Burning $MFER
Describing the controls to decrease the circulating supply of the token
Last updated
Describing the controls to decrease the circulating supply of the token
Last updated
The Fuckery Protocol has burning mechanisms to deflate the supply of $MFER over time.
Burning $MFER is encouraged as it balances the circulating supply and increases the share of the Fuckery Protocol for the remaining $MFER holders.
This dynamic rewards the active participants in the network and limits the ability of non-participants to benefit unfairly over time.
Each burning mechanism is facilitated via an open-source, audited, permissionless smart contract function owned and managed by the DAO.
The protocol returns a portion of the $ADA in the Reserve to the burner using smart contracts.
How much $ADA is returned is based on a combination of factors, including but not limited to:
How much $MFER is being burned
The current Reserve collateralization level
Global $MFER burn rate over time
The Reserve Target, controlled by Governance Options, sets collateral health that influences the total amount of $MFER that can be burned and how much $ADA is returned to the burner.
Burn Cooldowns are a protocol-level law that controls the amount that can be burned over time. If the cooldown is reached, a freeze period of burning $MFER via the Burn smart contract function will start.
The smart contract prevents too much $MFER from being burned simultaneously and frequently over time. Rules also incentivize $MFER to be burned if the protocol is over the Reserve Target and no burn cooldowns are enacted because of the increased amount of $ADA returned to the burner.
Because the $MFER token has value to its network participants, there is a mechanism for accepting $MFER from another party in exchange for goods or services.
This can range from minting NFTs, buying merchandise, facilitating secondary sales of NFTs, paying for contracting work, donations, and countless other possibilities.
The Exchange smart contract function accepts $MFER on behalf of any network participant using an API (pay-in address), a microapp (ex: NMKR Pay), or the MFER Dapp (custom-link to website).
Depending on the source of the Exchange and the configuration of the Governance Options that control it, a portion of the $MFER accepted will be burned automatically, with the remainder going to the receiving party. For example, the API/Microapp/MFER Dapp burns 5% of all $MFER by default, a future mint may burn 50%, and a derivative project can agree to burn 10%.
$MFER is a native token on Cardano and can be moved between two parties like any normal transaction. The Fuckery Protocol provides additional tooling to participants with varying levels of technical acumen. Suppose you had a developer and a custom website for your derivative NFT collection. In that case, you could use the API/microapp to accept payments in $MFER and not have to build that code while providing value to the protocol for using it. Suppose you organized Poker nights with $MFER buy-in. You could use the MFER Dapp to allow anyone to join using their MFER iD and route $MFER to a multi-sig wallet or smart contract that splits winnings.
All burning actions are publicly broadcast with all data available on-chain and in the accompanying MFER Dapp for transparency and easy consumption.
