Fame is a decentralized finance (DeFi) platform that allows users to lend their crypto assets and earn yield for pledging them. Fame’s stablecoin system is based on the underlying UFC public chain that offers security, speed, and decentralized governance mechanism to users. USDF is a stablecoin created on the UFC public chain network. Since the price is always anchored to USD, USDF remains neutral in price fluctuations and volatility. The Fame system is connected to the UFC ecosystem, and stablecoin USDF has a vital role in the FAME platform, providing support for pledging of Fame assets.
As per the whitepaper, FAME is the native governance token of the Fame platform. FAME manages the entire platform and has multiple use cases. The token is used for ecological construction, to pay loan costs, and fulfills other operational requirements of the platform. Users can also use FAME tokens to pay for stability fees, liquidation penalties, and other lending process costs on Fame. FAME token holders get governance rights and can vote on the major decisions of the platform.
The user needs to have UFC and USDF tokens to initiate a transaction. A CDP is created after indicating the obtained tokens and the pledged UFC tokens are locked in the system. CDP (collateralized debt position) is a way to lock crypto assets as collateral. It is essential to know that only one CDP can be created for each address. Users can redeem their assets by paying a stability fee and sending USDF and FAME to CDP to repay debts.
The CDP cannot be redeemed if it becomes insolvent and the platform’s liquidation mechanism gets triggered. A liquidation mechanism is a global clearing system that automatically gets activated in an emergency situation like an illegal intrusion causing serious deviation in the prices of USDF and its anchor, and the system can no longer bear the risk. The platform ensures the system's continued operation and minimizes asset loss for users.
