Inspiration from Ethereum
At N🟣NLabs, we are firmly convinced that the delicate interplay between the inflation and deflation of a token will define the future of financial assets in the long run. Cryptocurrency will empower all long-term projects to swiftly establish an economy as robust as that of Ethereum itself.
Ethereum boasts an extraordinarily economically proven security budget following the implementation of EIP-1559 and the move to proof of stake.
After EIP-1559, Ethereum's supply started deflating based on transactions and the amount of gas expended by users. This shift positioned Ethereum as an impeccable asset from a security viewpoint, as its inflation (security budget) does not arbitrarily halve every four years like $BTC, thereby potentially causing a long-term security budget concern. Instead, it ensures a more mature and mathematically proven resilience against external scenarios (such as electricity costs, $ETH price, etc.).
From a financial perspective, $ETH, based on its usage and the theoretical attainment of a "Supply Equilibrium," represents a unique form of yield for stakers. This yield is not based on the asset's inflation but emanates from an investment that maintains a stable supply or even becomes deflationary. In fact, $ETH has been a net deflationary asset since The Merge, burning a quarter million more $ETH through usage fees than has been issued in the security budget over the past ~9 months.
Tackling the Deflationary Challenge
Ever since the inception of $OS (now $NON), the economy of EthereansOS (now N🟣Nbeta) has been engineered to strike a harmonious balance between the inflation and deflation of $NON.
In the present iteration, N🟣Nbeta, $NON experiences inflation, the rate of which is determined through the N🟣Nbeta governance mechanism (currently set at 8% per annum). An inflationary configuration is vital for the long-term autonomy of a token; indeed, the inflation of $NON automatically replenishes the rewards for farmers and supplies the ecosystem with $ETH for delegations, investments, and the treasuries.
Deflation of $NON within the current ecosystem transpires due to two primary factors:
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Buy Back and Burn: A fraction of the DA🟣's earnings is automatically allocated towards buying back $NON and subsequently burning it. This is done through the investment fund manager when tokens are bought for the fund quarterly.
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Burn Tax: Several tools within the N🟣Nbeta ecosystem levy a transaction-based tax, which can be circumvented by burning $NON via the Burn Tax feature. For example, when withdrawing from the farming factory there is a choice to pay a small fraction of LP fees or to burn 5 $NON.
The goal is as the DA🟣's earnings increase and the ecosystem usage escalates, more of the $NON supply is burned.
The N🟣Nbeta Experiment
Over the past year and a half, our community has navigated the complexities of the $NON economy and pioneered the inaugural, fully decentralized governance within the crypto space. The genesis of our economy was notably proximate to the start of the Bear Market, a challenging juncture for the whole crypto space. This unique setting served as a sterling proof of concept, testing our resilience during the most strenuous economic conditions for the stability of the N🟣Nnation.
During the initial year and a half, in a closed BETA phase, only a single burn tax function, Farming, was available for end users. The team opted to halt marketing and growth strategies, focusing solely on crafting the ultimate form of the N🟣Nnation.
Despite these hurdles, the economy blossomed. The N🟣Nbeta DA🟣 accrued substantial earnings each quarter, and the rewards for farmers offered $NON holders an impressive amount of liquidity relative to the market cap. With a 5.6% deflation rate of minted $NON (i.e. 5.6% of the inflation was subsequently burned through the various mechanisms), the numbers may seem insignificant compared to projects buoyed by aggressive marketing and a favorable environmental scenario. Yet, for this unique trial, the results exceeded our expectations.
The Bazaar at the Center of N🟣Nnation earnings
The future of crypto rests with ecosystems and software-based nations. As we predicted back in 2020, the era of Lego DeFi has concluded.
Today, projects are regularly compromised, and multi-sig governance systems, with their overly complex upgradeable security features, inhibit further development and trust to build on top.
The way forward lies in building ecosystems from the ground up. At the foundation of the N🟣Nnation is the Bazaar. The Bazaar forms an integral part of our economy, contributing 0.1% of every $ETH trade to the N🟣Nnation DA🟣. Our entire ecosystem is engineered to continually inject liquidity via our tools and its sustainably yielding design. This boosts adoption exponentially, empowered by our comprehensive stack for any coming projects on Ethereum.
Additional information about the Bazaar is available here:
In the N🟣Nnation, individuals will be able to easily create tokens and NFTs, securely organize ICOs and NFT drops, all under one guiding principle: It's free, but you will have to lock some liquidity in the Bazaar!
This simple rule promotes liquidity, which in turn drives more trades, leading to further liquidity and, by extension, more earnings for the N🟣Nnation DA🟣. This cycle benefits $NON holders through increased dividends and further burning of $NON.
The New $NON
The new economy of $NON is pioneering a fascinating financial model that embraces a uniquely balanced approach to managing inflation, learning from the MEMES economy and community culture. The innovative structure of the upcoming $NON token incorporates a 1% burn fee and a 1% royalty fee (paid to the N🟣Nnation public treasury), which promises to add stability and value for users and holders, making $NON an increasingly attractive digital asset in the rapidly evolving world of DeFi. This new token will be the first to utilize the new ERC-20 token factory deployed by N🟣Nlabs.
The $NON's 1% burn fee will incrementally reduce the token supply with each transaction. This mechanism induces further deflationary pressure that mitigates inflationary tendencies, fostering an environment where the $NON token is more likely to appreciate over time rather than depreciating due to inflation.
Understanding the Concept
In essence, the new economy of $NON works on a dual-layered mechanism, the 'Burn Fee' and the 'Royalty Fee,' both 1%. As transactions occur on the transfer or trade of $NON , a portion of $NON tokens are burned, reducing the overall supply. Simultaneously, a royalty fee of the same proportion is directed towards the N🟣Nnation treasury splitter. This cleverly structured model is inherently deflationary, systematically reducing token supply and in effect, potentially increasing the value of the remaining tokens.
While the token will have these fees for transacting with most addresses, there also exists a whitelist functionality which suspends this fee for interacting with other aspects of our protocol. Notably this means that staking for voting proposals and staking for delegations will not incur these fees. These fees are also suspended in the Bazaar where the royalty fee for the token takes over, meaning that swaps in the Bazaar are not subject to any double dipping of fees. The fees for $NON in the Bazaar will be 1% on orders and 0.6% on swaps using the LP. On buys, $ETH will go to the DA🟣 (just as will be done with royalties on NFT’s, treating the treasury splitter as the royalty receiver), and on sells, $NON will go to the farming. There is an additional 0.1% of $ETH from buys going to the treasury splitter when using the Bazaar (explained above), meaning that a total of 0.7% of buys from $ETH will be directed towards the treasury splitter on all buys of $NON from the Bazaar.
The future of the $NON economy
With its unique approach to inflation management, the new economy of $NON showcases a remarkable balance between deflationary measures and utility-driven value. It illustrates a groundbreaking attempt to build a sustainable, value-driven DeFi ecosystem that could become a template for future digital economies. The world is watching as this experiment unfolds, and if successful, it could usher in a new era for decentralized economies, not just for $NON, but for the broader world of digital assets.
If you want to go deep into the N🟣N direction: