# Token Utility #### 1.1 Governance **Quadratic Voting** This system ensures that each token holder's influence is proportional to the square root of their token holdings. It prevents large holders from dominating votes and promotes a more democratic governance process. **Delegated Governance** Token holders can delegate their voting power to trusted representatives or expert committees. This enhances decision-making efficiency and leverages specialized knowledge. *** #### 1.2 Staking Incentives **Reward Mechanisms** Users who stake Nebula tokens earn rewards proportional to their stake and participation level. Staking promotes token holder commitment and aligns interests with the protocol's success. **Enhanced Voting Power** Staked tokens may carry additional voting weight, incentivizing long-term engagement and active participation in governance. *** #### 1.3 Fee Discounts **Borrowing Fee Reductions** Borrowers who hold and stake Nebula tokens receive discounts on borrowing fees. The discount rate scales based on the amount staked and duration, encouraging token holding and reducing borrowing costs. **Supplier Incentives** Suppliers may also receive enhanced interest rates or reduced protocol fees by staking Nebula tokens, further incentivizing participation. *** #### 1.4 Deflationary Mechanisms **Token Burns** A portion of the protocol's revenue is used to buy back Nebula tokens from the open market and burn them, permanently removing them from circulation. This reduces the total supply over time, creating scarcity and potentially increasing the token's value. **Usage-Based Burns** The amount of tokens burned is tied to protocol usage metrics, such as transaction volume and fees generated. This directly links token scarcity to platform growth. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://nebula-18.gitbook.io/nebula/token/tokenomics/token-utility.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.