As the core governance token of bitSmiley, SMILE is not only a financial asset, but also gives users multiple rights and interests. From decentralized governance to surplus auctions, fee discounts, etc., SMILE tokens provide users with a multi-level experience that greatly enhances user interaction with the platform.
1. The necessity of decentralized governance
The rapid development of DeFi applications in the Bitcoin ecosystem makes decentralized governance particularly important. As the core governance tool of bitSmiley, the SMILE token gives users direct control over the platform protocol parameters, including core parameters such as the mortgage rate of the stablecoin and the liquidation mechanism. SMILE holders can decide various strategies and mechanisms of the bitSmiley platform through voting. The decentralized governance mechanism ensures the transparency and fairness of bitSmiley and ensures the long-term stable development of the platform.
In addition, in the event of an emergency, such as a hacker attack or extreme market fluctuations, SMILE holders can protect the security of user assets through the emergency shutdown function. This kind of governance rights not only improves users' sense of participation, but also further enhances the security and trustlessness of the bitSmiley platform.
2. Surplus auctions and fee discounts
bitSmiley’s surplus auction mechanism is designed to reasonably allocate the platform’s surplus funds. When bitSmiley's system surplus reaches a certain threshold, the platform will conduct a surplus auction at a price lower than the market to attract users to participate. Users participating in the auction must hold a certain number of SMILE tokens, which not only gives SMILE tokens new usage scenarios, but also brings additional benefits to users.
Additionally, SMILE tokens provide discounts on platform fees. When users use bitSmiley's services, they can obtain fee discounts by holding a certain amount of SMILE. For example, SMILE holders will receive a discount on the stability fee paid when borrowing bitUSD. This mechanism greatly enhances the practicality of SMILE and provides users with a lower-cost service experience.
3. Liquidation preference: unique holder benefits
In addition to governance rights and fee discounts, bitSmiley also introduces a liquidation priority mechanism. SMILE holders who exceed a certain threshold will be included in the liquidator whitelist and have priority to liquidate bad debts. In situations of high market volatility, liquidating bad debts can often bring huge profits, so this privilege provides additional profit opportunities for SMILE holders.
Conclusion
SMILE is not only bitSmiley's governance tool, but also a token that gives users multiple rights and interests. Through decentralized governance, surplus auctions, fee discounts and liquidation priority, SMILE tokens bring more choices and participation opportunities to users. With the further development of bitSmiley, SMILE's application scenarios are expected to be further expanded, creating more value for users.