Recently, the DeFi space has been on fire, with new projects and protocols launching left and right. This influx of activity has led to a lot of innovation and creativity, with projects trying to one-up each other regarding features and functionality. One such example is Uniglo (GLO), a new project looking to shake up the DeFi space with its unique deflationary model.
The deflationary model creates a virtuous cycle where the more people use the platform, the more valuable the tokens become.
Deflationary tokens are here to outpace DeFi, according to some crypto enthusiasts. Let’s learn more about Uniglo (GLO)’s deflationary mechanic and how it could push PancakeSwap (CAKE) and Curve (CRV) to adapt.
How does The Uniglo’s Deflationary Mechanic work?
Some of you might mistakenly think that cryptocurrency and the idea of deflation in conventional finance are the same things. But in fact, Deflation is excellent for cryptocurrencies but awful for traditional finance. Deflation, as used in conventional finance, describes a decline in asset value brought on by circumstances like excessive minting.
Speaking of DeFi finance, it works differently. With time, the market supply of deflationary cryptocurrency falls. This aspect suggests that users or the project team will engage in actions that decrease the coin’s quantity on the blockchain. Burning tokens is a systematic strategy for achieving this goal.
Buyback and burn and transaction burning are the two types of burning methods used by Uniglo (GLO). The buyback mechanism entails the platform purchasing tokens from owners and locking them in an unreachable address, which is self-explanatory.
Furthermore, Uniglo uses a smart contract that automatically burns a portion of transaction fees when it comes to burning on transactions. The effectiveness of this process is strongly influenced by the volume of transactions that occur on a platform; the more transactions, the more tokens the platform burns, and vice versa.
PancakeSwap (CAKE) And Curve (CRV) Overview
Now, let’s say a few words about PancakeSwap and Curve – two other deflationary mechanisms that the Uniglo protocol can influence.
PancakeSwap (CAKE)
The most active decentralized exchange on Binance Smart Chain, PancakeSwap, has the largest trading volumes in the industry. Deflationary tokenomics have been incorporated into PancakeSwap’s protocol during the past few months.
PancakeSwap uses different manual $CAKE burning mechanisms, which apply to portions from lottery ticket purchases, every NFT sale, etc. The significant efforts made by PancakeSwap to satisfy the needs of its community have not stopped.
Curve (CRV)
While Uniswap and Balancer’s AMM platforms and Curve’s have many commonalities, Curve distinguishes itself by only allowing liquidity pools made up of similarly behaving assets like stablecoins or wrapped versions of related assets like wBTC and tBTC.
With the lowest fees, slippage, and temporary loss of any decentralized exchange (DEX) on Ethereum, Curve is able to employ more effective algorithms.
Because of the surge in interest in locking up CRV governance tokens, the asset is on the verge of becoming net deflationary.
Overall, both CAKE and CRV aim to be deflationary tokens, which is proven by their successful tokenomics. Meanwhile, Uniglo’s straightforward approach is more likely to attract attention and raise adoption from inexperienced investors.
Wrapping Up
The DeFi space is still in its early stages and is constantly evolving. It will be interesting to see how Uniglo’s deflationary model affects the landscape in the months and years. Uniglo has entered the presale phase from the 15th of July and is gradually gaining awareness on the market.
Find Out More Here:
Join Presale: https://presale.uniglo.io/register
Website: https://uniglo.io
Telegram: https://t.me/GloFoundation
Discord: https://discord.gg/a38KRnjQvW
Twitter: https://twitter.com/GloFoundation1
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