Arbitrum-based asset management protocol FactorDAO released its much-awaited staking service on Monday, days after ending a token sale on the decentralized exchange Camelot.
Last week, some on Crypto Twitter alleged that part of Factor's code was "copied" from other crypto projects.
“This project called FactorDAO $FCTR launching on CamelotDEX Is a blatant copy of SpoolFi,” popular Crypto Twitter trader Romano tweeted. “Imitation is flattery.”
Factor has since hit back on those claims. The protocol's pseudonymous founder Kurapika further told CoinDesk in a Telegram message that the allegations were started by an anonymous Crypto Twitter user referring to minor documentation mistakes accidentally left in Factor's technical documents.
"The source quoted is an anon user, referring to five bullet points we mistakenly left in one of our docs during editing, as we liked the abstraction," Kurapika told CoinDesk. "While our code is brand-new, we're not even sure what "copied code" means in an open-source environment."
"We have been working for the past nine months on a novel ERC4626 architecture, which many [decentralized finance] builders have yet to adopt. It's been audited, and [version 1] is already in beta ahead of mainnet launch next week," Kurapika added. ERC-4626 is a standard to optimize and unify the technical parameters of yield-bearing vaults for products such as Factor.
Despite the tremors, Factor has focused on releasing its staking and vaults services for users in the past week.
Staking refers to locking up one’s tokens to participate and help maintain the security of that network's blockchain in turn for rewards.
Factor will take a percentage of the deposit, withdrawal, transaction, vault management, and performance fees and redistributes 50% to FCTR stakers, and 50% to its decentralized autonomous organization (DAO).
FCTR stakers will, therefore, earn yields on staking their tokens as liquidity to the platform while the platform will use the increased liquidity to offer even more products to potential users.
Users who lock tokens for up to four years will receive the highest yields, the highest percentage of governance rights, and a higher amount of vested factor (veFCTR) – a token issued to users who lock their FCTR on the staking platform.
FCTR sees volatile trading
Last week, Factor’s FCTR token launch on Camelot prompted several Arbitrum users to criticize the initial high market capitalization and overall issuance mechanism.
Factor ended up raising $7.5 million from 4,000 unique wallets. However, every participant got FCTR tokens at the same final price of 75 cents apiece due to the issuance mechanism on Camelot.
Even though the raise initially fixed a 10 cents price floor for each FCTR token, the final pool of money raised was equally distributed with the total number of issued tokens to determine the initial price of FCTR in the open market.
But these tokens were almost immediately dumped on the open market on Sunday, falling to as low as 44 cents, DEXTools data shows.
Buying pressure after the initial dump saw tokens regain the pre-sale price of 75 cents on Monday morning, but have since seen a gradual sell-off to just over 58 cents at writing time on Tuesday.
UPDATE (Feb.28, 12:11 UTC): Adds comments from Factor founder and clarifies the rumors.
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