in your wallet. At the end of 30 days, you take all your rewards from staking and your 30 FSN tokens are returned to your wallet regardless of what happens to the protocol you staked them on.
Where to buy FSN tokens
You can purchase FSN tokens on any exchange that supports FSN tokens.
How to store FSN
There are three major ways to store your FSN tokens. You can store them on a centralized exchange, in a Fusion-compatible software wallet like Whallet, or in a hardware wallet like Ledger.
On an exchange
Once you create an account with an exchange that trades FSN, you can store tokens on the exchange if you intend to hold or trade the asset. However, it's generally not advisable to store your tokens on a centralized exchange for very long periods.
In a software wallet
You can also choose to store your FSN tokens in any Fusion-compatible software wallet. Whallet and MyFusionWallet are two options for storing FSN tokens. Note that, with this storage option, you're entirely responsible for the safety of your assets and may find it difficult to recover lost assets.
In a hardware wallet
You can also choose to store your FSN tokens in a hardware wallet like Ledger. Hardware wallets are physical devices in which you can store cryptocurrency. Hardware wallets, though reputed to be the safest, can be quite expensive and technical to set up and use.
How to stake FSN tokens
Anyone can participate in helping run the Fusion network and earn rewards for doing so by staking their FSN. Fusion runs on a modified version of the Proof-of-Stake (PoS) consensus mechanism known as TPOS, where anyone can choose to stake some FSN tokens for the privilege of becoming a validator.
The TPOS consensus mechanism lets people purchase a ticket for the chance of validating transactions during the period of the ticket's validity. This lowers the bar of entry so that even people who don’t have the time or equipment to become full-time network validators can participate in the validating and securing of the network from time to time.
To stake your FSN tokens and start earning rewards, just follow these easy steps. First, purchase some FSN tokens on any centralized or decentralized exchange that supports FSN tokens. Be careful to choose an exchange that supports “mainnet” FSN tokens so you don’t run into problems down the line.
When you've purchased FSN, you then create a Fusion wallet. You can create a Fusion wallet using services like Whallet or MyFusionWallet. Once you are done creating the wallet, send your FSN tokens from the exchange to your Fusion wallet. After this, head over to the staking section on the Fusion website and choose whether to set up your own node or join a staking pool with other people to share one node, then stake your FSN tokens and start earning rewards.
FAQs
Can I mine FSN?
Yes, you can. Anyone can become a miner on Fusion by staking FSN tokens for the chance to validate transactions on the Fusion blockchain and earn rewards in the form of more FSN tokens.
How is FSN used?
FSN is mainly used to pay transaction fees and power smart contracts on the Fusion blockchain. It can also be staked to aid with transaction validation and earn rewards or provided as liquidity to a DEX that supports FSN trading.
Can I buy FSN with my local currency?
Yes. You can buy FSN tokens directly with a credit or debit card in your local currency on exchanges that support it.
Can I earn passive income with FSN?
Yes. You can stake your FSN on Fusion to become a validator and earn passive rewards for doing so, or you can supply FSN to a DEX to earn rewards.
Can I swap other tokens for FSN?
Yes, you can. If you want to swap or trade other tokens for FSN instead of buying it with fiat, you can do that on any exchange that supports swapping or trading another cryptocurrency for FSN.
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