Fluid Protocol

Fluid Protocol is a decentralized stablecoin protocol built on the Fuel network. Its core business allows users to deposit crypto assets as collateral and mint the native stablecoin USDF, with a minimum collateral ratio of 135%. Users can redeem USDF for the underlying collateral at face value at any time. The protocol employs a dynamic liquidation mechanism and a stability pool to maintain the stablecoin's peg.

The key competitive advantage lies in its high capital efficiency. By leveraging Fuel's high-throughput and low-fee architecture, combined with an algorithmic stability design, Fluid achieves a lower collateral requirement compared to traditional CDP protocols (which typically require 150% or more), allowing users to unlock more liquidity from their assets.

The market pain point it addresses is the low capital efficiency and high borrowing costs in existing DeFi lending. Users often need to over-collateralize significantly, tying up capital. Fluid reduces this friction, enabling cheaper and more efficient access to stablecoin liquidity.

In the past six months (March to September 2026), the protocol suffered a security incident in June 2026. An attacker exploited a remote code execution vulnerability in an internally ported Livewire library within the Merkle reward distribution system, stealing approximately 163,706 FLUID and 49,526 GHO. The core protocol, smart contracts, and user funds were not affected. The team rotated keys, transferred remaining funds, isolated affected systems, and committed to fully covering all losses. Reward claims were expected to resume within ten days, with rewards continuing to accrue normally during the suspension.