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FUSE: Fair Unlock and Secured Emissions

The Anti-Rug Launch Mechanism

Why FUSE Exists

Token launches today are broken.

Most projects follow the same pattern:

  • Insiders unlock before the community.
  • Insider unlocks create predictable dump events.
  • Community takes all the risk while insiders face none.
  • Prices collapse because incentives are misaligned.

FUSE is a new issuance mechanism designed to replace vesting, align every stakeholder, and smooth supply over time – without hidden unlocks or unpredictable dilution.

Instead of releasing tokens into a chaotic free-for-all, FUSE uses a structured, predictable, and user-controlled model where:

  • Buyers choose how they want to participate.
  • Supply expands only when there is demand.
  • Redemptions and exits reduce the circulating supply instead of increasing it.

This results in a launch model that is significantly more resilient, more transparent, and far better aligned with long-term holders.

How It Works

When a user joins a FUSE round, they lock stablecoins and receive a Convertible Staking Token (CST) – a soulbound, on-chain record of their position.

The CST gives the holder three core abilities:

1. Withdraw Your Original Contribution

At any time before converting, the buyer can exit their position by withdrawing the stablecoins they entered with. This acts as a safety valve: users aren't forced to sell tokens into the market during downturns.

2. Convert to Liquid Tokens

If users want to take part in the open market – transfer tokens, trade freely, or realise gains – they convert part or all of their CST into regular tokens. Conversion gives full control over tokens but closes the protected position for that portion.

3. Earn Protocol Rewards

While a portion of the CST is unconverted, it accumulates protocol-defined rewards streamed from the reserve capital.

This transforms the primary sale from a one-shot purchase into a position that the holder can manage over time.

What Happens to the Capital?

Stablecoins contributed in a FUSE round are:

  • set aside to back each user's ability to exit, and
  • deployed into low-risk, short-duration yield strategies, specifically Aave

The resulting yield has two purposes:

  1. Reward CST holders who maintain protected positions
  2. Fund token buyback & burn events when CSTs are converted or exit

This ensures that exits create a supply-reduction effect rather than increasing sell pressure.

Gating: The Access Mechanism That Builds Demand

To join a protected issuance round, buyers must already hold (or stake) a predefined amount of the network token. This has three effects:

1. Structural Demand

Participants must acquire tokens on the open market before contributing stablecoins, creating natural pre-issuance demand.

2. Reduced Circulating Supply

Tokens staked to meet the requirement become temporarily illiquid, tightening float.

3. Unified Incentives

Those who want access to protected rounds are automatically the same people supporting the token in the open market.

This is one of the model's strongest features: secondary buyers become future primary buyers, feeding the flywheel.

Benefits for Buyers

1. Flexible Participation

Buyers control when they exit, when they convert, and how they position themselves – without being forced into illiquid vesting schedules.

2. Reduced Downside Risk

During downturns, protected buyers leave the system quietly through redemptions rather than market selling. This stabilises the price and creates a natural floor effect.

3. Rewards for Long-Term Alignment

Those who remain in protected positions accrue protocol rewards, reinforcing patience over short-term flipping.

4. Strong Scarcity Effects

Every exit reduces circulating supply:

  • redemptions take tokens out of circulation
  • conversions fund buybacks & burns

This creates a supply curve that tightens as adoption increases.

5. Healthy Secondary Markets

Secondary buyers benefit because:

  • they know exits trigger supply reduction
  • they can accumulate tokens to qualify for future protected rounds
  • sell pressure is naturally softened

6. Simplified Insider Mechanics

Under FUSE, even insiders or treasury emissions use the same model. Tokens don't unlock on a timer – they enter circulation only when there is demand. This removes the threat of large vesting cliffs.

Why FUSE Makes Vesting Obsolete

Traditional vesting creates:

  • predictable sell events
  • supply overhang
  • insider–community misalignment

FUSE solves these through structure, not time-locks:

  • insiders sell through the same protected issuance as everyone else
  • supply enters the market only when buyers want it
  • exits strengthen scarcity
  • holders naturally stay longer due to rewards + flexible exits

This eliminates the need for vesting schedules entirely.

A Launch Model Built for the Next Cycle

FUSE is a next-generation token issuance framework designed for crypto-native ecosystems that want:

  • smoother launches
  • aligned early buyers
  • reduced volatility
  • deflationary pressure on exits
  • a reliable floor mechanism
  • strong demand for primary and secondary markets
  • adaptive supply instead of vesting cliffs

It transforms the token launch from a one-time event into a continuous, self-reinforcing cycle where:

Demand drives access → Access drives participation → Participation drives scarcity → Scarcity drives demand.