FLP Tokens

A user can come to the Flash protocol and deposit any of the 4 tokens (BTC, ETH, SOL, USDC) into the pool by minting FLP. In return, the user will receive FLP tokens at a NAV corresponding to the value of their principle deposit.

When a depositor mints FLP, they lose exposure to the specific tokens that they deposited into the FLP, and instead gain exposure to the index basket and net PnL of trades against the pool. Given the above framework, if a user deposited only BTC into the pool, their exposure would transition into roughly 25% SOL, 20% BTC, 10% ETH, and 45% USDC if the pool was at optimal target ratios for all assets.

All FLPs hold the same concentration of asset exposure. Their assets have a min and max ratio limits to make sure that they remain within in a balanced exposure to the market. This exposure is constantly shifting as new FLP is minted or existing FLP is redeemed and depends on assets being deposited and withdrawn as well as price action of each asset.

Every time a user mints/redeems FLP, they pay a small fee to do so. This fee is dynamic in nature and varies according to the capitalization ratio of the assets within the index. When an asset in the pool is below its target (i.e. actual < target) the pool is inherently underweight this asset. Actions that increase the spread between actual and target incur a higher fee. Similarly, actions that decrease the spread will be charged lower fees.