ANA

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Summary

ANA is a store of wealth designed to provide stability and security to its holders through a collateral-backed reserve system and rising floor price. The token has no limit to the upside, but at all times has a limit to its downside guaranteed by its minimum (floor) price. The rising floor that supports ANA’s price makes it an asset that truly stores durable value.

The rising floor price represents permanently locked liquidity for all ANA in supply. The guaranteed price creates a unique asset class that can appreciate indefinitely, but cannot crash. The maximum potential loss is always capped in a predictable manner.

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Rising floor price

Every ANA token in existence has a built-in floor price guaranteed by the Nirvana protocol reserves. The reserves are able to guarantee this price because all new ANA tokens are purchased directly through the Nirvana market-driven mint, and this purchase deposits liquidity into the protocol-owned reserves. There are no ANA tokens created without liquidity being added to the protocol-owned market reserves.

As demand for the ANA token pushes its price higher, the reserves fill up with more capital. After a critical threshold of liquidity is exceeded, the floor price for all ANA tokens automatically rises. The increase in the floor price is a “ratcheting” action: it never goes back down. Once the floor reaches a new height, that price point is locked in for all time. The floor can only go up from there, which it will do the next time the triggering conditions are met.

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Supply

ANA has no fixed supply and no “fully diluted valuation”. Demand for the token translates into purchases from the Nirvana market which simultaneously increase the supply of ANA and its price. When ANA is sold back to the market, the liquidity from the reserves is removed as payment for the token, and the ANA itself is burned (removed from supply). Burning ANA when sold and minting ANA when purchased ensures that the protocol-owned reserves have sufficient capital to guarantee the floor price for all tokens.

In this respect, ANA can be viewed as an algorithmically generated commodity. Its supply and value are market-driven, while its minimum (floor) value is guaranteed by the automated protocol itself.

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Collateral and borrowing

Since ANA has a built-in guaranteed price, it can be used as a collateral for risk-free lending. If the amount of debt is less than the “floor value” of ANA, this debt will not be under-collateralized no matter the price movements of ANA (since ANA cannot fall beneath its floor price).

Nirvana includes a native lending/leverage module where NIRV can be borrowed on the basis of collateralized ANA. The token NIRV is a synthetic stablecoin, hard-pegged to the value of the base asset for ANA (e.g., USDC). The maximum amount of NIRV that can be borrowed by a user is equal to the floor value of their deposited ANA. Since the value of the NIRV debt will not exceed the floor value of the ANA collateral (i.e. the loan-to-value ratio will not exceed 1.0), the ANA collateral is at no risk of being liquidated. Nirvana does not charge an ongoing interest fee on lending – the only fee is a one-time flat origination fee, which is distributed as revenue through the revenue-sharing module.

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Depositing & governance rewards: prANA

Long-term ANA holding is incentivized through governance token emissions. Nirvana’s governance token prANA is emitted at a flat rate on ANA deposited. The amount of prANA received is proportional to the amount of ANA held and the duration it was held for.

Governance token emissions are continuous, and may be claimed at any time. Depositing or withdrawing ANA does not change the amount of earned prANA rewards, but only deposited ANA is actively earning prANA.

In order to dis-incentivize the withdrawal of deposited ANA, there is a flat fee for withdrawing ANA from escrow. This fee is subject to governance, and is paid as revenue through the revenue-sharing module.