Design Principles

Universal Fungibility

Universal fungibility is the driving mission of Fabriq.

The idea of universal fungibility is a simple one: exchange any asset for any asset, anywhere, at any time. Universal fungibility is an ideal to strive for, however—not something to be achieved. There is a superficial problem: no one accepts your pet rock as a materially valuable asset. We don’t want to enable anyone to unload worthless ERC20 tokens fabricated from thin-air.

As a useful definition and approximation of the goal of universal fungibility, we can say that for some benchmark asset x_0 and some set of assets X = {x_1, …, x_n} that for any two i and j, i ≠ j, i,j > 0 and E{x_j → x_0}, and X{x_j → x_0}: X → X that for a quantities l, m, and n, N, E_{x_i → x_0}(lx_i) = E_{x_j → x_0}(mx_j) = n*x_0, or alternative with exchange functions function E_{x_i → x_j}, E_{x_j → x_i}, that E_{x_i → x_j} \circ E_{x_j → x_i} is approximately the identity.

Universal fungibility arises as a property of the marketplace. Markets need to have volume, low volatility, and high trust. Namely, universal fungibility requires a solid and healthy market to exist. Universal fungibility is then for us a mission to work toward. We invite you on that mission.

Incentive Compatibility

Incentive compatibility is core to how Fabriq is designed.

Incentive compatibility is a property of a game theoretic mechanism where the mechanisms design incentives all participants to be honest about preferences. In many cases in the current on-chain ecosystem applications are structured without incentive-compatibility which leaves room for value to be unintentionally lost by participants and gained by others.

Given that the underlying intent mechanism is incentive-compatible, applications which make use of this intent mechanism will gain the property of incentive compatibility. With incentive compatibility, the value of applications to the participants will be much stronger--LVR may disappear, MEV reduced. This is a large design space, yet relatively unexplored. Come with ideas and build with us!