prANA

The governance token for Nirvana is prANA, earned by staking ANA. The rate at which prANA rewards accrue to ANA stakers adjusted through community-driven governance.

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Continuous Emissions

ANA depositors earn prANA continuously at a variable rate set by governance. Key features of this emission model include:

• Earned prANA can be claimed at any time even after ANA is unstaked.
• Fair Distribution: Governance power is allocated based on the amount of ANA held and the duration of the deposit.

ANA has no minimum stake and no withdraw delay. There is no fixed supply of prANA. It is distributed based solely on the amount and duration of ANA deposits, ensuring prANA remains equitably distributed. This emissions system incentivizes investors to hold ANA for longer periods to accumulate more prANA.

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Depositing prANA

Each market has dedicated valut where users can depoit their prANA. When prANA is deposited, it activates two key features:

• Revenue Sharing: prANA holders receive a share of the corresponding market’s revenue.
• Voting Power: prANA depositors are granted voting power to adjust the corresponding market’s parameters through the decentralized governance system.

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Revenue Sharing

Each prANA token represents a share of protocol revenue, which is distributed pro-rata to prANA depositors. The benefits include:

• Incentivizes Long-Term Holding: Since prANA can only be earned by holding ANA over time, it remains scarce. Sharing continuous revenue makes holding prANA valuable.
• Aligns Voting with Protocol Health:
  • Fee Control: Governance, powered by prANA votes, regulates Nirvana’s parameters.
  • Balanced Incentives: prANA holders benefit from fee revenue, encouraging them to set fees that promote both protocol usage and profitability.

Revenue distribution is paid out in NIRV and ANA for the ANA market, and in the underlying reserve asset for datToken markets.

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Realizing prANA

While the primary purpose of prANA tokens is governance, they also serve as perpetual options for ANA. When used as an option, prANA has the following properties:

• Perpetual: prANA tokens never expire and can be used at any time.
• Dynamic Strike Price: The cost to exercise a prANA token is the current floor price of ANA.
• Always Profitable: prANA tokens are never “out of the money” because the strike price (floor price) is always equal to or below the market price of ANA.

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Option value of prANA token

The option value of a prANA token is the difference between ANA’s market price and its floor price (minus fees). With a greater difference between the market price for ANA and the floor, the option value of prANA increases. Example prANA value: If the floor price of ANA is $25 and the market price is $40, exercising a prANA token lets the user acquire ANA at $25 and sell it at $40, making a profit of $15. The redeemable value of a prANA token in this market is $15. When prANA tokens are realized for ANA, the amount of assets transferred to the Nirvana reserves is equal to the floor value of ANA. This design preserves solvency so that the Nirvana reserves have sufficient capital to back every ANA token at its floor price.

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Calculating prANA returns

The projected returns for prANA yield are based on the value of prANA and the rate of emission. The formula is: prANA yield = prANA value × emission rate ÷ ANA value For an example, let:

• The floor price of ANA be $10
• The market price of ANA be $25
• The emission rate for prANA be 120% per year

The the value of the prANA token is $15, and for each ANA held for a year, there will be 1.2 prANA earned. The prANA yield is then 72% per year: $$prANA yield=\$15×1.2÷\$25=72$$