GOV (DEFI 2.0)
The model allows long-term committed investors to make decisions that benefit the platform's long-term development.
The xUP token is the governance token of UPFI Network in the Solana blockchain. It is generated by locking UPS tokens on the Staking. Locking UPS is to empower long-term committed xUP staker to take decisions that benefit the long-term future of the platform. This is also why we reward xUP staker committed to longer lock with more voting power (more xUP).
The xUP token serves as our platform's governance token for decisions on fee distribution mechanism, integration, unique functions, events, treasury, development and more.
Users also can use xUP to mint NFT chracter, as well as use to mint synthetic assets, use as common currency in UPFI World (Social metarvese)... this will greatly reduce the supply of external UPS.
1. The amount of UPS locked is always greater than the amount of xUP minted, it will be equal to when all users are locked for 2 years, this greatly reduces the amount of UPS in the market.
2. xUp pegged to Ups price
3. Users use xUP to mint NFT character, as well as use to mint synthetic assets, use as common currency in UPFI World where we are building Social Metaverse to create a lot of use cases for xUP.
4. xUP used for DAO (voting)
5. We will launch Bonding feature (next 1-2 weeks), to expand the treasury that will back each minted UPS to the market.
6. There is only supply from UPS stake to mint xUP, and xUP reward in UPFI World is also minted from here. So the more products that use xUP, the more scarce the UPS will be.
Consuming a lot of xUP leads to scarcity of xUP => so this encourages people to lock UPS more => scarcity of UPS
It will accomplish this the same way central banks manage their currencies using reserve assets.
But GOV manages UPS using crypto reserve assets.
Contrary to central banks where decisions are made by a select few
all changes to the protocol are voted on by the community of UPS holders through the DAO.
The protocol uses it's treasury to back all outstanding UPS tokens.
That mean each UPS is backed by the stable coin UPFI. For example, the DAO determines the support value to be 0.03 UPFI
When value of UPS above it's backed assets, the protocol mints and sells news UPS increasing supply.
When value of UPS below it's backed asset, the protocol buys-back UPS and lock in Treasury decreasing supply.
This allows the UPS token to achieve a stable floating value while never falling below the value of it's backed assets
GOV also expands it's treasury through bonds.
Bonds are sold by the protocol for different assets and in return the buyer received UPS at a discounted price.
This allows the protocol to control the supply of UPS and lock in liquidity to the treasury.
These assets are also used to back new UPS that is distributed to stakers.
There are two main options, staking and bonding.
The easiest option is to stake, where you can stake your UPS and yields are compounding automatically by everyblock we called is block rebase.
A more hands-on investor might like to take advantage of bonds
where you can sell assets to the treasury and receive UPS at a discounted price after a certain period of time.