4.1 FUSD: AI-Driven Algorithmic Elastic Stablecoin

Function: Serves as the only admission and settlement token, used for purchasing game tickets, calculating win/loss outcomes and rewards, distributing prize pools, and node earnings. A unified lastic stablecoin eliminates asset silos between different games, allowing value to flow seamlessly across the platform.

Price Range: Target peg price is 1 FUSD = 0.05 USDT, with an upper limit of 0.20 USDT and a lower limit of 0.025 USDT.

Price Control Mechanism: When players buy FUSD, the treasury sells FUSD at a certain ratio; when players sell FUSD, the treasury buys FUSD at a ratio. The hedging ratio is dynamically adjusted based on price deviation and reserve levels, using a smootherstep nonlinear function to smooth out price volatility, while referencing fee rates and buyback strategies anchored to actual platform GMV. Specific rules include:

• Upward price (FUSD): In the range 0.05–0.20 USDT (0.05 being the target peg, 0.2 the upper de-peg limit). When users buy FUSD, the treasury’s price-control hedging covers 50%–90% of the bought amount; when users sell FUSD, the treasury hedges 50%–10% of the sold amount.

• Downward price (FUSD): In the range 0.05–0.025 USDT (0.05 target peg, 0.025 lower de-peg limit). When users buy FUSD, the treasury hedges 50%–10% of the amount; when users sell FUSD, the treasury hedges 50%–90%.

γ Adjustment Strategy by Market Scenario

• The smootherstep^γ function is used as the hedging ratio curve, which has zero slope at the endpoints for smoothness and on-chain gas efficiency. By adjusting the γ parameter, the hedging pace can be made front-slow-back-fast or front-fast-back-slow.

Smootherstep^γ

Fee Design: Both buying and selling FUSD incur approximately a 10% transaction fee. The treasury directs a portion of this fee into the Swap1 main pool and uses another portion for hedging and buybacks, creating a reinforced liquidity pool mechanism.

Peg Mechanism & Robustness: FUSD is not a traditional 1:1 pegged stablecoin; its goal is to remain within a controlled range of 0.05–0.20 USDT. The treasury’s hedging function monitors buy and sell pressure: when buy pressure rises, it automatically sells FUSD; when sell pressure rises, it automatically buys back FUSD. The system uses a Time-Weighted Average Price (TWAP) and slippage protection, combined with a soft rate-limiter, to ensure smooth price adjustments and avoid manipulation or flash crashes. A fixed portion of each transaction is injected into the treasury and liquidity pools, building sufficient reserves and maintaining metrics like the Liquidity Coverage Ratio (LCR) and a risk buffer fund.

Risk Response: In extreme market conditions or if liquidity is exhausted, the platform can temporarily increase fees, adjust hedging parameters, or delay certain withdrawals to protect the token’s peg and users’ interests. The system does not rely on manual circuit-breakers, instead featuring an automated Soft Rate-Limiter mechanism. When the price approaches the upper or lower limits of the peg range or volatility spikes abnormally, the system will automatically:

Adjust the treasury’s hedging strategy,Increase slippage fee rates,Extend the TWAP calculation window, andSlow down the execution rate of transactions.This “soft price control” mechanism effectively absorbs short-term speculative shocks and keeps the system running smoothly.