Raricapital
Raricapital Fuse pools
Fuse was Rari Capital’s framework for user-created crypto lending markets. Creators chose each pool’s lending terms, depositors supplied assets and borrowers paid interest. Rari Capital Infrastructure halted new deposits and wound down its Fuse operation in 2022 following an exploit.
Updated- Launch
- March 2021, by Rari Capital.
- Ethereum implementation
- The documented smart contracts used a fork of Compound’s lending protocol.
Pool terms and administrator control
- Assets and collateral
- Creators selected the crypto assets that a pool could accept and lend, along with the collateral requirements for borrowing.
- Rates and fee settings
- Creators chose interest-rate curves and pool fee amounts. Interest fluctuated with depositing and borrowing activity within the particular pool.
Pool creators retained administrator rights to change their pools’ parameters. Rari Capital also held powers to revoke those rights, replace Fuse’s underlying contracts and shut down the platform. Rari Capital Infrastructure later obtained those platform-level powers.
Borrowing interest and fTokens
Deposited assets supplied loans within the chosen pool. Borrowers first posted collateral, then borrowed other crypto assets if the pool’s conditions were met. Their interest payments funded returns for that pool’s depositors.
An fToken represented a depositor’s interest in a specific Fuse pool and the right to a proportional share of its interest earnings.
The SEC’s September 18, 2024 order concerning Rari Capital Infrastructure describes a historical platform performance fee of approximately 10% of the interest earned in each pool. Smart contracts calculated the fees automatically, while the operator retained authority to collect them.
Exploit and operator wind-down
The 2024 SEC order describes a 2022 exploit involving stolen crypto assets with a reported market value of approximately $80 million. Rari Capital Infrastructure subsequently halted new deposits, began winding down and ultimately suspended its operation of Fuse.
Rari Capital Infrastructure used approximately $2.32 million in collected performance fees to compensate harmed Fuse users, according to the order. That compensation record doesn’t establish full reimbursement of every affected position. The company accepted the order without admitting or denying its findings.
Historical pool checklist
- For borrowing terms, match the asset list and collateral requirements to the specific pool; its administrator could change settings.
- For a fee comparison, identify the fee base: the historical platform performance fee applied to interest earnings.
- For an older deposit tutorial, account for Rari Capital Infrastructure’s 2022 halt to new deposits; the tutorial doesn’t establish present availability.