With the concept of DeFi becoming one of the most popular among blockchain related protocols, new projects with unique tokenomics are being released. These kinds of projects are essential for the growth of blockchain technology as they generate curiosity amongst newcomers and act as disruptive activities to traditional financial institutions. EQNOX is one of said projects. While being a certificate of deposit is its core concept, by mixing seasons into it, things start to get interesting! But let's get down to the basics first.
Certificates of deposit
Let's say that you have around 1,000$, and you'd like to use it to make some additional income. You've considered stock exchanges, but it is too much of a hassle. So, institutions like banks, for example, have come up with an activity called Certificate of Deposit.
Much like a savings account, you deposit some money, and gain some interest. Unlike saving accounts, however, your deposit is, at the lack of other words, "locked" for a certain amount of time (term). While you can withdraw your deposit at any time, if it is done before the term ends, you’ll have to pay a hefty penalty.
While the conditions vary with each institution, in the US, interest ranges around 0.03% yearly for deposits that last from three to twelve months. Penalties also vary according to the agreement. Here's the catch. While these activities are a great way to see your money grow, the truth is that if you participate on a Certificate of Deposit with said 1,000$, at the end of the year you would get around 3$. And the worst part is that if you want to gain a higher APY, you'll have to raise the bar most likely to something around 10,000$ to have a 0.05% APY.
Imagine locking money that you don't know if you're going for a whole year just to need it to get a whole 50 bucks!
And that's where EQNOX comes in.
EQNOX is, by definition, a Certificate of Deposit on the blockchain. You lock (stake) the token ($EQNOX), and gain interest. You'll have to pay a penalty if you withdraw your funds too early (unstake) but that's where the similarities with traditional CoDs end.
First let's throw the concept of terms out the window. Why feel obligated to lock a new deposit every year or have your money stuck on a deposit for longer than that, when you can just decide when to withdraw your funds? So, we've built EQNOX to last years and years.
Minimum locked amount? How about 1 EQNOX? On blockchain everyone gets the same chance. After all, isn't the purpose of DeFi to break the barriers imposed by these financial institutions?
Yearly interest? Daily interest sounds way more fun! Not only does it make the interest gained extremely flexible, but you'll also be able to see your investment grow every day. To add to this, the interest varies based on the ratio of staked and unstaked tokens, so the rates provided on this article are the minimum yield you'll get!
Now for interest and penalties. Think about the seasons for a second. You've got ❄️ winter, 🌿 spring, ☀️ summer, and 🍁 autumn. These are always predictable, and while they differ in both hemispheres, EQNOX uses the northern hemisphere's seasons. Wouldn't it be nice to have this sort of predictability on our deposits?
Say that it's summer, and you want to make the best out of it. How are you going to enjoy a day at the beach when you must worry whether you have deposits ending this week or not? So, while our interest is fixed at each season, the penalties follow a linear function from the first day of the year (where they are at their highest) to the first day of autumn (where they're at 0%). Let's start with winter.
❄️Winter is the coolest season (both literally and figuratively). This is the best time to join EQNOX as the interest is highest (around 1.83%, daily, during the first year). This is also when the penalties are at their highest (around 25% at the first day of the first year).
After 91 days, we switch to 🌿spring. Spring retains a high interest so don't feel disheartened if you're finding this article in April! By then the penalties should be substantially reduced (around 67% of the initial penalty).
Then comes ☀️summer with longer and warmer days. By now the penalties have dropped about 35% of the initial penalty and your interest is still high (around 1% in the first year).
And last, but not least, 🍁autumn. This is an important season for every participant. The penalties reach 0%, so you can unstake your deposits, withdrawing both your funds and interest. You can then start new stakes (you'll receive a minimal interest for the rest of this season) or sell some of your EQNOX on PancakeSwap.
So long story short, stake in ❄️ winter, unstake in 🍁autumn. Easy-peasy!
Now that you get the gist of what EQNOX is, you might have a few questions. These are some of the few we got:
Q: How long can a stake last?
A: Years. Usually blockchain networks have a limitation, so you'll commonly see Certificates of Deposit that have a limit of fifteen years. With our "Accounting" feature, you can end a stake bit by bit at your leisure instead of ending it all at once. This allows you to have stakes for thirty or even forty years! Be wary though, that once you start accounting a stake, it won't gain any more interest.
Q: Is it a fixed 1.83% daily yield?
A: During the first 91 days. After that it will decrease to 1.465% in spring, then to 1.098% during the summer and 0.014% during the autumn. When the new year comes, it'll go up to 0.733%, and act in the same manner as the first year. It's worth notice that the autumn rate is always fixed at 0.014%. After six years, the rates will fixate on 0.014% during every season or, if you would prefer, around 5.11% yearly. Check the table below.
Q: Do penalties remain at 0% after autumn?
A: No. After the first year, by New Year’s Eve, the penalty to unstake is 75%. It will slope down again until it reaches 0% at the beginning of autumn. At the third year, and onwards, the penalty starts at 100% and follows the same pattern as the previous years. So, you can see the first two years as a grace period to grow your investment with reduced penalties!
Q: Where can I get EQNOX?
A: You can get it on PancakeSwap or you can participate in our auctions. The auction lasts for 91 days. By participating in it, you'll get a share of the daily auction pool in the form of a stake, and you'll also have a 20% chance of getting your money back. The only thing you need to participate is at least 10 BUSD. In addition, for every friend that participates with your referral in an auction, you'll get 10% EQNOX!
Q: How does liquidity build on EQNOX?
A: Auctions are great for this as they help us build liquidity through an Automatic Market Maker. This means that more than half of the BUSD put into the auction goes straight to the liquidity pool.
Q: The supply keeps changing every day. What's up with that?
A: EQNOX supply is based on three factors. The first is the amount at the liquidity pool and the circulation supply. These two numbers are the ones you see in most platforms. Then, there's the amount that is distributed in auctions. This amount is only minted when the day ends, in the form of stakes, so it won't show up on said platforms. And then, there’s all the EQNOX in stakes. As of today, 76% of all EQNOX in existence is staked, so it won't appear in those platforms as well. The best way to see the total supply is by checking our website, on the dashboard tab.
Q: If the supply keeps increasing when stakes are ended, won't there be a substantial surplus of EQNOX?
A: Not necessarily, and to answer that, we'll need to take a technical approach, so bear with me. Stake interest is based on the season's interest, the total supply and something that we call "shares". A share is, by definition, a product of the act of staking, and as such, it has a cost (right now it’s around 1.47 EQNOX). When you stake EQNOX, that amount is burned and converted into shares. Whenever you end a stake, if it was profitable, the share price increases. That means that if you were to create a new stake, you would need more EQNOX to get the same number of shares!
As we are heading to our fourth month, we see that EQNOX has a potential role as a decentralized financial activity.
It grows everyday with the support of a great community. We have been evolving our contracts towards something truly owned by the community and we are working nonstop to provide new features to EQNOX, such as decentralized stake exchanges and Pulse Network releases.
What the future holds for EQNOX is an unknown variable. Whether it’s going to have new services over it or be in other chains is everyone’s guesses. What we know for sure is that we want to see it grow by leaps and bounds. So, check us out at our social media, join us on telegram and give EQNOX a try!