Introducing the Burn Auction Module on UX Chain
Overview
The UX Chain is excited to unveil the Burn Auction Module (BAM!), a unique feature designed to reduce the circulating supply of UX tokens while offering users a chance to acquire protocol revenues. This innovative module aims to enhance the UX ecosystem and provide an engaging experience for our community.
What is the Burn Auction Module?
The Burn Auction Module allows UX token holders to participate in weekly auctions where they can bid on collected protocol revenues. By participating, users contribute to reducing the overall supply of UX tokens, potentially enhancing their value.
The auction pool is funded from three main sources:
- Lending fee share: this will strictly apply to the largest liquidity assets which naturally have the highest volumes (i.e. Atom, Celestia, USDC, USDT). The fee share ratio and targeted pools will be voted upon using 2 new x/leverage parameters (LeverageRevenueRate and LeveragePools).
- mToken fees: these will be allocated in their entirety.
- Squid Router fees: if an IBC transfer does not include fees, a commission will be taken and later exchanged for UX tokens which will also be burnt.
Why Participate in the Burn Auction?
- Acquire tokens: Gain a diverse collection of tokens from the Umee ecosystem.
- Support token value: Help regulate the circulating supply of UX tokens, contributing to the token’s overall health.
- Rewards: The auction pool is funded by high-volume assets and fees, potentially offering substantial rewards.
The Auction Process
- Collection: The protocol collects a portion of the fees, creating a diverse "basket" of tokens for the auction.
- Bidding: A 14-day auction period starts, and UX token holders can place bids.
- Winning: The highest bidder wins the entire "basket" of tokens.
- Burning: The UX tokens from the winning bid are permanently removed from circulation.
- Returning bids: All other bids are returned to the bidders.
- New auction: A new auction begins immediately after the previous one ends.
Key Considerations
Why Bid?
Bidding allows you to acquire valuable tokens while supporting the UX token’s deflationary mechanism.
No Bids?
If no bids are placed, the collected tokens will carry over to the next auction, increasing the potential size of the future basket.
Fee Collection!
Fees are collected from lending activities, mToken transactions, and Squid Router commissions, ensuring a diverse auction pool.
Conclusion
The Burn Auction Module enhances the UX Chain ecosystem by combining token value maintenance with engaging community participation. By reducing the circulating supply of UX tokens, UX aims to create a healthier, more valuable token for users?. UX encourages everyone to participate in the burn auctions and take advantage of this unique opportunity to contribute to the network's growth and stability.
Stay tuned for more updates and detailed guides on how to participate in the burn auctions. Join our community to share your experiences and insights on this exciting new feature!
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Best regards,
The UX Team