Insured Finance’s Deflationary Dynamics
🔥 Every insurance request will perpetually burn tokens and reduce the available supply
After the launch of our highly anticipated two-sided insurance marketplace, the INFI token will become increasingly scarce due to the deflationary dynamics of the token economics. Every insurance request on the marketplace will perpetually decrease the supply of INFI tokens through an irreversible burning process, reducing the available tokens for users.
Insured Finance users who make insurance requests will pay 1% of the total request amount. This 1% will serve to both incentivize Insured Finance development and will play into the burning mechanism. Half of the 1% will be allocated towards a development fund, compensating ongoing development in Insured Finance, ensuring that the marketplace stays on the frontier of innovation in the digital asset insurance space.
The remainder will be perpetually burned, decreasing the circulating supply of INFI tokens. The 1% insurance request fee can only be paid in INFI tokens, creating a consistent demand-side pressure for the native tokens of the platform. On the other hand, the burning mechanism will reduce the supply, improving dynamics on both the demand-side and the supply-side.
Insured Finance is launching an extremely disruptive marketplace. All INFI token holders will benefit from the freedom to easily participate in this marketplace through the issuance of insurance requests or the provision of coverage for the current requests in the marketplace. However, INFI token holders will also broadly benefit from the deflationary dynamics of the token supply. Every insurance request made will benefit all INFI token holders by increasing their relative proportion of the overall supply.