Nyan Finance runs a decentralized hedge fund on the ethereum and Polkadot networks, intending to deliver dividends to contributors. Its funds are crowd-sourced, empowering the members to take the lead in their allocation. Thus all liquidity providers who stake their LP tokens actively participate in deciding the investment opportunities which Nyan Finance should pursue.
They also set other investment parameters such as the time period the Nyan Finance invests any specific sum. Essentially, LP token holders propose and approve various investment strategies. In reality, the participants become a collective whale with significant influence on the market. Generally, Nyan Finance uses a diversified trading strategy that optimizes returns and reduces risks.
How does the fund work?
Traders participate in managed pools where $NYAN is the means of voting. All $ NYAN holders have a right to vote within different blocks of trading strategies. Usually, they vote at least four times within a day to determine a set of strategies that NYAN Finance should follow.
The ultimate focus of Nyan Finance is to invest in markets that have high returns or purchasing tokens whose values promise to rise within a short time. From time to time, the LP holders decide when to distribute dividends from the whale fund.
In making investment decisions, the NYAN Contract standard helps the voters to choose less risky opportunities. Since the NYAN protocol seamlessly integrates multiple smart contracts, it can invest in different portfolios, including direct investment, purchasing assets, yield farming assets, seed funding, marketing, and audits.
As pointed earlier on, members become eligible voters when they stake NYAN-2/ETH Liquidity tokens. Voting takes place over various blocks. The protocol arrives at the decisions when the blocks execute set parameters with the highest bids.
Procedurally, voting for bids occurs in rounds. However, before the voting process starts, the LP token stakers construct a bid and proposes it. After that, the LP stakers vote. Once a voting round ends, another one begins. By design, each voting round requires six hours.
Farming, mining, and staking
The efficient functioning of the NYAN Finance protocol also depends on farming, staking, and minting.
Minting: Minting and mining of coins are essential within the NYAN Finance ecosystem. The platform rewards token holders using coins which it mints and which users mine. Additionally, the proceeds from minting and mining increase the community whale fund.
Staking: Many users provide liquidity to the NYAN-2/ETH pool on Uniswap and stake their LP tokens. In return, the stakers get rewards in the form of CatnipV2 ($NIP-2), $NYAN-2 buybacks, and voting rights. They also get a share of the Fund Hedge profits.
Farming: When they claim the accumulated $NIP-2 rewards, users only receive 80% of it. The 20% goes to the funding contract/whale pool. As a fact, the stakers get their rewards in proportion to their staked amount.
Liquidity Generation Events (LGE)
Liquidity events enable early liquidity providers to join the NYAN pool at a discounted rate and allow the NyanV2 contract to hold the minted NyanV2. NYAN Finance will distribute the NyanV2 minted during the LGE to LP token stakers.
NYAN Finance has several tokens. The NYAN is the platform’s core token as it powers all its functionalities. When people stake NYAN on the Catnip contract, the protocol mints Catnip (CIN) tokens. The total supply of the NYAN V1 is 33,000.
Catnip (CIN) token: This token moves in and out of different markets as liquidity. However, only liquidity providers for the NIP/ETH pool get NIC as rewards.
NYAN Finance has many participants who take part in the following platforms.