What is the flywheel of TiTi Protocol (Use-TiUSD-To-Earn)
Last updated
Last updated
Use-TiUSD-To-Earn (Use-To-Earn) is a brand-new stablecoin tokenomic concept invented by TiTi Protocol, which means users can both passively and actively earn TiTi and protocol fees while they are using stablecoins as usual. In the TiTi Protocol, the Use-To-Earn oriented behaviors are multiple and varied. For example, after you enter the TiTi Mainnet, you may swap USDC to mint TiUSD. In this process, you have accidentally triggered two behaviors of Use-to-Earn: Buy TiUSD in TiTi-AMMs (Swap) and hold TiUSD. This is what we said, Use-to-Earn is easy to trigger accidentally.
Use-to-earn is the key part in our design. The system can collect fees and capture value by our reserve from other yield farming aggregators. Most of the parts are used to reward TiUSD users. For the users, they are motivated to use TiUSD more often because of higher revenue. As a result, TiUSD will enjoy a higher cap, transaction volume and large holder base. Meaning the user adoption will be higher, which will enable the protocol to collect or capture more fees to motivate them. Economically speaking, it’s a virtuous cycle.
To be simple, Use-to-earn means that users can earn both passive and positive revenue or rewards by simply holding or using the stablecoin issued by our protocol.
The technical solution of Use-To-Earn is based on the implementation of both on-chain and off-chain. The on-chain part is verified by means of Merkle Proof. The off-chain part is responsible for the distribution of incentives based on the user’s behaviors using TiUSD.
The user’s incentive behaviors and incentive algorithm are disclosed to the community on Snapshot. Such a technical solution ensures the fairness and transparency of the entire process. At the same time, it allows the protocol to carry more complex incentive models, which also provides greater flexibility for TiTi Protocol’s market operations. Such as the protocol can encourage incentive users to use TiUSD to buy NFT, or stake TiUSD to an external DeFi product, etc.;
Regarding the setting of the incentive algorithm, in the early stage, it is set based on the team’s major concern to avoid attacks or abuse by users. The core is to incentivize users’ behaviors with TiUSD that are in the benefit of the protocol and users. It is not necessary that users frequently mint TiUSD from TiTi-AMMs. They can buy TiUSD in 2nd markets as well. As a trading medium, they can choose to use TiUSD in other scenarios.
For example if you are farming with 10 k $USDT and 10k TiUSD in the Aave, your normal earning let's assume, is $10 with USDT. But with TiUSD, your earning will be always more $10, be it $12 or $11. The extra $1~$2 is from use-to-earn and stems from protocol fee. It seems that TiUSD is an inter-bearing stablecoin pegging to $1, this allows it to resist inflation with internal design. But the algorithm and design is much more complex, it’s really something exciting and new that can make a difference.
In the bootstrapping phase, there are mainly three behaviors that are counted in Use-To-Earn: Buy (Mint) TiUSD in TiTi-AMMs (Swap), hold TiUSD, buy TiTi in Uniswap. In TiTi Protocol, when users buy and sell TiUSD in TiTi-AMMs (Swap), it means that they mint and redeem TiUSD. Specifically, when users perform the above three operations, they will be able to obtain additional income. In the early stage, the reward for Use-To-Earn is $TiTi token; in the later stage, the reward for Use-To-Earn is $TiTi token & protocol fee. The protocol fee comes from PAV, Protocol Added Value. Because, in Swap (TiTi-AMMs), Users’ trading only counterparty is TiTi-AMM itself. TiTi-AMMs is able to, always & sustainably, collect the PAV trading slippage instead of being taken away by sandwich or arbitrage bots. This earning mechanism can greatly promote the adoption of TiUSD. In the middle and later stages of project development, the behavior of Use-To-Earn will be more abundant.
As long as any defi users use TiTi mainnet product, it is possible to passively trigger Use-to-Earn. The operation is very simple and the threshold is low. Any of the three behaviors of Buy TiUSD in TiTi-AMMs (Swap), TiUSD Holder, and Buy TiTi in Uniswap can trigger Use-to-Earn, and you can earn income . The more times you trigger, the more rewards you will get.
Unlike some stablecoin projects, Use-to-Earn does not require cumbersome operations such as opening positions and staking. Simply buying TiTi & TiUSD and holding the stablecoin TiUSD can trigger Use-to-Earn. At the same time, the technical architecture also guarantees the distribution of protocol fees can be adaptable to more complex incentive models, which also provides greater flexibility for TiTi Protocol’s organic growth and expansion.
Use-to-Earn rewards are very multiple and varied. In the early stage of the TiTi Protocol mainnet launch, the reward for Use-to-Earn will be TiTi token, which is the governance token of the protocol. In the later stage of the TiTi Protocol mainnet launch, the reward for Use-to-Earn will be USDC, which comes from the protocol fee, that is, slippage. After the project introduces multi-assets, the income will be diverse, such as WBTC, eth and other native crypto assets.
Use-to-earn, the first ever stablecoin tokenomic design that will tremendously boost decentralized stablecoin user adoption. TiUSD is actually an inherently interest-bearing decentralized stablecoin. Users will earn additional interest during the process of using, trading and holding. Currently, there is a lack of such decentralized stablecoins in the market. The use-to-earn design can effectively improve the adoption and market competitiveness of TiUSD.
