A simple guide to PureFi (UFI) token utility
PureFi project is bringing an innovative and highly-awaited solution to the market that will make users’ journey through the DeFi world safer and more convenient. The guys behind PureFi have not only introduced a game-changing solution but also developed a highly functional token — PUREFI ($UFI) Token — to facilitate transactions within the ecosystem while offering great opportunities for all parties involved. Hacken Foundation believes that the idea behind this project is worth your attention and we hope that the $UFI utility will make this token a popular instrument among ethical investors.
But before speaking about the token utility, let us remind you of the idea behind PureFi.
PureFi is a one-step compliance protocol for Decentralized Finances providing a full-cycle solution for crypto asset analytics and AML/KYC procedures.
PUREFI token (UFI) is the ERC20 token minted on the Ethereum blockchain and BSC empowering the PUREFI protocol. Of course, you may ask: “Great, but what can I do with it now? How can I make money?” And we’re getting there.
What is UFI and what about its functionality?
For better understanding, we would like to draw a real-life example. Let’s imagine that you’re on a trip to London and you decide to use public transport to reach different places. But to take a bus you need a valid ticket. In our case, a foreign country is DeFi and your bus ticket is UFI, voilà!
The key utility of UFI is to provide access to PureFi’s services so that you can get to your final desired destination. The more rides you take, the more tickets you need.
But the number of tokens or “tickets” per se is limited on an automated market and you and your travel buddies will have to borrow them from holders. We offer you to become a holder now and become the early buyers of UFI (“the tickets”) and then lend them to users (“the tourists”) to get partial profit.
The key idea is to boost the token liquidity and create the conditions under which its price would gradually rise. To this end, a smart contract is going to release the derivative of the main token to allow a holder to get its % of the profit in the desired tokens. Tokens circulate inside the lending protocol and make money.
The travel doesn’t stop its course due to the pandemics, it only takes a bit different form.
What are the existing service usage models?
There are four levels of service depending on your demand for PureFi services. In all models, PureFi accepts most major cryptos, UFIs, and Fiat for payments.
There are several types of players in the market:
- Basic — occasional use of services. Basic tariffs are applied. A user can simply buy our services using any major cryptos, UFIs, or Fiat.
- Subscription — more frequent use of services. A user can subscribe for 6 or 12 months service packages and become eligible for the overall subscription discount (SD). To get a discount a user just needs to choose the desired subscription period. Then this user is issued with an expiring and non-tradeable derivative of UFI (UFI-D) linked to his service package via Non-collateral PURIFY lending protocol. Normally, a user will have more UFI tokens on balance. Otherwise, more UFI tokens can be borrowed from the PureFi lending protocol. There is no need for any manual activities since all technical support is automatic.
- Professional — big players: DEX, LP, funds, protocols, etc. are eligible for professional packages discount (PD). Pre-conditions — staking of UFIs that may be also borrowed through the Non-collateral PureFi lending protocol. The same requirements as for subscription-based customers are applied. However, the Professional package normally requires more UFIs on balance e.g. staking. to get even bigger discounts.
- Issuer — a compliance provider vetted with PureFi standards. Pre-conditions — UFIs staking. The Issuer package requires holding more coins on balance compared to a Professional one to get the biggest discounts. To add more options rather than just purchasing more tokens, we offer a lending-borrowing mechanism you can get familiar with below.
Non-collateral PURIFY lending protocol
PureFi lending protocol is a pool attached to an audited smart contract to supply extra liquidity to the PureFi ecosystem and give our community extra incentives. It allows big players to borrow rather than purchase. A small commission is charged for a derivative token (UFI-d) that can be used for staking and getting a service discount.
UFI-i: an interest UFI token proving that a lender has contributed UFIs to the pool issued immediately upon lending UFIs to the pool. It represents the lender’s right to earn interest on his UFIs if someone else borrows them.
UFI-d: an expiring and non-tradeable derivative of UFI that will be issued to a borrower based on the length and volume of UFI borrowed.
$Fee — its size depends on how much and for how long a borrower borrows the UFI and what is the balance between lent and borrowed tokens in the pool — the more tokens are already borrowed, the higher the fee.
In the PureFi lending protocol, a borrower does not need any collateral, thus, there is no risk associated with borrowing. Lenders always get their interest in liquid coins paid by borrowers as fees. Lenders may always withdraw their UFI if they don’t want to participate in the fee distribution anymore.
How does the protocol make money and create the required token liquidity?
The simple answer is by splitting fees inside the protocol. The more liquidity is supplied, the higher the price of the UFI token. The splitting model is flexible and attractive for long-term investors. Commission changes on the weekly basis and depends on 2 indicators:
- the weekly weighted average price of UFI token in the liquidity pool (LP) in the preceding week;
- the maximum price of UFI token during the public round.
If the weekly LP UFI price is lower than the max price during the public round, then PureFi will send 100% (!!!) of the fee into the LP.
Let’s look at how it works in detail.
Fees distribution and UFIs Liquidity Pool
All commissions for PureFiI protocol are split between OV (Operational Vault) and UFI LP (Liquidity Pool). OV funds are used to cover operational expenditures on protocol maintenance and infrastructure support. UFI LP is a means of UFI liquidity support and secondary token circulation.
The proportion between fees distributed to OV (Operational Vault) and UFI LP (Liquidity Pool) depends on the balancing coefficient (BC) that demonstrates the current demand for UFI token: the higher the demand, the lower the distribution of the fees to Operational Vault:
- the maximum price of UFI token during the public round
- The weekly weighted average price of UFI token in the LP for the preceding week
All fees are distributed to the UFI LP.
The proportion distributed to OV (Operational Vault):
Locked tokens early liquidity protocol
Earn money by locking tokens with PureFi. The early token holders will earn more since they will be able to provide their locked tokens to the PureFi lending protocol and get rewards. The financial model is built upon the optimal correlation between the UFI lock-in time and the expirable lending mechanism. For example, if half of the UFI lock-in period has already passed, then the lending option will be enabled automatically. In this case, the token holder can earn additional profit even before the unlock. The lending period is flexible but cannot be less than x2 of the remaining lock-in time.
PureFi is implementing a new and unique early liquidity protocol for the locked tokens to provide additional benefits to the early UFI tokens holders and add extra liquidity to our ecosystem.
All UFI token holders can join the Non-collateral PureFi lending protocol if they meet the following criteria:
- Time of the locked UFI tokens holding
- Period of UFI tokens lock
- Period of UFI tokens borrowing from Non-collateral PureFi lending protocol.
Generally, PUREFI (UFI) token is likely to become a highly functional instrument in the hands of investors. It will also become the driver of PureFi’s growth that will be beneficial for all parties involved. Hacken Foundation prioritizes maximizing the value our community members get. That is why we strive to make you familiar with the opportunities PureFi brings to the industry at the early stage so that you may be among the luckiest investors standing at the forefront of PureFi’s future great success.
Don’t miss your chance to support the groundbreaking project!
About Hacken Foundation
Hacken Foundation gives a boost to innovative cybersecurity solutions by empowering the Hacken Ecosystem through HAI Tokenomics. All projects pass a strict pre-approval procedure before entering Hacken Foundation so that potential investors may be absolutely confident of the projects’ transparency and protection of their assets. Hacken Foundation has successfully launched 4 projects including HAPI, disBalancer, ArtWallet, and PureFi. It is just the beginning of our long journey. We keep on looking for solutions that will make difference.
View more info about PureFi at:
Telegram Group: https://t.me/purefipro
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