As promised on the recent community call, we wanted to share some further information with you about the NIIFI token and the role it plays in the NiiFi ecosystem. The details set out below also explain how the NIIFI token supply will become deflationary as a result of a buy back and trustless burning mechanism. As stated previously, NIIFI will play a critical role in the governance of the NiiFi platform too; more details about this will come in the next few months.
Beginning with the token buy back, one-sixth of future transaction fees on the platform will be used to buy back NIIFI tokens on NiiFi. Any NIIFI token holder will be able to call a function to convert accrued funds into NIIFI tokens, which will then be burned.
This mechanism is similar to that proposed by SushiSwap and will reduce the supply of NIIFI tokens over time, making the token deflationary. Additionally, the process of buying back tokens using the NiiFi exchange will increase transaction volumes.
The current NiiFi smart contracts have a ‘protocol fee’ set to zero, meaning that a new set of smart contracts will need to be deployed in order to enact this change. This is a relatively simple process and we will keep you updated as to our progress. This task will also highlight another benefit of Nahmii: low and fixed costs for allowing users to perform trustless migration of their funds to new smart contracts.
NiiFi recently became the first project under the SkunkDAO umbrella and today marks the first of many upcoming announcements, including ways to drive transactions through the exchange and more details about the governance of the platform by NIIFI token holders. Stay tuned for more updates in the coming weeks!
