Apr 3, 2022
One Token, Many rewards! Diversity in DeFi interest generation using Novo DeFi Protocol
Many Decentralised Financial protocols offer unique mechanics that make them great experiments as a store of money, but none of them has long-term viability. Most ventures rely on infusions of new cash and investors.
In a bear market, when selling outnumbers new investors, and the price drop exceeds the value of their bonds/staking incentives, they typically reveal their true colours. Novo was established as a volume-based protocol to resolve this issue.
The Novo Protocol is the first volume-based project to offer so many benefits to users. In contrast to similar protocols, Novo does not rely on adjusting the general supply or minting new tokens to fuel new growth.
Instead, Novo will always be deflationary, which means that the supply will be constantly reduced, leading the price per token to climb. In addition, each swap transaction (buying and selling) and each transfer contribute 5% and 2%, respectively, to several protocol functions.
The Novo Protocol’s primary goal is to maintain market stability and growth, not through the arbitrary and unbacked creation of new tokens or unnatural elastic supply adjustments, but rather through the use of transactional volume and the implementation of a variety of mechanisms such as Automatic Regenerative Liquidity (ARL).
Functions of the Novo Protocol
1. Staking Benefits: Staking Novo allows the user to a portion of the rewards, which are weighted based on the size of the staked balance by the user and how long the user has staked compared to other stakers. Temporal Staking is what we term it.
2. Regenerative Liquidity: Every trade adds to the auto-generation of liquidity, then made available for trading on decentralised exchanges.
3. Burn: A part of the transaction gets consumed indefinitely, reducing overall supply.
4. Treasury: To implement the Price Recovery Mechanism (PRM), a small charge is provided to the Treasury.
The Novo Smart Treasury
The Novo protocol’s core component is the Novo Smart Treasury. Each transaction pays a tiny fee to the Treasury, which is then converted to BNB. Depending on the requirements, the Treasury conducts a variety of tasks, either automatically or manually.
The Treasury’s main goal is to earn exponential returns by reinvesting money in yield optimisers and liquidity farms. In addition, returns are utilised to incentivise staking and to implement various price recovery strategies. Finally, the protocol performs lending and other DeFi actions at scale in real-time.
Users receive staking incentives with every transaction by holding and staking Novo. It doesn’t end there, though. Users that stake their Novo are not only entitled to a part of the protocol’s benefits, but the protocol also lends funds from the Treasury and staked funds to yield optimisers like Beefy finance, creating consistent yields at a larger volume and compounding Novo staking incentives.
Novo will have some of the best APYs in DeFi when the volume is strong. Stakers are diversified and earn yields as if they had a professional portfolio manager when the volume is low. The Treasury invests for the benefit of the stakers and its benefit.
The Treasury buys Novo from the market and distributes the tokens to stakers, encouraging upward price movement and producing greater volume, which boosts staking rewards and burns.
The NOVO Token
The NOVO token is a governance, utility, and SOV (store-of-value) token created by the Novo team and released on the Binance Smart chain. As of now, the NOVO token can not be burned or minted.
Key Protocols for the NOVO Token
The NOVO token makes use of five key protocols. Here, we look at each of them.
1. Reflections: Holders of the token earn passive incentives while watching their Novo balance grow endlessly through static reflection.
2. Staking Benefits: Unlike other reflection tokens, users can also stake their tokens to increase their part of the rewards without sacrificing their reflections.
3. Regenerative Liquidity: Every trade adds to the auto-generation of liquidity, then made available for trading on decentralised exchanges.
4. Burn: A portion of the transaction gets consumed indefinitely, reducing overall supply.
5. Treasury: To implement the Price Recover Mechanism (PRM), a small charge is provided to the Treasury
Contents distributed by Learn.Block6.tech
👉 Telegram — Fresh ideas
👉 Twitter — Latest articles
