Bitindi Protocol $BNI V2 Explained

Bitindi Chain
8 min readNov 1, 2023

We all love BULL. We truly do. But BULL has stagnated a bit. We need to take action and PULL the BULL that will kick the Bitindi Ecosystem into high gear. An upgrade, you might say.

PULL is ready—and with it, a whole new incentive system to supercharge PULL’s redeem value and take our total value locked (TVL) to new heights.

If approved in a Bitindi Ecosystem referendum, PULL will have SIX ways to redeem value. In our existing system, there is only one way for the PULL redeem value to increase. That’s quite an improvement!

PULL may need to be rolled out in phases and on different blockchains at different times. Not every feature or phase will be available on all blockchains. All phases, numbers, percentages, and other figures presented in this litepaper are approximations and subject to change without notice at any time.

Phase 1

BNI Token Migration

The current BNI smart contract does not have any of the new features that will be outlined in this litepaper. The implementation of a new and improved BNI v2 system begins with migrating the existing BNI token smart contract to the BNI v2 token smart contract. Even before any new features are introduced, this is Step 1.

The public redemption function of BNI will remain incorporated within the BNI v2 token contract.

BNI holders will deposit their BNI tokens into a smart contract and receive the same balance of BNI v2 tokens back. This exchange of BNI v1 tokens for BNI v2 tokens will be facilitated on our platform.

Notable considerations: This exchange transaction will require gas fees to be paid by the BNI token holder on whichever blockchain their BNI tokens are on.

Phase 2

The PULL token is introduced to the Bitindi ecosystem.

(1) A portion of fees will increase the redeeming value of PULL. 90% of the assets backing PULL on each chain will be used to earn a passive return, when possible. These returns may be via native token staking, when available. On chains where staking options are limited or better options are available, verified third-party sites may be used to earn a return.

(2) Those staking returns will be distributed into the Bitindi ecosystem, increasing the redeeming value. PULL holders will reap the rewards of auto-compounded staking just by holding PULL.

Anyone can join this system with ease. We will be opening the minting of PULL to the public. A user can send an amount of native tokens to the PULL contract and receive PULL tokens, backed by 95% of the native tokens.

(3) The other 5%, well, that’s the mint rate, which goes towards increasing the redeem value!

Native Tokens Backing PULL will Fund a Liquidity Pool

As those native tokens will be busy working, PULL will no longer be publicly redeemable.

Instead, the PULL liquidity pool on each chain will be funded by 5% of the native tokens backing PULL, with an equivalent value of PULL tokens for the other side of the pair. Therefore, that pair will consistently have liquidity equal to at least 10% of PULL’s TVL.

The liquidity provided will be maintained by the system to ensure PULL holders can liquidate PULL tokens if they so choose. This ensures a path for PULL holders to retrieve native tokens by selling their PULL on DEXs.

(4) The PULL earned from this liquidity (as LP rewards) will be burned—without redeeming—or otherwise utilized to increase the redeeming value for all PULL holders. This is in addition to the percentage of trading fees that already go to increasing PULL redemption!

Phase 3

Arbitrage Trades and Orderbook introduced

That PULL pool, though—the market value will surely move away from the redeeming value as people buy and sell PULL, right?

Well, Bitindi Protocol’s proprietary arbitrage and orderbook solutions benefit the Bitindi ecosystem! This is made possible by the arbitrage and orderbook smart contract having exclusive rights to mint and redeem PULL at the current redeem value.

Therefore, whenever the market value goes too far above or below the redemption value, arbitrage and orderbook trades will be performed to correct this discrepancy. Eventually, the precise differential that triggers a correction may be determined by DAO functionality.

(5) And the profits from those trades will go into the PULL contract. This is huge. As the market price and redeem value fluctuate, every arbitrage trade will increase the redeem value of PULL.

We are now up to 5 ways for PULL redeem value to increase: trading fees, public PULL minting, staking rewards, LP rewards, and arbitrage profits.

Phase 4

Bonded PULL—APR Supercharged!

PULL itself can be staked—also known as bonding—to earn even more rewards! This is an optional action that can be initiated by PULL holders.

Bonding PULL can entitle you to a percentage of the staking returns earned by the native tokens backing PULL (see Phase 2). Bonded PULL should earn rewards orders of magnitude higher than the rewards from simply holding PULL and, as designed, higher rewards than even staking native tokens to node operators.

(6) The PULL bonding process effectively burns a portion of PULL and, as a result, increases the backed value of all PULLs in circulation.

More information on the precise mechanics of the PULL bonding process will be released in advance of this stage rolling out. Phase 4 will not be available as a feature of PULL at launch.

“Redeem Value” → Backed Value

We have now covered all six ways that PULL can increase its redeeming value! Of course, at this point, if approved, it may be a good idea to start calling it Backed Value since it is part of this PULL. For access to the increasing number of native tokens backing each PULL token, the PULL token would have to be sold.

PULL is an algorithmic coin with a reserve of native tokens that 100% back each PULL in circulation.

But why?

