Nectar (NEC) is a utility token and deflationary administrator serving the DeversiFi exchange. NEC holders enjoy voting rights in the financial obligation program, discount transaction fees on DeversiFi, and an ever-evolving array of features designed to promote convenience, adoption, and value. NEC, DeversiFi, and the broader ecosystem. DeversiFi is a professional, self-maintained broker built for serious traders.
What is NEC Token?
Nectar token (NEC) was designed in 2017 and launched in early 2018 with the aim of encouraging liquidity in markets traded on the Ethfinex digital asset exchange platform. Ethfinex’s original vision was to decentralize its platform in two parallel streams: Technology and Governance.
The Nectar token is instrumental in promoting and facilitating this transition. This document sets out the launch vision for Nectar 2.0, with a series of basic design enhancements that allowed Nectar to realize its goals successfully.
The token is also used to make governance decisions through the community portal at Nectar. Community. For example, NEC owners have been issued a provisional voting token that they can then use to vote on new tokens on an exchange. There have been 14 such voting rounds resulting in more than 40 new tokens being added to Ethfinex.
Token design goals
There are many important modeling and modeling considerations involved in the token design. However, the following two considerations are at the forefront when designing the mechanisms and benefits in the new Nectar 2.0 model.
Simplicity
The design of the token should be simple. A cryptocurrency token adds new economic dynamics to any system with which it interacts. Securing these new offers is clear, thus improving the token’s efficiency in achieving the goal. Token holders (mainly traders in this case) must be able to understand the model and calculate its value independently. Token design can still contain many aspects and utility, but they must be complementary and independent, rather than interacting in complex ways.
Incentive Alignment
Nectar’s primary goal is to amplify the network effects that exist around liquidity on exchanges by aligning traders’ preferences (especially liquidity contributors as is a market maker) with an exchange. Exchanges in the past were relational businesses, with customers choosing to trade at the market or location where they had the best relationships and offers. Blockchain allows these incentives and relationships to be systematized, transparent, and immutable. This results in benefits from long-standing loyal relationships with a specific platform like DeversiFi. The Nectar is the vehicle to represent this loyalty. Therefore, it must encourage the behavior of bringing liquidity and trading volume to DeversiFi and must reward long-term traders and Nectar token holders when the platform is successful.
Buy & Burn Model
NEC’s supply will decrease over time by adopting a buy & burn model. Once a week, NEC tokens will be purchased and used up to 50% of the revenue from DeversiFi transaction fees, through a transparent and public auction mechanism. The NEC codes purchased will then be burnt. The percentage of revenue used increases as daily transaction volume increases, increasing the effectiveness of these acquisitions. The redemption will be operated using smart contract auctions similar to the ones developed and implemented by Melon Protocol.
What is NecDAO?
Nectar is a decentralized autonomous organization to develop and manage the world’s largest decentralized exchange network, as well as promoting the utility of Nectar tokens and the development of DeversiFi. It will launch as one of the most funded DAOs, owning up to 17,500 ETH, with the initial money being to dominate aspects of DeversiFi and Nectar. NEC holders will act as de facto members and voters in the DAO and be able to propose, deploy capital, and develop the DAO as they see fit. Developers, researchers, and other individuals in the wider world will be free to submit proposals to the DAO, which will then be considered by NEC holders.
Conclusion
This article has detailed the development of Nectar (NEC) tokens since its launch in February 2018, the driving force for change, and the move to the new NEC 2.0 model. DeversiFi will add new utility to NEC, for example, in the form of large fee discounts and a commitment to share growing exchange transaction revenue for buying and burning outstanding NEC tokens. NEC 2.0 will switch to a deflation model, instead of the previous inflation model, and DeversiFi will also burn 80% of its own NEC tokens ($ 24 million at current prices) to reduce the total supply. The 17807 ETH has been pledged to NEC owners since the Ethfinex exchange fee will be deployed into a new necDAO, exclusively controlled by more than 2000 strong NEC token holders, in one of The world’s largest DAOs.
You can check the NEC price here.
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