In the ever-evolving world of decentralized finance, Astrovault stands out as a beacon of innovation thanks to its dedication to sustainable business models. Astrovault, a protocol conceived with purpose, seeks to revolutionize the DeFi space by emphasizing revenue generation and reducing reliance on external capital.
Purpose and Creation of Astrovault:
Astrovault, at its core, is designed to be more than just a DeFi protocol; it's a business-minded approach to decentralized finance. The purpose behind its creation is rooted in establishing sustainable practices, ensuring longevity and resilience in the rapidly changing crypto ecosystem.
Astrovault recognizes the critical importance of sustainable business models within decentralized protocols. In an era where environmental concerns and economic viability intersect, they aim to set a new standard by demonstrating that sustainable practices coexist with financial innovation.
AXV Token Utility:
The AXV token lies at the heart of Astrovault's ecosystem, serving as a multifaceted tool to drive the protocol's sustainability and growth. It will be integral in the creation, capture, and distribution of value across the protocol.
Protocol Owned Liquidity:
One of Astrovault’s main differences from their competitors is the POL (protocol-owned liquidity), this model has been used by centralized exchanges where they don’t only earn trading fees but also staking rewards securing proof-of-stake networks with assets they custody.
By following this model and as the POL grows, Astrovault’s costs decrease (emissions) allowing net profits to rise over time accordingly.
Emissions and Counter-Inflation:
Astrovault addresses emissions and counter-inflation strategies as pivotal components of its economic model. The shift from liquidity yield to fee-based revenue as the protocol-owned liquidity grows represents a calculated move toward financial independence.
AXV will have a fixed emission schedule of 100M tokens per year. At TGE, the initial emissions of AXV will be:
- 1% GRVT8 (Traders)
- 15% liquidity providers
- 5% AXV stakers
- 79% AXV DAO
Eventually, the emissions will be moved from the DAO towards the liquidity providers with the following target:
- 3% GRVT8
- 67% liquidity providers
- 5% AXV Stakers
- 25% AXV DAO
Liquidity pool emissions will be decided by the AXV DAO which will be responsible for the breakdown and parameters for an optimal allocation.
A key aspect that has to be taken into account is AXV price fluctuation. This is mitigated with a dynamic balance that pulls back emissions during price appreciation and adds emissions during price depreciation with defined parameters.
Deflationary Mechanisms:
Astrovault employs simple, yet clever, deflationary mechanisms that boost its sustainability.
- 100% of the trade fees in standard pools are used to buyback and burn AXV.
- 100% of the LP rewards earned by the POL are burned.
As a practical example, if AXV’s price drops, the rewards to liquidity providers will also drop, which may lead to liquidity outflow. However, this means the POL grows in proportion to the total liquidity in the protocol, which translates to higher AXV rewards that will subsequently be burned.
In the extreme case that all liquidity leaves the protocol, then all AXV rewards will be burned. And yet, revenue from the existing POL would persist. This highlights the dynamic balance between expenses, revenue, and liquidity composition.
NFT Integration:
Astrovault embraces NFT integration, introducing independent multipliers in reward contracts for NFT partnerships. This not only boosts the primary and secondary sales of NFT projects but also opens up the potential for an additional revenue stream through NFTs, further diversifying the protocol's income sources.
Governance:
The AXV DAO underpins the Astrovault ecosystem and, as such, holds the governance power of a constantly growing treasury of assets that consist of governance tokens. This means AXV token holders will have governance power over other chains and applications through a series of staking and liquidity pools.
In conclusion, Astrovault is a testament to a business-minded DeFi approach, prioritizing revenue generation and minimizing reliance on external capital. The protocol's commitment to turning off inflation signals a prospective shift toward a deflationary AXV token, marking a significant stride toward sustainability in the decentralized finance space.
Astrovault introduces innovative economic models and sets a precedent for future DeFi projects to integrate business-minded strategies for long-term success.
