Sirwin Launches on Ethereum to Solve DeFi's Unsustainable Token-Economics

By Crypto Guys | Navid Ladani | 9 Dec 2021

With over $204 billion in TVL and market dominance of 6.0%, decentralized finance [DeFi] has experienced an exponential rise in interest and value. Dispelling the need for central authority systems, this nascent crypto trend rewards token holders with annual percentage yields [APY] for putting their tokens to work. Albeit on the path to global adoption, a few problems plague this budding market. 


The inability of DeFi project tokens to retain value has been identified as one problem facing the emerging crypto trend. Most DeFi protocols have a large percentage of the total token supply distributed unfairly to development teams, community members, founders, and shareholders. For example, Compound, one of the largest DeFi protocols, only distributes 45% of its total token supply to platform users. The remainder, however, is shared amongst VCs, founders, dev team, community members, etc. 

Furthermore, flight to other protocols when reward percentage dwindles is yet another sticking point of the DeFi space. Owing to the inherent trait to seek personal gains above everything else, DeFi liquidity mining, unfortunately, has become a short-term activity. Users will quickly segue to a new protocol promising higher APYs. 


Brinc Finance as a Solution 

A dual token protocol—$BRC and $gBRC, Brinc Finance [] is the bonding curve token protocol with a unique token that has been built to mathematically increase in price. Backed by assets on the on-chain reserves, $BRC holders are incentivized for owning this token. 

Fair Token Distribution System 

Generally, for DeFi protocol tokens to retain value, over time, a fair distribution of these tokens is paramount. A fair token sharing system reduces, to a greater degree, the chances of investors dumping colossal amounts on the market. Since most of the owned tokens are purchased and not received for free or pre-mined it is unlikely that a dump will occur. Integrating this concept, Brinc Finance will not distribute free or pre-mined tokens to investors at remarkably low prices. 

Besides governance, which is an impressive way of getting community members involved in the decision-making process, there has to be something of real value to investors - something that will propel them to stay not only as members of the community but users or investors. 

Sustainable incentivization! 

Brinc Finance, unprecedentedly, has a second token, $gBRC. $gBRC is a governance token that will serve as a reward to users that own and stake $BRC. However, staking both $BRC and $gBRC will yield more rewards, that's not all, the latter has the potential of unlocking notably increased staking rewards. 

These benefits make $gBRC much more irresistible to hold, especially for investors looking to triple their returns on investment [ROI]. 

Locked Staking and Protocol-Owned Liquidity 

Earning rewards for providing liquidity played a key role in the proliferation of the DeFi space and not surprisingly, a ton of projects have been modeled after most of the foremost mining protocols. The problem, as mentioned earlier, is the innate ability of users to jump from one protocol to another in search of higher yield offerings. Through its locked staking approach, Brinc Finance allows users to stake for 30, 60, and 90 days, respectively. By committing users, conditions them to participate in the protocol longer than they would necessarily agree to. 

Prioritizing incentivization, Brinc Finance offers higher rewards for users that opt for the 90 days staking period. Users can withdraw in the middle of the staking period as part of the project’s “emergency withdrawal” scheme, however, all rewards accrued will be forfeited. 

Introducing yet another unique concept, Brinc Finance will sell tokens to users upfront instead of the common practice of lending liquidity to users. The protocol will own almost all liquidity, requiring users to exchange their assets to own $BRC and $gBRC.

While most DeFi protocols are in a ruthless cycle where the prices of tokens continue to fall as investors, VCs, development team members, and stakeholders dump them on the market, can mitigate risks by incorporating a fair token distribution system, locked staking periods, and protocol-owned liquidity. 

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Navid Ladani
Navid Ladani

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