Similar to how Bonds work in DeFi, Twisted Nodes are a familiar but optimised mechanic to that.
Here’s simply the process of how Twisted Nodes work in steps:
Step 1: You choose your reward token.
Step 2: You decide which node you want, short, medium, or long term. Short-term nodes cost 2 $SMELT and their ROI period is 124 days, medium-term nodes cost 1 $SMELT and their ROI period is 186 days, long-term nodes cost 0.5 $SMELT and their ROI period is 248 days. Make sure that the node you want to purchase is available as there are limited amounts of them available at any period and they can be sold out.
Step 3: You purchase the node, and over the Lifespan of the bond, you get both your initial deposit and the Risk-Free Value back.
“The ROI Period” shows how many days you are going to get your deposit back, the node will pay you your deposit over that time. In the second example image above, the node is a short-span node, which means that the ROI period is 124 days. Over those 124 days, this short-term node will slowly start paying small amounts of $SMELT until you have your initial 2 $SMELT back on the 124th day. After that, the node is also going to pay you your initial deposit’s dollar value in whichever reward token you choose over the next 8 months.
“The Lifespan” for all the nodes is 365 days, the Lifespan indicates how long it will take for you to get your Risk Free Value back after the ROI Period is over and you have your initially deposited $SMELT amount back.
“The Risk-Free Value” is the value of the $SMELT you need to deposit during your initial purchase, you are guaranteed to get this back in dollar value over the Lifespan of the node.
“The Price” is the cost of the node, the shorter-term nodes cost more because the depositor has the make less risky bets on the price movement of $SMELT before buying them.
The “Reward Token” is the token you choose to receive your Risk-Free Value in.
The Mechanics & The Benefits
Twisted Nodes are operated with oracle support to make sure that the investors get their initially deposited value back after the ROI period is over. Because of overall Crypto and Defi token volatility, the overall value paid to the investor will be recalculated every time rewards are claimed to make sure that the investor receives their Risk Free Value back no matter what. This is all done to assure that the nodes can be purchased risk-free.
Twisted Nodes provide a way for investors to safely invest in $SMELT and receive 100% in APR. The way the tokenomics for these nodes work make it so that anyone who believes in the $SMELT token’s value will want to participate in these nodes, and the nodes will provide better results for $SMELT speculators as they involve locking up the token.
These nodes also serve as a safe way to invest in $SMELT price and adds another utility to the token. Investors who don’t want to take on token price volatility or impermanent loss risks, but still want to invest in $SMELT can choose to invest with this way.
Twisted Nodes is modular and can work with partner tokens & is a great example of Based Labs consistent focus on rewards.