NEURONswap is a decentralized financial protocol (DEX) on Klaytn mainnet that introduces ‘Governance 2.0: Metanance (metaverse + DAO governance)’ for the first time. The NEURONswap team has a mission to create the most attractive Defi, and provides an effective and sustainable Defi platform service that can be used by users
The NEURONswap team develops the protocol with a mission to realize a fully decentralized autonomous organization (DAO) based on Metanance and popularize a new governance model by implementing a DAO digitally.
What is Governance 2.0: Metanance?
NEURONswap is the first to implement governance 2.0(metaverse + DAO governance) in the world. The NEURONswap team combines metaverse with DAO governance to make communication between governance members smooth and enhance convenience with a user-friendly UI.
Rony Club is a club with governance members who share the mid- to long- term vision of NEURONswap. By staking NR tokens, anyone can become a member(Rony) and acquire gNR tokens(governance tokens). As the owners of the Neuron protocol, all Ronys participate in making protocol's important decisions and receive a share in revenue as the protocol grows.
5 different badges: Diamond, Gold, Silver, Bronze, Stone are given to Ronys determined by their governance power and they are also given unique membership cards(NFT) and badges(NFT) accordingly. In the metaverse, Ronys will communicate with each other in the Square and exercise influence over the protocol’s technology and Governance rules in the Council. In addition, they will exercise influence on the economic agenda in the financial committee.
Rony Box: Rony box is an item where Ronys can obtain NFT clothings, accessories, items, and badges at random. Members can put the NFTs on their avatars to show the influence to other members.
NEURON NFT Market: NFT Market is a place that is connected to the NEURON ecosystem where you can buy and sell the NFT items obtained through Rony Box and it is one of the core functions of NEURON Swap.
Rony Council: In the metaverse, Ronys can propose autonomously and make an agenda on protocol technology, governance rules, etc. They can vote on the proposed agenda according to their governance power.
Rony Finance Committee: At the finance committee in the metaverse, Ronys can propose autonomously and make an agenda on Economy. Protocol economics include rewards for traders, governance token staking rewards, pair boosting, marketing expense process, bug bounties, and more. On the proposed agenda, Ronnies can vote according to their governance power.
Rony Square: Rony Square is a space where Ronys can express their identities through their avatars and freely communicate with club members using facial expressions, movements, voices, and texts. In addition, it is a space where important notices of the protocol are posted on the bulletin board, and Ronys can post anything they want on the bulletin board
Since the success of Compound Finance, the governance token incentive system has become the standard in the DeFi market and , Sushiswap, Aave, Yearn Finance led the opening of an open financial protocol modeled on the Liquidity Mining.
Many new DeFi projects have adopted Liquidity Mining in an attempt to secure the liquidity. However, the liquidity provided through the Liquidity Mining system has a major drawback. Due to token inflation, the incentive for additional liquidity inflows is diminished, making it very difficult to create a sustainable ecosystem.
When liquidity providers who seek the short-term profits dump the governance tokens which causes other liquidity providers to exit, the project token price and protocol ecosystem collapses. Other DeFi services claiming to be DeFi 2.0 try to solve this problem by reducing the liquidity supply volatility through liquidity staking, but this method has not solved the underlying token inflation problem.
A way to fundamentally solve this problem is to increase the utility of the governance token to increase the number of new governance token holders, or to increase the number of actual users of the service and continuously burn the governance token with the fee generated from it. It is to increase the amount of tokens to be burned over the amount of tokens to be minted.
There are three major entities in the AMM-based DEX: liquidity providers, governance token holders and traders.
Liquidity providers create an environment where users can trade on DEX by providing token liquidity. Governance token holders invest in the protocol with mid- to long-term vision, participate in the protocol’s important decisions and receive a share in the revenue generated by the protocol. Traders pay a fee to the protocol for the use of service.
All three entities are important to sustain the DEX ecosystem. However, the tokenomics of existing swap services focus only on governance token holders and liquidity providers, rather than the traders.
NEURONswap team rewards governance tokens to all three entities for their contribution to the ecosystem. By providing token incentives to liquidity providers, we will create a pleasant transaction environment with less slippage, and provide additional mining revenue for long-term governance token stakers for contributing to the rise of governance value.
Finally, by providing token incentives to traders, we will reduce the burden of high fees in the DEX environment to enable smoother user-to-user transactions.
The most of the transaction fee incurred will be accumulated as a buyback fund. As the trading volume increases, NR tokens are bought back to increase the token deflation rate and increase the asset value of the project, thereby increasing the motivation for liquidity inflow to continuously create a smooth trading environment
NEURONswap has implemented a DeFi ecosystem that enables a virtuous cycle as the Neuron protocol develops that leads to an increase in token burning volume, an increase in token value, an increase in trader incentives and an increase in liquidity provider incentives, an increase of trading volume and the creation of better trading environment.