Fountain: A Layer 1 Smart Contract Platform Based on PoSA Consensus

What is Fountain

Friends, imagine when we deposit money or take out loans at a bank. The Fountain Protocol is like a decentralized bank in the blockchain world, mainly operating on the Oasis network. It is an algorithm-based money market system aiming to bring a complete lending and credit system to the decentralized finance (DeFi) sector.

Simply put, if you have some cryptocurrencies that you don't need for now, you can deposit them into the Fountain Protocol, just like putting money in a bank, and you'll earn interest. If you need funds, you can also use your crypto assets as collateral to borrow other cryptocurrencies from the Fountain Protocol. To ensure lending security, you usually need to provide collateral worth more than the amount you borrow—this is called “over-collateralization.”

Fountain Protocol has another special feature: it not only allows you to borrow other crypto assets, but also lets you mint “synthetic stablecoins” using your collateral. Stablecoins are cryptocurrencies with relatively stable prices, usually pegged to fiat currencies like the US dollar. The synthetic stablecoins of Fountain Protocol are not backed by fiat, but by a basket of cryptocurrencies, providing extra protection for the protocol.

Tips:

• Decentralized Finance (DeFi): Like an open financial system without central banks or financial institutions, where all transactions are automatically executed by smart contracts on the blockchain.
• Oasis Network: A high-performance blockchain known for its fast and low-cost transactions. Fountain Protocol chose to operate on it to provide efficient services.
• Smart Contracts: Self-executing contracts stored on the blockchain that automatically execute agreements once preset conditions are met.

Note that in the crypto space, there are multiple projects named “Fountain” or “Fountain Protocol,” which may have different features and tokens. This introduction is mainly based on the whitepaper information of Fountain Protocol (an DeFi money market system).

Project Vision and Value Proposition

The vision of Fountain Protocol is to enhance the capital efficiency of crypto assets and provide users with a one-stop DeFi asset management solution. Imagine your crypto assets are no longer just sitting idle in your wallet, but can be fully utilized to create more value for you.

The core problem it aims to solve is that in traditional DeFi lending, users may not be able to fully utilize their collateral assets. Fountain Protocol increases asset utilization by allowing users not only to borrow, but also to mint synthetic stablecoins. In addition, by operating on the Oasis network, Fountain Protocol aims to provide a fast, low-cost trading environment, enabling users to participate in lending activities more efficiently.

Compared to similar projects, Fountain Protocol’s unique feature is its ability to use collateral to mint synthetic stablecoins, offering users more flexibility and potential earning opportunities.

Technical Features

The technical core of Fountain Protocol is an “algorithmic money market system.” This means that lending rates are not set by a central authority, but are automatically adjusted by an algorithm based on market supply and demand. It’s like a smart vending machine, where the price of goods (cryptocurrencies) changes in real time depending on how many people want to buy or sell.

The protocol ensures lending security through an “over-collateralization” mechanism. For example, if you want to borrow $100 worth of crypto, you may need to pledge $150 worth of another crypto. This way, even if the market fluctuates and your collateral value drops, the protocol has enough buffer to protect lenders’ interests.

Fountain Protocol is built on the Oasis network, which is known for its high throughput and low transaction fees, helping to ensure the protocol’s operational efficiency and user experience. To ensure system security, Fountain Protocol has also undergone rigorous audits by well-known security firms in the industry.

Tokenomics

Regarding Fountain Protocol’s token, the whitepaper and some materials mention the “FTP token.” However, on some crypto data sites, there is also a token called “Fountain (FTN)” running on the Ethereum platform and associated with a content ecosystem. This suggests that there may be multiple projects using similar names and token symbols, so please be sure to distinguish carefully.

For Fountain Protocol (DeFi money market), the main uses of its token (FTP) include:

• Governance: Token holders can participate in protocol governance and vote on important decisions, such as adjusting interest rate parameters or supporting new types of collateral. It’s like shareholders of a company voting on the company’s future direction.
• Staking and Lending: Users can stake FTP tokens or lend them out to earn additional returns.
• Arbitrage Trading: As a cryptocurrency traded on the market, the price of FTP tokens fluctuates, providing opportunities for some traders to arbitrage by buying low and selling high.

According to CoinMarketCap, a token called Fountain (FTN) is issued on Ethereum, with a total supply of about 2.2 billion and a current circulating supply of about 88 million. But again, this may not be the same project as the FTP token of Fountain Protocol (DeFi money market).