First and foremost, SUSTAINABILITY. Ecosystem rewards should not need to be propped up by inflationary subsidies or subject to the whims of external market pressures. Bitindi Protocol is proud to be a leader in this regard, and PULL can make a significant contribution in this space.

Secondarily, PULL will be in demand. The benefits earned by staking PULL will likely exceed the returns from staking the underlying tokens to validators, and everything stays within the Bitindi Protocol ecosystem. That demand for PULL isn’t lost to market inefficiency; instead, it goes right back into PULL! By leveraging the sustainable economics of PULL, we get to use the funds backing each token to benefit bStake, bTrade, and beyond. No inflationary garbage.

The system is future-proofed too. How these systems feed into one another can be updated easily. We can upload a new contract, resume the public redemption function if necessary, and have the other contracts point to the new contract. This is great for any bug fixes and also allows us to optimize the system for more beneficial outcomes. In other words, this opens up tons of opportunities for the DAO in the future. Let’s say we are currently providing native tokens to Option A for staking rewards, and the DAO would rather provide the native tokens to Option B. No problem. The DAO can vote for this change. Look out for future referendums on this topic.

Liquidity Reward Calculation and Examples

The amount of claimable PULL is calculated in the following way:

Rewards = Trading Fees * LP Reward Percentage * Share of Liquidity Pool PULL Claim Amount = Rewards / PULL Redeem Rate

The PULL Redeem Rate that is used is the current redeemable value when the PULL is claimed.

A) Let’s say Gene provides 100% of the total value of a liquidity pool on Bitindi DEX V2 BSC. Since adding liquidity to the pool, the liquidity pool’s volume has totaled 2,000 BNB. Gene is ready to claim his rewards. At a trading fee of 0.3%, 6 BNB will have been spent on trading fees. Of those 6 BNB, approximately 5.1 BNB will be spent to mint PULL for LP providers, 0.6 BNB will be spent to mint PULL for Super Pairs, and 0.3 BNB will be used to increase the PULL redeem peg. Assuming a 10 BNB per 1 PULL mint rate, Gene’s claim will be for 0.51 PULLbnb.

5.1 BNB = 6 BNB * 0.85 * 100% 0.51 PULL = 5.1 BNB / 10 BNB

B) Let’s say Genette provides 100% of the total value of a liquidity pool on Bitindi DEX V2 ETH. Genette plays it safe and prefers stablecoin pairings due to the reduced risk of divergence loss, so they have added liquidity to a USDC/USDT pair. Stablecoins have a lower trading fee. Since adding liquidity to the pool, the liquidity pool’s volume has totaled 1000 ETH. Genette says it is time to cash out! At a trading fee of 0.1%, 1 ETH will have been spent on trading fees. With an effective mint rate of 85%, 0.85 ETH will be used to mint PULL for liquidity providers, 0.1 ETH will be used to mint PULL for Super Pairs, and 0.05 ETH will be used to increase the redeem value of PULL. Assuming a PULL redeem rate of 4 ETH, Genette’s claim will be for 0.2125 PULLeth.

0.85 ETH = 1 ETH * 0.85 * 100% 0.2125 PULL = 0.85 ETH / 4 ETH

C) Let’s say Genezilla provides 50% of the total value of a liquidity pool on Bitindi DEX V2 TRX. Since adding liquidity to the pool, the liquidity pool’s volume has totaled 100,000 TRX. Genezilla wants those sweet rewards. At a trading fee of 0.3%, 300 TRX will have been spent on trading fees. At a rate of 85%, 255 TRX will be used to mint PULL for liquidity providers, 30 TRX will be used to mint PULL for Super Pairs, and 15 TRX will be used to increase the redeem value of PULL. As Genezilla provides 50% of the total value of a liquidity pool, Genezilla’s share of those fees is 127.5 TRX. Assuming a PULL redeem rate of 15 TRX, Genezilla’s claim will be for 8.5 PULLtrx.

127.5 TRX = 300 TRX * 0.85 * 50% 8.5 PULL = 127.5 TRX / 15 TRX

Conclusion

The PULL “PULL THE BULL” introduces 5 new ways for PULL to increase in backed value and total value locked: public PULL minting, staking rewards, LP rewards, arbitrage profits, and Bond minting fees, with trading fees of course being the sixth method. PULL will address the stagnation of the current redeem value and increase our TVL. These six ways should be a massive jolt to PULL—making the Bitindi Protocol ecosystem as unique and competitive as any other DeFi offering on the market now, but most importantly, far more sustainable.

About Bitindi Protocol

The Bitindi Protocol creates innovative and straightforward solutions for Web3 applications. Since 2021, the Bitindi team has been bringing groundbreaking blockchain products to market, beginning as a volunteer team with a vision for a decentralized future. This legacy of forward-thinking innovation is the foundation of Unifi Protocol, now an established company at the forefront of Web3 technology.

Join us at Twitter: https://twitter.com/bitindichain

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Bitindi Chain

An innovative blockchain that aims to bring a shift in the blockchain ecosystem by introducing a next generation user-friendly development tools.