NXD Protocol - DXN Hyperstructure Initiative
  • NXD Protocol
  • Introduction
  • Engineering a Hyperstructure
  • DXN Hyperstructure Initiative
  • The NXD Opportunity
    • Introduction to DXN Protocol
    • A Short Analysis of DXN Economics
    • DXN Price Performance, Access List, ROI Measures and XEN Burn
    • Challenges to DXN’s Long-Term Value Proposition
    • The NXD Opportunity
    • DXN Protocol as an Income Layer
  • NXD Protocol Ecosystem
    • Introduction to NXD Protocol
    • NXD’s Value Proposition
    • NXD Economics of Compounding
      • DXN Staking Vault (DSV)
      • NXD Staking Vault (NSV)
      • NXD LP Technology
        • NXD/DXN UniV2 Base Pair LP - Contract Renounced, Locked and Immutable
        • Fee-on-Transfer 5% (FoT)
        • FoT Whitelisting Functionality - Timelock Governance
        • Web of Deflationary LP Volume
      • Price Floor Technology
        • Price Floor Increased by NXD Burns
        • Price Floor Increased by the Uniswap UniV2 0.3% DXN Fee
      • Comprehensive Effects on NXD’s Intrinsic Value
    • NXD Tokenomics
    • NXD Limited Mint Phase
    • NXD Referral Program
  • NXD Protocol Audit
  • User Guides - FAQ
    • How to mint NXD tokens?
    • How to interact with the NXD Staking Vault?
    • How to add liquidity to the NXD/DXN UniV2 LP?
    • How to remove liquidity from a UniV2 LP?
    • Why can’t I create a UniV3 LP?
    • Why do I receive the error - "DBXen: failed to send amount" / "swap failed" / "unstake error"?
    • How are the DSV and NSV buy, burn & claim strategies executed?
    • How to interact with an IPFS Hosted Website?
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  1. NXD Protocol Ecosystem
  2. NXD Economics of Compounding
  3. NXD LP Technology

Web of Deflationary LP Volume

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Last updated 1 year ago

The NXD Protocol strategically encourages the establishment of Community and External Liquidity Pools outside of the Base Pair being the NXD/DXN UniV2 LP. This approach mirrors successful models like The Grays Currency on Pulsechain (pTGC), where liquidity volume integration plays a pivotal role in facilitating token deflation. The External LP’s, for instance an NXD/ETH UniV2 LP, widen the ecosystem’s reach and integrate seamlessly with NXD’s deflationary model, but with a specific nuance:

FoT is levied on NXD sell transactions and not on NXD buys, fostering an environment that encourages accumulation while still benefiting from deflationary dynamics.

This nuanced approach of selective FoT application, where sell transactions within these additional LPs are subject to fees, serve dual purposes:

  • Encourages Holding and Participation: By exempting buy transactions from FoT, NXD lowers the barrier for entry and incentivizes users looking to diversify their DXN portfolio while holding its deflationary counterpart and benefitting from its advantages, broadening the token’s appeal and accessibility.

  • Ensures Deflationary Impact from Sells: The application of FoT on sells across this extended network of LPs ensures that each sell transaction contributes to the protocol’s deflationary mechanism, by burning NXD and enhancing the token’s ROI, liquidity and price stability.