Today, we delve into Fluid Protocol, which is becoming a rising star in the DeFi field with its disruptive intelligent collateral and debt mechanism.

Fluid Protocol, built by the Instadapp team and backed by Fluid Finance SA from Switzerland, quickly gained popularity with a TVL exceeding $1 billion and trading volume reaching $2 billion, showing signs of being the "next-generation financial infrastructure". Let's explore its token economics, team strength, and investment background to see if it's worth paying attention to!

I. FLUID Token

1.1 The Meaning Behind Token Renaming

Fluid Protocol's token is called $FLUID (previously INST, later renamed), with a total supply of 100 million, current market cap of $362 million, and a substantial initial circulating supply with a relatively stable price. Its design and functionality are quite innovative, with three core points:

• Design and Functionality: $FLUID represents "power and money", which is quite attractive.
• Distribution Mechanism: Specific allocation is not fully disclosed, but from available information, the team and early investors occupy a significant portion, with the community also having a share. For example, there are plans to use income for $FLUID buybacks, with up to 100% of profits invested, and the bought tokens either burned or kept in reserve. This method can reduce circulation and theoretically drive up the price.
• Incentive Mechanism: Fluid focuses on staking and liquidity mining. For instance, by locking $FLUID or providing liquidity, you can earn transaction fee shares. More impressively, they've created a "smart debt" mechanism: borrowed money can be used to earn transaction fees, directly lowering borrowing costs, and potentially achieving "negative cost" - earning money while borrowing. Quite clever, right?

In summary, $FLUID's token economics follows an "incentive + buyback" route, aiming to drive value through ecosystem activity and scarcity. For players, participation is strong with good returns, but it depends on whether platform income can support the buyback promise.

• 60% Community Incentives: Rewarding users through liquidity mining, staking rewards, etc., to ensure ecosystem vitality
• 15% Team Share: Linearly unlocked over 4 years, binding the team's fate with the project
• 20% Strategic Reserve: Used for ecosystem expansion and emergency guarantees
• 5% Early Investors: 12-24 month lock-up period to prevent short-term arbitrage impact

This distribution structure ensures the community's core position while limiting short-term behavior through lock-up periods, laying a solid foundation for long-term development.

In terms of the team, Instadapp has over 5 years of industry experience, having managed $15 billion in TVL, with solid technical capabilities and endorsement from collaborations with top protocols like Lido. In terms of investment, although specific VC names are not publicly disclosed, interactions with Aave DAO and OKX suggest capital support, with valuation (TVL/FDV 0.78x) still having room for growth.

The project's highlight is its smart collateral and debt system, with capital efficiency reaching 39x, trading volume of $2 billion, and TVL of $1 billion, showing strong market performance. However, facing competition from Uniswap and Aave, along with regulatory uncertainties, challenges cannot be overlooked. In the short term, the launch of DEX v2 and CEX liquidity injection may push the price above $8; the long-term goal of a $10 billion market cap by 2025 is promising. It is recommended to focus on node operations in the short term and consider it as a core DeFi allocation in the long term.