FBR
A token with no claim on anything, that can be seized to cover somebody else's bad debt, that costs to leave, and that can be worth nothing without a borrower or a depositor noticing.
Spec v0.9.1, reviewed 2026-09-08
FBR is distributed for using the protocol. It is not sold, it does not govern version 1, and it never pays the Stability Pool yield, which is borrower interest and nothing else. What it does carry is a set of exposures that a holder should read before staking anything.
The mechanism is on FBR internals and the user path on FBR and sFBR.
It carries no claim on anything
Risk
FBR gives no right over fyUSD, over sfyUSD, over the collateral, over the reserve or over the protocol. No vote that changes a rule, no share of profits as a legal entitlement, no claim against any company, foundation or person, because there is no company, foundation or person behind it.
Rules R-19.14, R-15.4.1 (14)
The share of revenue it receives is a formula in deployed code. That formula goes to zero in three cases, all automatic: before the first season opens, while any branch carries bad debt, and in the terminal mode. It is also zero whenever the pools hold less than 40% of the debt, and it reaches its maximum of 15% only above 70%.
And even when it is positive, it fills a reserve first. Nothing buys FBR until the fyUSD reserve holds 2% of the debt.
Staked FBR is what absorbs bad debt after the reserve
This is the exposure most holders will not have priced. Staking is not only a claim on a flow; it is the second layer of loss absorption in the protocol.
When a branch has bad debt and the reserve is empty, after 24 hours anybody may seize staked FBR and auction it, with the proceeds burning the debt. The seizure takes the same fraction of every staked lot, the protocol's own lot of 21,000,000 FBR included, in no order at all. The ceiling is 30% of the whole stake over any rolling 7 days, counted across every branch together rather than per branch, and one branch cannot open a second seizure within 7 days.
Risk
You are in that base from your first day. There is no threshold of private staking below which the protocol's own lot absorbs the loss on your behalf, and no ordering that puts anybody last. Your stake can be taken to cover a loss on a branch you never touched.
Unsold FBR is returned when the auction closes, so the realised loss is usually smaller than the seizure, but the amount that can be taken is 30% of the total over a week, and the only opt-out is not staking.
A stake that has been requested for withdrawal is still seizable until it is actually withdrawn. That is deliberate: it removes the race to the exit in front of an announced seizure.
The layer is also thin, and the specification says so rather than presenting it as insurance. The protocol's own lot at 30% is a few hundred thousand dollars at a plausible price, against branch ceilings that reach $37,000,000 in total.
Leaving costs what you refuse to wait
The fee falls continuously with the time you wait, along straight lines between four fixed points. There are no steps to hit and no cliff to miss.
| You wait | Withheld and given to the stakers who stayed |
|---|---|
| Nothing | 70% |
| Twelve hours | 60% |
| A day | 50% |
| Two days | 40% |
| Three days | 30% |
| Five days | 15% |
| 7 days | Nothing |
An hour of waiting is worth about 0.83 points on the first day, 0.42 points until the third, and 0.31 points until the seventh. The curve is fixed in the constructor and read from the elapsed time. There is no function that accelerates it and no fee that buys a shorter wait.
That shape is also what removes the race in front of an announced seizure: at the moment a seizure becomes possible the fee is still 50%, against a seizure ceiling of 30%, so leaving early costs more than staying and being seized.
The grid is genuinely a grid rather than a delay dressed as one: waiting 7 days costs nothing at all, so a reward delivered as staked FBR is liquid at seven days.
Risk
A stake on its way out contributes nothing to the revenue share, the pool boost, the redemption shield or the season multiplier, from the moment the request is made. If the withdrawal window passes without being taken, the amount returns to the stake dated from that day, which means the age that gives it weight starts again from 25%. That return is performed by a function anyone may call, so it does not depend on the holder noticing.
Taking part of a stake out no longer restarts the clock on the rest. The age of what remains falls by the fraction withdrawn, so a holder who takes out a tenth keeps nine tenths of the age they had built.
Emission against demand in the first year
The first year distributes 17,960,000 FBR, close to a fifth of the supply, with the first season alone at 4,408,000 FBR. Both are asserted at deployment against ceilings of 6.65% and 17.96%, which is the only thing that bounds them, and those ceilings are a third above what the protocol this schedule is modelled on distributed over its own first year.
Risk
There is a step down after the fourth season, and it is large enough to be worth knowing before it happens rather than after. The first four seasons run on a steeper profile than the tail: they pay 4,408,000 FBR, 4.117 million, 3.845 million and 3.590 million, and the fifth pays 2,053,000 FBR, which is 43% less than the fourth. Year two distributes 7,430,000 FBR in total and year three 5,650,000 FBR.
