How To Use Equilibrium’s NUT Token

By EquilibriumEOSDT | Equilibrium_EOSDT | 2 weeks ago

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Native Utility Token (NUT) is the core utility asset for the Equilibrium DeFi framework, widely used within products built on top of it. NUT grants access to many of these products’ features and governance powers. It is used for paying fees, accessing liquidated cryptocurrency collateral, voting for block producers, managing the framework, and much more. This article will provide you with everything NUT can do within the Equilibrium-based EOSDT stablecoin model, whether they take place on or off the platform.

Internal currency

One of NUT’s main applications in the Equilibrium framework is to serve as an internal currency for all the products and services built on top of it. NUT is a gateway to paying commissions, getting discounts, and taking part in revenue distribution.

All acquired NUT gets burned to maintain its deflation model (the supply of the token is permanently reduced). We also intend to establish a NUT fund to support further framework development, and a portion of NUT fees will be transferred to this fund instead of getting burned.

Fee coverage

In most Equilibrium-based products, users pay fees in NUT. For now, Equilibrium’s EOSDT stablecoin has a few fees. Two of them — the Equilibrium fee (an interest rate on users’ EOSDT holdings) and the transaction fee (payable every time users make EOSDT transfers between blockchain addresses) are currently set to 0%. NUT can be used for covering a third fee, called an admin fee. This is a commision set for withdrawing EOS collateral from EOSDT’s smart contracts. In other words, people who want to close their EOSDT positions and get back their EOS funds should pay an admin fee that accrues in NUT. This is currently set to 1% APR.

Access to discounted collateral

The liquidator contract constantly offers undercollateralized EOSDT positions (and the collateral associated with them) for sale at a discount. Arbitrators are those looking for these risky positions and buying their “bad debt” EOSDT or collateral from the contract. For this reason, arbitrators may submit NUT to the liquidator contract to buy back liquidated collateral at 6% off the current oracle price.

Profit from REX redistribution

EOSDT’s integration with REX lets collateral holders have the same passive income as before, combined with our REX revenue distribution mechanism.

So how does it work? EOSDT smart contracts stake the EOS collateral pool to the REX (resource exchange) market. EOS’s REX lends EOS to the system, earning fees on that stake when others borrow it in the form of CPU/NET resources. EOSDT smart contracts receive REX profits and transfer a portion of it to the liquidator smart contract. The received EOS stake can be bought with NUT tokens there at a 6% discount. The remaining portion of REX profit goes to EOS collateral holders in proportion to the amount of collateral they hold.

Transaction fee redistribution

The system aims to take a small portion of EOSDT from every on-chain transfer,  similar to real-world payment systems. Received EOSDT gets partially distributed among the position holders who generated the EOSDT supply. Another portion of acquired fees will be offered to arbitrators in exchange for NUT at a discount.

Governance token

NUT holders play an important role in governance for Equilibrium-based projects. They have voting rights to submit and vote on proposals to change the system parameters.

EOSDT management

EOSDT depends on a decentralized autonomous community inspired by EOS’s blockchain governance, but we’ve made significant changes and improvements beyond that. We grant the governance model more power, letting the community set and modify the key parameters that drive the way the entire system operates.

NUT holders are actually stakeholders in the decentralized governance process, and they have a say in every step of framework management. Anyone holding our NUT governance token will be able to generate a proposal to change platform parameters, like letting the community vote on their proposed alterations to the liquidation penalty or collateralization level. If a proposal gets enough votes, it becomes a delayed action and owners get rights to modify that specific parameter.

Block producer voting

NUT holders can already vote for EOS block producers with the Equilibrium EOSDT proxy on-chain voting system. The block producers that get the most votes will be added to Equilibrium’s EOSDT proxy, and they’ll be staked with EOSDT’s entire collateral pool.

BP candidates compete for the community’s votes by pledging a daily reward paid in EOS. 70% of rewards from applied BPs will be distributed to collateral holders, and 30% goes to NUT holders.

It used to be that only ten block producers would be staked with the framework’s collateral, but we have already increased this to 20 in a transitional phase. We are on our way to supporting 30 staked BPs in the near future — stay tuned for a formal announcement soon.

Beyond the framework

When tokens are involved in more use cases and drive more adoption, they bring more value to their holders. Here we’ll talk about a scenario where NUT plays an important role in rewarding users, developers, and businesses.

Partner program rewards

Ecosystem contributors can get NUT as a reward in the EOSDT partner program and earn 50% of the NUT admin fee. For these purposes, any web application or dApp can integrate the widget, allowing for the generation of EOSDT stablecoins and managing all open position operations in a native interface. When a dApp’s EOS address is registered in EOSDT’s smart contracts, their teams get 50% of all NUT-based fees paid by stablecoin users through the integrated widget.

Partners can also build their own frontend products (based on EOSDT smart contracts) that include any operation where NUT is used for paying fees or buying discounted collateral. In this case, they are able to use this referral program to generate revenue in the form of NUT tokens.

Grants for DeFi developers

Equilibrium feels a responsibility to foster innovation within the DeFi space and support the emergent industry. The project is now launching a grant program for developers building DeFi products on top of the Equilibrium framework, offering up to $100,000 in NUT.

The program is designed for projects that use any of the existing wireframe prototypes offered by Equilibrium, or that have built their own product ideas on top of it. Both types of projects are eligible to apply for this grant.

Equilibrium bug bounty

Our bug bounty program rewards anyone who’s interested in improving the framework’s overall robustness and security. Software engineers and bug hunters are invited to search our codebase for potential exploits in order to receive up to $10,000 worth of NUT if they find vulnerabilities or logic issues.

NUT regulation

Equilibrium recently obtained a legal opinion in the US that sees both of our core assets, EOSDT and NUT, considered as utilities.

Where to find it

NUT is available on a wide number of exchanges, including HitBTC, Changelly, Bancor, YOLO, and Cripto InterCambio. Check decentralized exchanges like Newdex, Dexeos, EOSDAQ, and Findex. You can also easily acquire it if you use wallets like Huobi Wallet, Token Pocket, EOS Lynx, MathWallet, MyKEY, Meet.one, Nova Wallet, Infinito, Freewallet, and many others.

You can find the complete list of our supporting partners here.

Now you know everything you need to know about NUT — it has real monetary value and plays a meaningful role in the Equilibrium ecosystem.


EquilibriumEOSDT
EquilibriumEOSDT

The multichain framework for asset-backed stablecoins and DeFi products.


Equilibrium_EOSDT
Equilibrium_EOSDT

The multichain framework for asset-backed stablecoins and DeFi products.

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