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  • Introduction
    • YieldFu: The Fu
  • YieldFu
    • $FU Value accrual
    • Tokenomics
    • Staking $FU
    • Bonding Treasury Management
    • CEX/ DEX Arbitrage System
    • Burn-To-Earn
    • Delta Neutral
  • Roadmap & Glossary
    • Roadmap
    • Glossary of Terms
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  • Partner token & burn weighting
  • Deflationary Effect & burn-to-earn
  • Strategic Considerations for Users
  • Benefits of the Burn-to-Earn Mechanism
  1. YieldFu

Burn-To-Earn

The Burn-to-Earn mechanism is an innovative feature of YieldFu that allows users to burn their $FU tokens in exchange for exposure to partner project tokens. This mechanism serves multiple purposes within the YieldFu ecosystem.

Partner token & burn weighting

Burning $FU tokens provides users with a unique opportunity to gain exposure to a diverse range of partner projects. YieldFu carefully selects partner projects to ensure they offer quality and potential value for participants. By burning $FU tokens, users gain access to a pool of tokens from various partner projects, which provides diversification through a single action.

The burn weight determines a user's share of the partner token rewards. It is calculated by dividing the amount of $FU burned by the user by the total $FU in the burn wallet. This calculation is dynamic and updated as new burns occur and rewards are distributed. Users can track their current burn weight through the YieldFu dApp.

Partner project tokens are distributed to users based on their burn weight. The frequency of these airdrops will be specified by the YieldFu team, potentially occurring weekly or monthly. The reward for each user is calculated by multiplying their burn weight by the total partner tokens available for distribution. Users can claim their earned partner tokens through the YieldFu dApp.

Deflationary Effect & burn-to-earn

The burn mechanism contributes to reducing the overall supply of $FU tokens. Burned tokens are permanently removed from circulation, creating a deflationary pressure on the token supply. This regular burning activity supports the long-term value of the remaining $FU tokens.

Strategic Considerations for Users

When deciding to burn $FU tokens, participants should consider several factors:

  • Opportunity Cost: Burned tokens cannot be used for staking or other protocol activities.

  • Partner Project Potential: Evaluate the potential value of partner projects before burning.

  • Long-Term vs. Short-Term: Consider your investment horizon and risk tolerance.

Benefits of the Burn-to-Earn Mechanism

This mechanism offers several advantages:

  1. Diverse Exposure: Access to a range of partner projects through a single action.

  2. Supply Management: Contributes to the scarcity of $FU tokens.

  3. Ecosystem Growth: Encourages partnerships and cross-protocol collaborations.

  4. User Choice: Provides an alternative to staking for yield generation.

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Last updated 8 months ago