FIL/FIT Exchange Rate Mechanism

• FIT, as the equity token pledged FIL, has a fluctuating exchange rate between FIL, and the exchange rate relationship between them is mainly divided into two situations

• FIT (the equity token received when depositing FIL) has a fluctuating exchange rate relative to FIL.

• The relationship between them is mainly divided into two of the following situations:

1. When the utilization rate of the staking pool is less than or equal to 90%, the exchange rate of FIL/FIT = FIL in the agreement/total number of FIT minted in the agreement. In this case, the value of FIT will increase with the continuous repayment from borrowers, corresponding to the continuous appreciation of the assets of the pledged user.

2. When the utilization rate of the staking pool exceeds 90%, the value of FIT will continue to depreciate as the utilization rate of funds increases, thus avoiding the depletion of the liquidity of the agreement funds. At this time, redeeming funds may incur certain losses, but when the utilization rate of funds returns to normal, the exchange rate will also return to normal.