Rather than emitting FM as a reward token, Flowmatic has opted to use a call option token to facilitate volume-based trading incentives.

oFM is a call option token for FM that enables the holder to purchase FM at a discount to the market price. This redemption event will require the holder to make the purchase using USDC. This USDC will be received by the treasury and distributed as follows:

  • 25% to Protocol Owned Liquidity

  • 25% to FM Stakers reward pool

  • 25% to buyback and burn FM

  • 25% remains in Treasury

    • 10% (of the 25% remaining in the treasury) is earmarked to buy and max-stake tokens of various community partners

This distribution mechanic will help offset any sell pressure from options exercisers by contributing to POL and buying and burning FM tokens from the market.

How to use oFM

oFM can be used to buy FM at a 50% discount to market price. The oracle price at the time of exercising is used to calculate the discount and strike price used in the oFM redemption. oFM options must be exercised within 90 days from distribution.

How to get oFM

Flowmatic Volume Incentives will be emitted in the form of oFM. These incentives are based on notional trading volume.

Why use a call option token?

The goals behind introducing this option token mechanic are:

  • Counteract the mercenary farming dynamic which is commonly seen in protocol rewards

  • Incentivize staking through distribution of proceeds to the staking pool

  • Bolster both POL and the Treasury with USDC from fees through each redemption event

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