Deep Dive | TerraFloki
Calling themselves “The First Ever Deflationary Token in the Terraverse”, TerraFloki looks to be a meme coin at first glance. But after diving deeper, they seem to have some interesting experiments at play, notably the deflationary aspect of their token and their NFT-as-a-Subscription (NaaS) model.
As interesting as these experiments are, most people are probably wondering what the point of all this is. Well, there’s really no good reason except for the fact that the team hopes this would be a fun way to attract more people into the Terra ecosystem.
How it Works
In order to create a deflationary token, the TerraFloki team had to create their native DEX. This basically allowed them to implement their own rules rather than be subjected to fees by 3rd party DEXs.
For certain transactions in the TerraFloki ecosystem, a 10% tax is applied. This includes:
- selling $TFLOKI
- transferring $TFLOKI between wallets
- providing liquidity with UST and $TFLOKI (tax only applied to $TFLOKI)
- claiming LP rewards
This 10% is then split among 3 categories: 4% is burned immediately, 3% is added to LP rewards, and 3% is sent to a marketing wallet.
In contrast, there are also tax-free transactions. These include:
- purchasing $TFLOKI
- providing LP with UST only
- staking/ unstaking $TFLOKI on Tickets Farm
- all transactions on LP tokens and TerraFloki Ticket ($TFTIC)
With this dynamic, it’s pretty easy to see which actions the team is trying to incentivize and disincentivize.
NFT-as-a-Subscription (NaaS) model
Calling themselves the pioneer of the NaaS model, 1000 Floki NFTs are distributed every month. In order to claim an NFT, a TerraFloki Ticket ($TFTIC) is needed. These tickets can be obtained through staking $TFLOKI tokens in the Tickets Farm, or you can buy them in the native DEX. Tickets are distributed linearly every block based on the number of tokens you staked divided by the total number of tokens staked in the Ticket Farm.
It is important to note that $TFTIC can be fractional, but a user would need one whole $TFTIC in order to redeem a TerraFloki NFT.
Flokiverse
One of the more interesting aspects of TerraFloki is their recently announced play-to-earn game; Flokiverse. This game uses Floki NFTs as playable characters and allows them to earn passive income. While there are still little details about how this would be implemented, Floki NFTs might have an interesting use case if this were to come true.
More details about this game are in the tweet below:
TFLOKI token
Governance
TerraFloki’s take on governance is a little different than current DeFi protocols. Instead of staking $TFLOKI tokens into governance, voting power is calculated by the tokens that are staked in the Ticket Farm and in the TFLOKI LP. The link to how voting power is calculated is below:
Link: https://terrafloki.io/TERRAFLOKI_DAO.pdf
As of now, a poll has already been proposed in the TerraFloki DAO.
Value Accrual
The $TFLOKI token mainly accrues value in the following way:
- Deflationary: 4% of certain transactions are burned. If all else equals, this should increase the price of $TFLOKI without an influx of new demand.
Token Distribution
There are a total of 100M tokens. The way they are distributed are in the graphic below:
Team
The TerraFloki team is made up of a group of LUNAtics that work on some of the biggest projects in Terra according to their whitepaper. While there’s not much more information about them, here is what they look like:
Personal Thoughts
*This section consists of my personal opinions regarding the project and should not be taken as any sort of financial advice.
Like many others, when I first heard about TerraFloki I didn’t look too much into it as it has been dubbed a “meme coin”. But in the short span of a few weeks, the price of $TFLOKI has risen from less than 1 cent (≈$0.0025) to its current price of ≈$1.4 at the time of writing.
The significant price increase has no doubt caught the attention of many in the community, but what I find most fascinating about this project is their willingness to experiment with new things.
For example, eliminating governance staking and solely basing the voting power off staked $TFLOKI in Ticket Farms and LPs is something quite unique. While I’m not sure what the pros/cons of both methods are, I think this model of eliminating governance staking fits their model as all liquidity is able to concentrate on TFLOKI LPs and Ticket Farms.
Another aspect I found interesting is their willingness to try something new in the NFT space. With so many NFT projects on Terra launching the same model of a “10k profile picture (PFP)” project, TerraFloki tried something new with their NFT-as-a-Subscription (NaaS) model.
While I'm also not fully sure what the implications of this model are, it’s pretty clear they have solved the whitelisting and KYC issues that every NFT project seems to struggle with.
Overall, I really appreciate the TerraFloki team's willingness to experiment. While there’s no clear goal for this project, I think a lot of new innovations can come from trying something new.
More Information:
- TerraFloki’s Twitter: https://twitter.com/TerraFloki
- TerraFloki’s Telegram: https://t.me/terrafloki
- TerraFloki’s Discord: https://discord.gg/D4yW8nBp
- TerraFloki’s Website: https://terrafloki.io/
- TerraFloki’s Whitepaper: https://terrafloki.io/TERRAFLOKI_WHITEPAPER.pdf
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Disclaimer
This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.
