How rFOX Works: A Simple Guide
rFOX is a new multichain incentive that connects the Arbitrum and THORChain ecosystems.
Here’s a short guide on how rFOX works and how it benefits everyone involved.
Step 1: Action on THORChain
It all starts with activities on THORChain. When you trade, save, lend, or provide liquidity on THORChain, you help generate RUNE, THORChain’s native token. This is the first step that kicks off the whole rFOX process.
Step 2: DAO Earns Fees in RUNE
From these activities, the ShapeShift DAO earns fees in RUNE. Every time something happens on THORChain, a bit of RUNE goes to the DAO. This is how the DAO starts collecting its earnings.
Step 3: Building Up the DAO Treasury
The earned RUNE is then deposited into the ShapeShift DAO treasury. Think of the treasury as the DAO’s bank account where all the collected RUNE is kept. This is where the magic starts to happen.
FOX Burn and rFOX Yield
Now, here’s where it gets interesting:
1. FOX Burn: Some of the RUNE in the treasury is used to buy back and burn FOX tokens. This reduces the total number of FOX tokens out there, making each one worth a bit more.
2. rFOX Yield: The rest of the RUNE is used to reward people who stake their FOX tokens. If you stake your FOX, you earn RUNE as a reward, giving you a nice incentive to hold and stake your FOX tokens.
The Result: Deflationary FOX
By burning FOX tokens, the total supply goes down, which can increase the value of the remaining tokens. At the same time, staking your FOX tokens to earn RUNE rewards makes the whole process beneficial for everyone involved.
Joining the rFOX program means you’re not only helping the ShapeShift ecosystem grow but also benefiting from a system that rewards you with RUNE and makes FOX more valuable over time.
It’s a win-win for the community and the token holders.
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