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# System prepended metadata

title: Rain bridge asset liquidity idea

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## Goal 
- to create liquidity for the newly available assets from LayerZero
- incentivise people to bridge those assets from other networks

## Background
- We already have an example of a liquidity strategy, the FTSO spread strat.
- This is always making an offer with a spread around the current FTSO price
- https://github.com/rainlanguage/rain.dex.pubstrats/blob/main/src/learning/flare/ftso-spread.rain
- Of course anyone can put up this strat at any time, but we can use the leverage protocol mechanism to allow people to pool together and also to incentivise

## Process
1. The “proposer” puts up a spread strategy with some buffer for loss (more on that later).
2. The reserve token is WFLR, which is both the token that LPs deposit and also the token that the TVL of the strategy will be valued in (using the FTSO). The other token is the bridged asset.
3. The terms of the strategy are set, for example:
    1.  Min $200k amount of WFLR total required to be deposited
    2.  Runs for 6 months
    3.  Liquidation threshold is 95% of the initial deposits
4. As the strat trades back and forth between WFLR and TKN, the strategy can always be valued using the FTSO.
5. If the TVL of the strat drops below the liquidation threshold, it liquidates and LPs get their funds back.
6. To stop the strat liquidating, incentives can be deposited into the strategy, and when the strat winds down the LPs get the incentives 

## Pros to this approach
- LPs know the terms up front
- If the TVL drops below the up front agreed threshold, LPs exit
- This is a showcase for the FTSOs
- The price is the same for all sizes - even if 1B was deposited, the last token would be the same price as the first (no bonding curve)
- This is using what we are already building as part of the current grant :)