Nukem Loans Governance

…or Governance Weaponization

Crypto governance refers to the mechanisms and processes through which decisions are made and implemented within decentralized networks and blockchain-based platforms. Unlike traditional systems, where decisions are typically controlled by a central authority, crypto governance empowers participants and token holders to have a say in the evolution and operation of the project.

What is the original idea behind crypto governance?

• Decentralization: Governance mechanisms should aim to distribute power and decision-making authority among participants, preventing any single entity from having excessive control.
• Transparency: Governance promotes transparency by providing open access to information and decision-making processes within crypto communities.
• Community Engagement: Governance empowers token holders to have a voice in shaping the direction and policies of the network, fostering a sense of ownership and inclusivity.
• Upgradability and Adaptability: Governance enables the implementation of upgrades, improvements, and protocol changes in response to technological advancements, security concerns, or changing market dynamics.
• Economic Stability: Governance allows for the establishment of rules and mechanisms that govern token distribution, inflation rates, rewards, and other economic factors.

In reality, many projects employ the term “governance” as a mere marketing tactic to create an illusion of decentralization and ownership. However, the truth is that a significant number of projects are controlled by a select few individuals who hold a substantial portion of tokens. As a result, smaller users have minimal influence on voting outcomes, rendering their participation practically inconsequential. Furthermore, while some governance tokens claim to offer additional utility, such as fee distribution, they often face significant inflationary pressures. In many cases, the inflationary pressure outweighs the APY gained from fee distribution, undermining the token’s value proposition.

What we truly require is a governance model that goes beyond granting a mere sense of ownership. It should encompass rewarding liquidity providers and empower community members and market makers to assume genuine ownership over a significant portion of the project’s infrastructure. By doing so, a project could be capitalized in a way that involves a single owner who has acquired single entire unit of a business. This owner would govern their part to the best of their abilities, aiming to create the best financial outcome not only for their share of the business but also for the holders of governance token. By maximizing financial benefits for governance token holders, decentralization would be achieved as incentivization would attract more holders and create more buying pressure.

Operationalization: Nukem Loans

Nukem Loans will deploy its lending platform specifically designed for MEME projects with governance token sNUKEM which can be obtained by staking NUKEM token on the platform.

Governance Token Utility

Holding sNUKEM brings numerous benefits to its holders, including:

• Governance - The balance of sNUKEM represents voting power, allowing holders to actively participate in decision-making processes.
• Borrowing Fee Distribution - Whenever a loan is initiated, a borrowing fee of 1% is deducted from the loan value. This fee is then used to buy back NUKEM tokens from the open market. The repurchased NUKEM tokens are subsequently distributed to sNUKEM holders.
• Liquidation Fees - sNUKEM holders earn a significant portion, 31% to be precise, of ALL liquidation fees generated on the platform. Similar to borrowing fees, the buyback mechanism is employed to repurchase NUKEM tokens, which are then distributed among sNUKEM holders.

Governance Weaponization

The core functionality of the Nukem Loans platform revolves around lending, generating revenue through borrowing and liquidation activities. To ensure a high level of activity and subsequent revenues, our primary objective is to attract lending liquidity and MEME communities to the platform.

When a lender deposits and locks their USDT or MEME as collateral on the protocol to participate in lending, they receive vsTKN tokens that represent their share of the lending pool. For example, a lender depositing and locking USDT when lending against PEPE collateral would receive vsUSDTPEPE tokens. Holders of vsTKN tokens not only earn interest on the loans but also receive 69% of the liquidation proceeds from that particular market. Furthermore, vsTKN holders have the privilege to vote on matters related to their specific lending market. This includes determining interest rates, liquidation thresholds, and other relevant aspects related to lending on that market.

Each market on the Nukem Loans platform is represented by a unique NFT that grants ownership and control to its holder. With this ownership, the NFT owner has the ability to create proposals for that specific market, such as adjusting interest rates or changing borrowing fees. However, it is the vsTKN holders who hold the voting power within each market, as they are the lenders participating in that marketplace. In this way, each market serves as a miniature decentralized autonomous organization (mini-DAO), granting liquidity token holders the authority of decision-making.

Initially, the ownership of these market-specific NFTs resides with the Nukem Loans platform. However, in the future, these NFTs will be made available through auctions, where interested individuals can bid using sNUKEM tokens. This mechanism allows for the decentralization of governance, as each specific market can become “independent” from sNUKEM governance and have its own set of proposals for matters concerning interest rates, borrow fees, liquidation thresholds, and profit distribution.

Profit-Oriented Governance

Based on the information provided, it can be concluded that the governance token economy and its associated mechanisms are strategically designed to create additional buying pressure for the protocol token, NUKEM, and incentivize token holders to stake it for sNUKEM:

• The fees collected from borrowing and liquidation activities are converted directly into NUKEM tokens directly on the market and then distributed to sNUKEM holders and liquidity token holders.
• Borrowing fees (1% of each loan) and 31% of liquidation fees are distributed to sNUKEM holders.
• The ability to create proposals will be subject to the sNUKEM token balance.
• As a specific market gains popularity and becomes “hot,” Nukem Loans will introduce the concept of independence by auctioning market ownership NFTs. Through this auction process, the sNUKEM tokens collected will be permanently removed from circulation.
• Despite the ownership NFTs, users participating in that specific market will still be subject to borrowing fees. These fees will continue to be distributed to sNUKEM token holders, ensuring that they benefit from the ongoing activity and transactions within the platform.
• ZERO unbacked, inflationary pressure on the NUKEM token supply.

Learn more about Nukem Loans:

https://medium.com/@Coinsigliere/unleashing-the-future-of-meme-coins-nukem-loans-3e9bbd663446
https://medium.com/@Coinsigliere/nukem-loans-the-ultimate-ally-of-every-meme-project-55d9f2f0d918

Join the community:

https://t.me/nukemloans
https://twitter.com/NukemLoans

Follow the team:

https://twitter.com/DeFiKash
https://twitter.com/Consigliere_nm