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How DAFI Protocol Rewards Lengthy-Time period Token Holders and Helps Sustainable Mission Development

03/07/2021

As extra cryptocurrency initiatives are starting to grasp firsthand, protecting key stakeholders and early buyers concerned in a venture’s ecosystem long-term is hard. With growing hypothesis round new blockchain networks, particularly DeFi-focused platforms, cryptocurrencies can see immediate value progress as they hit the market. With these income too excessive for early buyers to forgo, the individuals who supported the venture earliest can find yourself cashing out, which is dangerous for the general ecosystem.

DAFI Protocol has give you an modern resolution to this downside, rewarding long-term customers with a metric-based reward construction that enables new crypto initiatives to take care of their unique group over time.

Artificial Tokens Are the Reply

DAFI Protocol’s resolution revolves round artificial tokens, or newly minted tokens produced to symbolize the worth of different property. Utilizing artificial tokens, new initiatives can deposit a portion of their complete provide into the DAFI protocol. Following the deposit, artificial tokens representing possession rights to the unique cash shall be minted and distributed to holders. These tokens usually are not tradable, that means unique token holders can’t monetize these artificial tokens whereas they maintain them. Their solely use is exchanging again for the preliminary token after a predetermined time interval runs out.

This may increasingly seem to be it solely advantages venture improvement groups, but it surely rewards early token adopters as properly. Following the distribution of the preliminary artificial tokens, the variety of tokens a consumer holds will change primarily based on a sensible contract algorithm that enables for the move of token provide. Utilizing a decentralized oracle, DAFI will be capable of consider off-chain metrics corresponding to token value, platform adoption, and buying and selling quantity to find out the platform’s progress. The extra usability the platform receives over time, the bigger the quantity of artificial tokens distributed to every token holder.

Creating Holders Out of Sellers

With DAFI, platforms usually are not discouraging hypothesis on their native cryptocurrencies; they simply need the dedication to develop into a longer-term association. With its modern resolution, DAFI turns buyers from sellers to holders, incentivizing them to comprehend their funding worth if the platform sees measurable progress.

That is extraordinarily useful to new initiatives, as they should set up a base of platform utilization in order that they know what works properly and the place they should enhance. This construction will serve the most effective pursuits of initiatives and token holders going ahead, as tokens will notice worth primarily based on the actualization of the community. Contemplating some initiatives price a whole lot of hundreds of thousands or billions of {dollars} obtain virtually no community utilization, DAFI guarantees to correctly incentivize stakeholders primarily based on greater than broad hypothesis.

There may be presently no hyperlink between token holder rewards and community adoption; this wants to alter. Though customers might not be capable of revenue from short-term hypothesis by way of DAFI, they’ve a a lot better likelihood of producing worth long-term alongside adoption. This mechanism will scare away gamblers and speculators hoping to get wealthy fast on the subsequent hyped-up venture, leaving funding alternatives for individuals who plan to stick with the venture over an prolonged time period. With this superior token distribution technique, initiatives will make the most of DAFI to deposit a portion of their token provide in favor of non-tradable and elastic artificial tokens for customers, rewarding them over time.

 

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