Frankencoin Shares

Frankencoin Shares represent loss-bearing equity participation in the reserve behind the ZCHF Swiss franc stablecoin. Each FCS wraps one underlying FPS equity share and confers time-weighted governance votes. Net income increases the shared backing capital, while expenses and losses reduce it.

The underlying revenue streams, expenses and collateral exposure are:

• Borrowing income: Borrowers lock collateral and mint ZCHF. The position terms charge interest up front for the remaining term; newer positions use the global borrowing rate plus a position-specific risk premium. The fee accrues to equity, while retained minter reserves are accounted separately.
• Position proposal fees: The MintingHub contract collects a 1,000 ZCHF fee into equity when a new position is proposed. Cloning an existing position does not incur another opening fee.
• Minting module application fees: The amount forwarded to ZCHF increases equity. The MinterGovernance contract can retain part of an application payment to refill its enforcement reward pool, so the entire payment need not become shareholder income.
• Liquidation gains and losses: Reserve settlement releases assigned minter reserves and settles collateral sale proceeds, debt and challenger rewards. The net result can increase equity or consume its capital; some excess proceeds can also go to the borrower.
• Share entry and exit costs: The Equity contract applies a 0.3% entry fee and a nominal 0.3% share-based exit fee, retaining backing for remaining shareholders. The FCS accounting contract returns its additional redemption discount to Equity. Share subscriptions themselves are capital contributions, rather than operating revenue.
• Savings expense: Savings interest is paid from equity and reduces the income available to FCS holders. Referral payments split the same gross interest between savers and referrers.
• Lending and real-world-asset exposure: The collateral catalogue includes crypto assets and tokenised gold such as physically backed PAXG. FCS has indirect exposure to these borrowing activities through FPS equity; collateral remains in borrower positions.

Protocol redemption depends on the wrapper's voting power and holding duration and applies fees and size-dependent discounts. Secondary-market prices and liquidity can differ from the protocol's reference valuation. FCS does not promise a fixed yield or a separate cash distribution.