Tips:

• Tokenomics: Refers to how a crypto project designs its token issuance, distribution, usage, and burning mechanisms to incentivize participants and maintain the health of the ecosystem.
• Governance Token: Tokens that allow holders to participate in project decision-making through voting.
• Staking: Locking up cryptocurrency in the network to support its operation and earn rewards.

Team, Governance, and Funding

Governance Mechanism: Fountain Protocol is committed to building a user-driven platform where token holders can participate in platform governance to ensure transparency, fairness, and inclusiveness. Any user with suggestions for protocol improvement can submit proposals, which are then voted on by token holders to decide whether to adopt them.

Team and Funding: Notably, a Web3 operating system company named “Fountain” recently announced the completion of a $3.5 million seed round. This company focuses on providing Web3 operational tools for institutions to help them securely manage and automate on-chain workflows. Their core team has over 20 years of experience in DeFi and AI, and the founder and CEO is Morgan Lai. Although this may not be the same project as the Fountain Protocol (DeFi money market) mainly introduced here, it shows that the name “Fountain” is used by different teams in the blockchain field.

Tips:

• Governance: In blockchain projects, governance refers to how community members jointly make decisions and manage project development.
• Seed Round Funding: The first formal investment a startup receives from investors at an early stage of development.

Roadmap

The Fountain Protocol whitepaper mentions a roadmap section, which usually lists the project’s development goals and key milestones at different stages. However, there is currently no detailed public information about the specific historical milestones and future plans of Fountain Protocol (DeFi money market). As for the Web3 operating system Fountain project, it is currently in private testing and collaborating with some large hedge funds and market makers.

Tips:

• Roadmap: A blueprint for a project’s future development plan, usually including key stages such as technical development, product release, and community building.

Common Risk Warnings

Investing in any cryptocurrency project comes with risks, and Fountain Protocol is no exception. Here are some common risk reminders:

• Technical and Security Risks: Although Fountain Protocol has undergone security audits, technical risks such as smart contract vulnerabilities and hacking attacks still exist. Blockchain technology itself is constantly evolving, and unknown technical issues may arise.
• Economic Risks: The cryptocurrency market is highly volatile, and the price of FTN/FTP tokens may fluctuate sharply. The value of collateral assets may also drop significantly, leading to liquidation risks. The protocol’s interest rate model may not perfectly adapt to all market conditions.
• Compliance and Operational Risks: Global regulatory policies on cryptocurrencies are still unclear, and future policy changes may affect project operations. The execution ability of the project team and community activity will also impact the project’s long-term development.

Please remember that cryptocurrency investments are highly risky, and you may lose your entire investment.

Verification Checklist

Before delving into a project, here are some key pieces of information you can verify yourself:

• Block Explorer Contract Address: For the Fountain (FTN) token on Ethereum, you can look up its contract address on block explorers like Etherscan to verify its authenticity and on-chain activity.
• GitHub Activity: Check the project’s GitHub repository to understand its code update frequency, developer community activity, and code quality. The Fountain Protocol whitepaper mentions a GitHub link.
• Official Website and Whitepaper: Carefully read the project’s official whitepaper and website to get the most accurate project information.
• Community Activity: Follow the project’s Twitter, Discord, Telegram, and other community platforms to gauge the level of discussion and interaction between the team and the community. The Fountain Protocol whitepaper also mentions community links.

Project Summary

As a decentralized money market system running on the Oasis network, Fountain Protocol aims to improve capital efficiency and optimize DeFi asset management by providing crypto asset lending and synthetic stablecoin minting services. It automatically adjusts interest rates through algorithms and uses an over-collateralization mechanism to ensure system security.

However, it is especially important to note that there are multiple projects named “Fountain” or “Fountain Protocol” in the crypto space, and the use of token symbols “FTN” and “FTP” is also confusing. This requires potential participants to carefully verify information sources during research to ensure you are learning about the specific project you are interested in.

The governance model of Fountain Protocol gives token holders the right to participate in decision-making, which aligns with the spirit of decentralized projects. Although its whitepaper mentions a roadmap, specific details still need to be further checked in official materials.

In summary, Fountain Protocol provides an interesting lending and stablecoin solution for the DeFi sector, but like all crypto projects, it also faces multiple risks including technical, market, and regulatory challenges. Be sure to conduct thorough independent research (DYOR) before making any decisions, and remember this is not investment advice.