FStocks — Fractional Reserve Real-World Asset
1. What Are FStocks?
FStocks are synthetic, fractional-reserve derivatives that mirror tokenized real-world assets. Each FStock tracks the value of a specific on-chain RWA token, such as TSLAx, which represents Tesla stock issued by Backed Finance.
Instead of merely holding TSLAx, users can interact with FTSLA, its Fedz synthetic twin. FTSLA behaves like Tesla stock within The Fedz ecosystem — tradable, lendable, and composable — but issued through a fractional-reserve liquidity structure that allows more liquidity with less locked capital.
2. Why Do We Need It?
The goal of The Fedz is to expand stable, efficient liquidity across DeFi. While tokenized RWAs like TSLAx bring traditional assets on-chain, their liquidity remains shallow and capital-intensive — every token is 1 : 1 backed.
FStocks solves this limitation by introducing monetary elasticity:
They multiply existing RWA liquidity without new fiat inflows.
They create secondary synthetic markets that deepen trading and lending depth.
They feed the FUSD ecosystem, where FStocks act as collateral and yield sources.
In short, FStocks turn passive RWA tokens into productive monetary instruments that can power the expansion of FUSD and other Fedz assets.
3. How It Works
Each FStock pair begins with a Private Liquidity Pool (PLP) that links the original RWA token to its Fedz synthetic derivative.
Let’s follow the path for FTSLA ↔ TSLAx:
3.1 The FTSLA ↔ TSLAx Private Liquidity Pool (PLP)
Liquidity providers deposit TSLAx and FTSLA into a dedicated PLP.
Based on the size and composition of the pool, the protocol applies a fractional reserve ratio (for example 30%).
The Fedz can mint additional FTSLA against this reserve, expanding circulating liquidity.
Arbitrage and swaps inside the PLP maintain a tight price relation between FTSLA and TSLAx.
This pool forms the monetary base for the synthetic market.
3.2 FTSLA ↔ FUSD Public Pool
Once circulating, FTSLA is paired with FUSD in a public market on Uniswap v4 or other DEXs. This allows open trading, arbitrage, and on-chain valuation of Tesla exposure in FUSD terms.
The PLP anchors the price to the underlying TSLAx.
The public pool provides market depth and accessibility for everyday traders.
Together, they form a two-tier system — private stability + public liquidity.
4. Why the Price Keeps Its Peg in a Fractional-Reserve Model
The Fedz maintains the peg through incentive alignment and liquidity priority rather than full collateralization.
Arbitrage Window – If FTSLA < TSLAx, The Fedz can arbitrage by buying FTSLA cheaply and redeeming through the PLP, and if the deposit continues, they will be incentivized with extra bonuses to do so.
Sequential Liquidity Access – The PLP releases liquidity in a queue to avoid panic withdrawals.
Dynamic Reserve Ratio – The reserve adjusts to volatility; when markets stabilize, the system expands again.
The result: a self-correcting peg that depends on liquidity coordination, not over-collateralization.
5. What Happens if FTSLA Drops and Deppegs?
If FTSLA diverges significantly from TSLAx:
Automatic Contraction – The protocol can pause new FTSLA printing and reduce the reserve multiplier.
Arbitrage Incentives – Traders can swap discounted FTSLA for TSLAx in the PLP, restoring balance.
This structure transforms potential crises into controlled, measured adjustments.
6. Why The Fedz Can Supply Higher Liquidity with Less Capital
Traditional DeFi requires 1:1 collateral — every token backed by another of equal value. The Fedz uses fractional-reserve dynamics inspired by real-world banking but executed transparently on-chain.
Because only a portion of assets must remain liquid at any time:
Each TSLAx token can support multiple FTSLA units.
The effective capital efficiency (liquidity/reserve) rises by a factor of 3× or more.
Yield generated by deployed FTSLA further reinforces reserves, enabling sustainable growth.
This creates a self-amplifying liquidity engine: real assets seed the system, synthetic derivatives multiply liquidity, and on-chain yield recycles back into stability.
→ In Summary
FTSLA is more than a Tesla derivative — it’s a proof of concept for a new financial layer. Through FStocks, The Fedz demonstrates how fractional-reserve design can transform tokenized real-world assets into a dynamic source of liquidity, yield, and monetary expansion.
FTSLA = TSLAx Liquidity × The Fedz Monetary Multiplier
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