The Treasury is essential to maintaining decentralized governance. It enables the Nuon platform to be self-sustainable and pay for maintenance of the protocol, subsidize rewards and protocol incentives and refinance the Collateral Hub if ever required.
The Treasury collects protocol transaction fees when collateral is deposited/withdrawn, and when Nuon is minted/burned. Transaction fees will also be associated with future features released on the Nuon Protocol, including for collateral yield, cross-position collateralization, leveraged positions and Nuon swaps.
Initially, in order to provide instant liquidity as a third line of defense to keep the target peg stabilized, Treasury assets are not staked. As Nuon’s peg strengthens, assets can be put to work in DeFi, resulting in increased revenue to Nuon holders, higher NuMINT prices and a stronger Nuon peg, and the cycle continues.
The more collateral that is locked within the Collateral Hub and the more funds there are held in the Treasury, the more stable the Nuon protocol is as a whole.
The Treasury collects small fees from:
Collateral: depositing collateral and minting Nuon (Deposit Fees: 0.1%)
Nuon Activities: burning, minting, transactions and interest income
Market Making and arbitrage fees
Fee levels are subject to change based on risk assessments by the team, advisors and the community.
Treasury revenue will be allocated to protocol development, incentives, a reserve fund, ecosystem growth and holders of the nuMINT tokens. Certain uses of Treasury funds require a minimum number of Boardroom votes to be activated, in order to protect the Treasury from malicious players.
The Development Fund is easy to access and is available to the development team to facilitate maintenance and quick implementation of new features and patches.
Currently, it is used to finance the core team that created Nuon. The community can submit proposals to vote on including other developers and third-party contractors or change the development team in the future.
Protocol incentives, subject to the governance, are additional funds used as protocol rewards and yield boosters. They incentivize users to provide liquidity and collateral to the ecosystem. The Treasury may subsidize yield and rewards for the initial deposits. Incentives might be applied until collateralization levels required for the system stability have been reached.
This fund is reserved for emergencies, including technical or legal challenges that could threaten the Nuon ecosystem. It requires a special Boardroom protocol so that the reserves are not abused and can serve in unique situations.
Once the Treasury has grown large enough, it can be used to sponsor grants, hackathons, and platform ambassadors to promote Nuon and nuMINT and build out the surrounding ecosystem.
To prevent abuse of power by nuMINT holders, the Boardroom implements special proposal structures and vetting before distributing funds to third-party projects.