Anything whose return is quoted in FBR per unit of deposit falls by roughly that fraction at the same moment, and the constant that produces it is in the deployed code from the first day.
Against that, the demand created by using the protocol is a function of the debt: staking obligations for the pool boost and the redemption shield are quoted per fyUSD, so at a few million dollars of debt the stock they lock is a small fraction of what is emitted.
Risk
In the first year the protocol distributes several times more FBR than its own use locks, and the gap is wider under this schedule than under the one it replaced: 17,960,000 FBR against a stock of a few million locked by boost and shield obligations at an early debt level. Whoever receives the difference either holds it or sells it, and nothing in the contracts prevents the second.
The counterweight the design does have is that the vault class is delivered staked rather than liquid, so a substantial part of each season is locked for at least 7 days before it can be sold at all.
What the buy-back does, and when
The buy-back is the one mechanism that puts a bid under FBR with the protocol's own revenue. It is worth knowing how long it takes to matter, because the honest answer is years.
It buys nothing at all until the fyUSD reserve has reached 2% of the debt, and that reserve starts at zero and fills only from revenue. Against the emission of each year:
| Buy-back, as a share of that year's emission | |
|---|---|
| Year one | Close to nothing: the reserve is filling |
| Year two | At most 2% |
| Year three | Up to 13% |
| Year four | 27% to 37% |
| Year five | It overtakes the emission |
The crossing arrives in the fifth year, not the third, and it arrives partly because the team's vesting of 6,670,000 FBR a year runs from month 12 to month 48 and then stops.
Risk
A second thing reduces what a buy-back is worth to a holder. The protocol's own lot carries a large share of the staked weight early on, and its share of every purchase is burned rather than credited to anybody: at twelve months about 90% of each buy-back is burned. That is good for the supply and worth nothing to the holder reading the buy-back figure.
The only mechanical floor under the price of FBR in the first year is zero. Nothing in the contracts buys it, nothing redeems it, and nothing owes anything against it.
The season counters are counters
Points are non-transferable numbers written on-chain by the modules a user touches. They are converted into FBR by a formula when the season closes, with no list, no root, no rate anybody sets and no human act at any stage.
Risk
A counter is not an entitlement, not an asset and not a debt. Its value depends entirely on the budget of the season it belongs to, on how many other people earned counters in the same class, and on what FBR is worth when the stream releases. All three are unknown while the counter is being earned.
A class that nobody earned carries its budget forward rather than distributing it, which means a season's figures are not known until it closes.
Two things a holder should watch for
The version 2 vote is capped per address at 10% of the private weight, so no single holder decides an election on their own. That is a bound on concentration, not a guarantee of a good outcome: the endowment it releases is the largest single decision the token can make, and it can be made once.
Risk
Nothing prevents a third party from building a contract that stakes on users' behalf and issues a liquid receipt against it. Such a contract would escape the exit grid, because the stake would never leave from the holders' point of view, and its holders would lose the individual pool boost and the individual redemption shield, both of which are computed per address. It is the obvious route around the grid, it is not blocked by anything, and a holder should understand which of the two positions they are actually in.
The protocol's own lot is large
21,000,000 FBR is staked by the protocol itself at deployment, with no withdrawal function. It never votes and never farms, it is seized on exactly the same terms as everybody else, and its share of every buy-back and every exit fee is burned rather than credited.
Risk
At twelve months that lot carries about 90% of the staked weight, so that much of every buy-back is burned instead of reaching private stakers. Burning reduces supply, which is not nothing, but a staker reading a buy-back figure should understand how little of it arrives in their own stake. The fraction shrinks as private staking grows.
What happens to everyone else if FBR goes to zero
Nothing.
Guarantee
No price regime, no threshold, no cap, no rate, no activation criterion and no risk parameter reads FBR, its price, its supply or the staked amount. A failure in any FBR contract cannot make a core operation fail: the core writes to the counters inside a guarded call and reads staking weight through a bounded call that defaults to zero. The Stability Pool yield contains no emission at all.
Rules R-19.12.1, invariants 52 and 70
At zero, a borrower pays the same rate against the same threshold, a depositor receives the same interest, the peg module works identically, and the second loss layer is worth nothing while the first and the third are untouched. That is the design intent, and it is the reason FBR can be described plainly rather than defended.
Liquidity vaults
What a concentrated range actually costs when the stock falls, why the position becomes all stock below its lower bound, what the lock means, and why this liquidity is temporary by design.
What is measured before launch
Sixteen measurements that have to come back before any constant is frozen, what each one is worth, and what changes in the design if it comes back badly.