The Tokenomics of Lendefi
Lendefi’s native token is LDFI. It is a permissionless decentralized governance cryptocurrency that:
- Supports asset inclusion/exclusion
- Regulates the structure of interest rates
- Is in charge of the allocation of rewards
- Supports protocol updates and a host of other use cases
Lendefi currently ensures liquidity for token holders by listing the LDFI token on decentralized exchanges, and will shortly broaden this to add centralized exchanges
- 1% Reflection fee is returned to all token holders
- 1% Buy back fee is used to buy back and burn tokens
- 1% Wallet fee is used for Protocol development and promotional expenses
1% Reflection Fee
The reflection fee is a 1% transaction fee and is automatically paid out to all holders of LDFI tokens (excluding project wallets and vesting contract). This fee, paid in LDFI, is applied after each LDFI transaction has been completed.
1% Buyback Fee
The buyback fee is a 1% transaction fee and is used to buy and burn tokens, decreasing the circulating supply, and increasing the value of the remaining coins as they become more scarce. Due to its hyper-deflationary characteristic, this fee will be deducted as a percentage of the transaction amount from all transactions. When the token contract’s holdings reach 0.1 percent of the total supply, an automated swap on a sell transaction is performed, and BNB is added to the token contract. When the token contract’s BNB balance reaches 1 BNB, a sale transaction will utilize 1% of the available BNB balance to purchase back and burn LDFI tokens.
1% Wallet Fee
The wallet fee is a 1% transaction fee and is delivered to the multi-sig secured wallet of the Lendefi Protocol. These resources will be utilized to cover the costs of Protocol development and marketing.
The DAO based governance of Lendefi allows token holders to actively participate in the Protocol’s governance.
The spread, or the difference between the interest rate the borrower pays and the interest rate the lender receives, will be used to purchase LDFI tokens from the market for burning and rewards.
Excluded Addresses from Transaction Fee include:
- Project Wallets
- Vesting Contract
Protocol updates can be proposed by any address holding more than 1% of the total LDFI tokens. These adjustments can then be decided following a DAO vote.
To support the growth of the Protocol and the production of value for token holders, a wide range of rewards will be granted.
LDFI token holders will be able to stake their tokens in exchange for LDFI tokens as a reward.
Lendefi will run a liquidity incentives program that rewards liquidity providers with LDFI tokens on decentralized exchanges where LDFI is listed, such as Pancakeswap.
Liquidators (margin callers) will be rewarded if certain liquidation conditions are met. This is done to incentivize the liquidation process.
To encourage Protocol use, lenders and borrowers will be rewarded with LDFI tokens when they use the Protocol, with the exception of the Wallets listed above
Burning of Tokens
The total and circulating supply of LDFI tokens will be reduced by sending LDFI tokens to a burn address. This will increase the value of LDFI tokens, giving token holders even more value. Tokens are burned when the LDFI token’s “buy-back and burn” option is activated, as well as when the DAO votes to manually acquire tokens from the market using Protocol fees.
The Lendefi protocol will deliver leveraged trading and secured lending to cryptocurrency markets. Utilizing an undercollateralized loan model, Lendefi facilitates a trustless relationship between lenders and borrowers, managed by the protocol to remove counterparty risk.