Penguin Nests: Fee collection, dApp exclusivity & IL protection
The Penguin Compounder will be live on PeFi in a few days, and with it comes added utility to our stakers/HODLers. This guide aims to provide information to further explain what the nests are, how they work, and why you should be invested in them if you’re an early investor in the Penguin Finance ecosystem.
What are the Penguin Nests?
The Penguin Nests are the main staking mechanism on the Penguin Finance ecosystem. Overtime, you’ll earn PEFI by HODLing xPEFI tokens, and also gain access to exclusive dApps inside of the ecosystem. xPEFI is an ERC20 token that is always exchangeable for PEFI. When you stake your PEFI into the nest, you effectively exchange your PEFI for xPEFI.
How does it work?
Once you bought xPEFI with PEFI, the value of your tokens will appreciate against PEFI with time. This is because a percentage of all rewards (currently 4%) minted by our contract is sent to the nest every day. In addition, part of the fees collected throughout the entire ecosystem get sent to the nest!
Impermanent Loss Protection
The ratio of xPEFI to PEFI only increases with time. Each time PEFI is sent to the Penguin Nest for distribution, it increases this exchange rate. There is no mechanism to ever decrease the exchange rate. When you leave the Penguin Nest, you benefit from the accumulated difference in exchange rate between both tokens, and therefore earn PEFI! This mechanism prevents your xPEFI from ever losing value, yet you still get APYs of over 400%+ against our native token, PEFI.
Fee Collection
In addition to rewards being minted as 4% of Igloo rewards, most of our dApps collect fees from the ecosystem. Here is a list of how much is collected in fees.
Penguin Emperor: 1% of all transactions goes to the Nest
Penguin Compounder: 2% of all rewards get sent to the Nest
dApp Exclusivity
Our Nest-exclusive dApps require users to use xPEFI for our platform, effectively making it a valuable token to hold as an investor. Not only are you collecting fees from these applications just by being an xPEFI holder, you’re getting access to the entirety of our ecosystem.
Some of the applications that require xPEFI include:
Penguin Emperor. The bidding system of this entertaining king of the hill dApp requires xPEFI.
Penguin Launchpad. Every tier of our upcoming IDO platform requires you to hold a certain amount of xPEFI, not regular PEFI, in order to participate in token sales.
Club Penguin. Our upcoming initiative to earn new tokens and help projects gain recognition in Avalanche requires Penguins to stake xPEFI.
Vision
Our Penguin Compounder will introduce many of our Igloo farmers to an exclusive set of applications and financial tools to earn PEFI without the risk of impermanent loss. With 50% of all rewards from the Igloos getting sent to the nests automatically for our Penguins, it’s important to highlight what makes xPEFI such a valuable asset for the Penguin Finance ecosystem. We want to be much more than just a yield farming protocol with a token that rapidly loses value, which is why we’re quickly expanding to different sections of DeFi. Penguin Finance is a long-term project and we’ll continue to build innovative applications to help protect token value.
About Penguin Finance
Penguin Finance is a platform powered by Avalanche building an innovative set of decentralized applications, financial products, and documentation for both technologically savvy individuals and those with absolutely no knowledge of cryptocurrency.
We’re bridging the gap between DeFi and mass adoption by offering ultra-low fees, an intuitive UX design, and the best documentation/tutorials. PeFi is made for penguins, by penguins.
