Exploring NOVA
Everything you need to know about NOVA
A Reminder of Komet’s Mission
Over the past 6 months, DeFi has brought to the world an incredibly vast and powerful set of tools to remagine what finance means. We find it extraordinarily ironic that — despite DeFi’s promise to the world of an open, transparent financial system — many of the highly valued products are very opaque and unintuitive. These high information acquisition costs create high barriers to user entry, thus closing off access many users.
We at Komet are here to change that. Through stunning UIs, intuitive design language, and extraordinary attention to detail, our goal is to make the wondrous universe of decentralized finance accessible to everyone.
It’s here!
We are extremely proud to finally release staking details for our newest member of Komet’s solar system — NOVA.
Let’s talk about its purpose first and then get to mechanics later.
What is it?
Nova is an ancillary token that functions like a first-class ticket on Komet’s journey through the DeFi universe. However, Nova does not get a free ride on this journey. Users still must hold a minimum amount of Komet in order to access the features that Nova may bring. We describe our ‘solar system’ that Komet and Nova belong to as a financial strategy collective (FSC). Nova receives white-glove treatment within this FSC.
We foresee several use cases, both classic and novel, for our Nova token:
Governance
First and foremost, Nova will be Komet’s governance token.
Proposals — such as direction of the FSC, specific strategy choice, maximum leverage ratios, stress-test requirements, overall structure of the FSC, and more — will be executed via Nova. In effect, Nova holders will shape the very essence of the FSC itself.
Primary Rights to Strategies
In traditional finance, firms will often deploy a fixed amount of capital to specific strategies. In the DeFi space, however, most strategies are open-ended, which creates a significant amount of dilution as more users join that strategy. We believe that fixed-cap strategies are a solution to this problem. As is the case in traditional finance, demand for the strategy can outstrip the capped supply for the strategy itself. So instead of issuing these rights on a general first-come, first serve basis to Komet holders, Nova holders will receive ‘priority boarding’ to access these fixed-cap strategies.
Redemption Fee Waivers
Exiting strategies prematurely can sometimes be quite costly due to liquidity issues of the underlying strategy, and in some cases, the FSC itself. Thus redemption fees exist to encourage long-term commitment and maintain predictable stability within the FSC.
Nova tokens will give users the right to waive a significant portion (or potentially all, depending on governance voting) of these fees.
Prioritized Distributions
Distributions from strategies may not always be distributed evenly across time. This can vary from strategy to strategy. Pending governance approval, Nova holders will be the first ones to receive distributions and, potentially, a small bonus on all distributions, relative to ordinary Komet holders.
Keep in mind that Nova holders who do not own a sufficient amount of Komet will not be entitled to distributions.
Priority to Recovery Distributions
As hacks, exploits, and rug pulls within the DeFi space have turned from black swan events to common occurrences (most recently with Pickle and CP3R), user protection has become increasingly critical. While we of course plan to conduct deep security analyses of the contracts we interact with, even the seemingly safest decisions can come with risk.
In traditional markets, general shareholders are often lowest on the totem pole in bankruptcy proceedings and in some cases receive nothing from the restructuring. In the event of a bug or exploit that affects our FSC, Nova token holders will receive first tier treatment in distributions over ordinary Komet holders in restructurings that may follow. This first-tier treatment may come in the form of direct distributions, rights to a new token, or other recovery vehicles.
Additional Comments on Nova’s Purpose
While we have introduced many potential use cases for Nova, it’s important to emphasize that we foresee Komet remaining the dominant player within the FSC, and believe this to be the healthiest path forward for our FSC. As mentioned earlier in this article, In order to reap the advantages of Nova, minimum Komet holding requirements will be enforced.
The precise figure has yet to be determined. We understand that some proposals described herein may be contentious to ordinary Komet holders, particularly those related to distributions. But given the decentralized nature of the FSC, we are cautious to give too much certainty on Nova’s eventual purpose, as Nova holders will ultimately determine its own fate via governance. We look forward to listening to community feedback on this matter.
Staking Basics
Staking is scheduled to begin December 2 at the end of day.
Users must stake KOMET/ETH LP tokens in order to mine Nova.
Important: Note that withdrawal will not be allowed during the first 24 hours of staking to prevent any fake Uniswap pools.
Komet Mining
Our MasterUniverse contract brings the time-tested power of the Sushiswap MasterChef with a newly conceived idea to minimize whale dominance. In line with our mission of delivering access to everyday users, this gives them a leg up over the whales!
PlasmaPower
PlasmaPower is the name of our staking adjustment, introduced in order to limit the power of whales.
The PlasmaPower calculation uses a formula to create an adjustment factor that is based on two variables:
- Your relative share of the KOMET / ETH Uniswap LP. This is straightforward
- A buff rate. The buff rate is determined by the length of time that a user stakes their tokens. It begins at 10 and increases by 50% every 24 hours, until the max buff rate is reached. The max buff rate varies depending on how much of the KOMET / ETH LP a user owns. This is where we cap the whales. The max buff rate is lowest for whales, so that they don’t accrue the largest share of Nova tokens.
The Formula
Daily rewards = Daily rewards of the mining pools * PlasmaPower / total PlasmaPower
PlasmaPower = user staked amount * buff rate
Determining whale status and max buff rate
This, again, is the key to our equitable staking mechanism. The max buff rate that a user is entitled to will vary based on how much of the Uniswap pool they own. It is determined as follows:
Casual max buff rate 100 : less than 0.1% of pool
Committed max buff rate 150 : more than 0.1% of the pool and less than 1%
Whales max buff rate 40 : more than 1% of the pool
(Want to increase your Max PlasmaPower? An NFT will be the secret to this — we will release more details soon;))
Withdrawal Fees
As we incentivize users to long term commitment to Nova and the FSC itself, we have implemented graduated fees on unstaking.
These fees will initially be very high — 30%.
However, they will decrease by 0.5% for two months, until a minimum fee of 1% is reached.
Supply Curve
As shown in the chart, the Nova supply will follow a typical staking distribution curve, with rewards halving every cycle. The total supply of Nova will eventually match Komet at 30,000. We will be publishing an update shortly with more precise details on rewards per block and when halvings take place.
Bonus multiplier
For the first 24 hours only, stakers will receive a 2x staking bonus on their NOVA!
Thank You
Finally, a big thank you to everyone in our community who has waited very patiently for this release. We are very excited to share this phase with you and eagerly look forward to building the next.
Please stay tuned for future announcements and keep in touch with us on our social channels.
TG: https://t.me/kometFinance
Twitter: https://twitter.com/FinanceKomet
Etherscan: https://etherscan.io/token/0x6CfB6dF56BbdB00226AeFfCdb2CD1FE8Da1ABdA7
Uniswap LP: https://info.uniswap.org/pair/0x577349ecd462a369ab71908a260ae1e2d8982b74
Disclosure of Risks and Uncertainties
Komet, Nova, and the overarching FSC is a novel, experimental concept within a quickly emerging space. While we wholeheartedly put user security in the core of our values, numerous systemic risks exist outside of our control that may supersede our ability to protect our users.
These include, and are not limited to, security and reliability of the Ethereum 2.0 network, integrity of future Uniswap iterations, regulatory uncertainties concerning the DeFi space as a whole and Komet in particular, as well as exploits in DeFi areas that are unrelated to FSC specific strategies, but which carry second and third-order effects that ultimately affect the FSC. We firmly pledge to anticipate and mitigate these risks to the greatest extent possible.
