We recently announced the closure of Ethfinex along with our evolution to full decentralisation with the new and improved DeversiFi. In line with this, we have now released the NEC 2.0 WHITE PAPER, detailing a number of innovative changes to NEC’s tokenomics, carefully designed to build upon what we have learned over phase one and fine-tuned to meet the needs of holders as we enter this exciting new chapter. Read on to learn more.
Nectar was first implemented in February 2018, serving as the official Ethfinex exchange token, built to reward loyalty through redistribution of trading fees, provide a form of stakeholder ownership as well as a presenting mechanism for casting votes and contributing to the direction and governance of the exchange. Key examples of this in action include:
- Voting. NEC sat at the heart of our developments in community-driven decision making and allowed holders to submit and vote on proposals. This included the Ethfinex Token Vote, where NEC holders were periodically airdropped EVT, used to collectively decide which tokens our traders want on the exchange next, or sold on the open market to those wishing to support their favourite tokens.
- Rewards. 50% of all trading fees were pledged to the Nectar smart-contract (in ETH), with market-makers being rewarded a proportional amount of Nectar tokens based on their volume. They then had the option to redeem ETH in the smart-contract (with NEC), hold for voting rights or sell on the open market. The Nectar smart contract now holds over 17,000 ETH (approximately $3.7m USD).
The initial vision outlined for Nectar recognised the need to remain fluid, preparing Nectar for phase two of its journey. Below is a summary of what NEC 2.0 includes, to dive into the finer details head over to the new white paper.
Introducing NEC 2.0
With ever-changing conditions in the overall market and industry, as well as the successful reaching of important milestones in our roadmap (namely, our evolution towards full decentralisation) we have re-engineered Nectar for a decentralised ecosystem, slashing circulating supply and pledging an ever increasing share of revenue to holders.
SUMMARY (FULL WHITE PAPER)
- Initial Burning Event. We’ll be conducting the most aggressive burn in the industry, amounting to between 40 and 50% of the total NEC (about $26m). This will give NEC holders a higher stake in the ownership of the exchange, whilst radically changing its tokenomics. 400m out of the 500m that DeversiFi directly owns will be burned as well as tokens that were earned but unclaimed by users of Ethfinex. Remaining tokens owned by DeversiFi and longer-term investors will then be vested over 5 years. With these changes, the overall initial circulating supply of NEC tokens will stand at approximately 180-200m, with no more ever being created.
- Escalating Buy-Back and Burn. Additionally, we will be pledging up to 45% of exchange revenue to buy back and burn circulating NEC from the market, marking a shift from inflationary to aggressive deflationary tokenomics.
- Trading Fee Discounts. Holders of NEC (those holding in a private wallet) will benefit from significant trading fee discounts of up to 70%.
- Whitelist Removal. The removal of the NEC whitelist, will allow tokens to be transferred freely between addresses and with the wider Defi/Ethereum ecosystem, serving to closer align our values with our counterparts in the space.
These changes mark not only the opening of NEC to the wider DeFi ecosystem but the transition from an inflationary to a deflationary model, with the industry’s most aggressive buyback and burn initiative to date. This also means that no more NEC will ever be minted, with the supply only decreasing with time, providing for more incentive to hold NEC as the DeversFi ecosystem expands.
* NEC token economics are highly experimental. DeversiFi reserves the right to change its policy around buying NEC using its trading fees, or any other benefit DeversiFi provides to NEC holders, at any time in the future.
Over the past 18 months, under the original NEC model, we have collected 50% of trading revenues in the NEC smart-contract, reserved for Nectar holders wishing to burn their NEC for a proportional amount of the funds. Now, as an added utility in the new NEC 2.0 model, these funds (approximately US$3.7 million worth of ETH) will fuel the NecDAO - a Decentralised Autonomous Organisation built upon the DAOstack infrastructure and serving as the main hub of future decision making for the Nectar and DeversiFi. It will be holders of NEC who own the initial reputation in the DAO and it will be completely up to them how those funds are put to use.
The NecDAO is under development and is set for launch in the coming months. NEC holders will have the opportunity and will be encouraged to lock their NEC in the DAO, with longer lock periods equating to a greater degree of voting-power.
We are excited to roll out these radical new changes to NEC and bring our users a wider range of features, benefits and incentives to interact with DeFi. READ THE FULL WHITEPAPER for a deeper dive of NEC 2.0, and/or join the discussion over at our Telegram and Reddit.
We’re working hard to continue the development of DeversiFi as the home of token trading, offering the most innovative solutions to keep our users in full control of their trading experience.
We’d love you to join us on our journey to decentralisation: