Question 1

What is the Native Utility Token (NUT)?

Accepted Answer

The Native Utility Token (NUT) was the core utility token of the Equilibrium decentralised finance (DeFi) framework on the EOS blockchain. It played a central role in facilitating various operations within the platform, including governance, fee payments, access to liquidated collateral, and revenue distribution.

Question 2

What was the Native Utility Token (NUT) used for?

Accepted Answer

- **Governance**: NUT holders had the authority to participate in the platform's governance by submitting and voting on proposals to modify system parameters. This decentralised approach allowed the community to influence key aspects of the framework's operations.

- **Internal Currency & Deflation Model**: NUT served as an internal currency for all products within the Equilibrium ecosystem, facilitating payments for commissions, discounts, and revenue distribution. To maintain a deflationary model, acquired NUT was periodically burned. Some NUT fees were allocated to a development fund instead of being burned.

- **Fee Payment**: Within the Equilibrium framework, users utilised NUT to pay various fees. Notably, an administration fee was charged when users withdrew their EOS collateral after closing EOSDT positions. The system also included EOSDT transaction fees (initially set to 0%) and transaction fee redistribution among position holders and arbitrators.

- **Access to Discounted Collateral**: In instances where user positions became undercollateralised, the system liquidated these positions, and the associated collateral was made available for purchase at a discount. NUT holders could acquire this liquidated collateral by paying with NUT tokens, incentivising active participation in maintaining system stability.

- **Profit from REX & Liquidator Mechanisms**: EOSDT smart contracts staked EOS collateral in the REX system, earning passive income. A portion of these REX profits was transferred to the liquidator smart contract, where NUT holders could buy EOS collateral at a 6% discount.

- **Block Producer Voting**: NUT holders could vote for EOS block producers through the Equilibrium EOSDT proxy on-chain voting system. BP candidates pledged daily EOS rewards, of which 70% was distributed to collateral holders and 30% to NUT holders. The number of staked block producers expanded from 10 to 30 over time.

- **EOSDT Management**: NUT holders were key stakeholders in managing EOSDT’s decentralised governance system. They could propose changes to platform parameters, such as liquidation penalties or collateralisation levels, which would be subject to community voting.

Question 3

Evolution from NUT to EQ

Accepted Answer

Originally, the platform used the Native Utility Token (NUT) as its primary asset for governance, collateralisation, and transactions. In 2020, Equilibrium migrated from EOS to Polkadot, leading to a rebranding of NUT to EQ. This transition expanded the token’s capabilities, aligning it with Polkadot’s multi-chain interoperability and enhanced financial tools.

Question 4

External Use Cases

Accepted Answer

- **Partner Program & Developer Grants**: NUT was used in the EOSDT partner program, allowing ecosystem contributors to earn 50% of the NUT admin fee. Additionally, Equilibrium launched a grant program, offering up to $100,000 in NUT for DeFi projects built on the framework.

- **Bug Bounty Program**: Developers and security researchers could earn up to $10,000 in NUT for identifying and reporting vulnerabilities within the Equilibrium framework.