Token Mechanics

This page details how NOVA tokens are minted, burned, and how the protocol manages supply over time. For basic token information, see NOVA Token Details.

Issuance: Governance-Gated Only

NOVA issuance is strictly controlled by on-chain governance. There is no admin key, no multisig override, and no automated emission schedule. Every new token must pass through the following four stages:

Stage 1: Proposal

A governance proposal is submitted specifying the mint amount, the recipient address, and the rationale. The proposer must hold at least 1% of circulating NOVA to submit a mint proposal. A proposal bond is required and is returned only if the proposal passes.

Stage 2: Futarchy Market

A conditional prediction market is automatically created for the proposal. Pass tokens represent approval; fail tokens represent rejection. The market runs for 5 days, allowing traders to express informed views on whether the mint benefits the protocol.

Stage 3: Governance Vote

Staked NOVA holders cast their votes over a 7-day period. Mint proposals require a supermajority of 66% approval and a minimum quorum of 15% of staked supply. The futarchy market outcome is advisory but publicly visible.

Stage 4: Timelock and Execution

Approved proposals enter a 48-hour timelock before execution. During this window, the community can review the outcome and raise concerns. After the timelock expires, anyone can trigger the on-chain execution.

Warning: There is no emergency mint function. Even in urgent situations, the full governance process must be followed. This is a deliberate design choice to prevent supply manipulation.

Inflation Structure

NOVA has no scheduled emission curve, no block rewards, and no automatic inflation. The supply changes only through governance-approved mints and protocol-defined burns.

No Scheduled Emissions

Unlike many protocols with predetermined inflation schedules, NOVA does not emit new tokens on a fixed timeline. Every mint is a deliberate governance decision with a stated purpose.

No Hard Cap

There is no maximum supply limit. This provides the protocol with flexibility to fund growth, but the governance gate ensures that dilution is always community-approved.

Note: While there is no hard cap, the 66% supermajority requirement for mints makes it extremely difficult to pass dilutive proposals without broad community support.

Burn Mechanisms

NOVA is burned (permanently removed from circulation) through multiple mechanisms:

Bid Wall Burns

When token holders redeem NOVA through the Bid Wall, the redeemed tokens are permanently burned. This reduces circulating supply and increases the NAV per token for remaining holders.

Governance Burns

The DAO can vote to burn tokens from the treasury. This is typically used when the treasury holds excess reserves and the community decides that reducing supply is more beneficial than deploying capital.

Fee Burns

A configurable percentage of protocol fees can be directed to burns rather than treasury accumulation. This parameter is set by governance and can be adjusted via proposal.

Net Supply Change = Governance Mints - Bid Wall Burns - Governance Burns - Fee Burns

Onchain Fund Flow

All fund movements within the NovaDAO protocol are executed on-chain via Soroban smart contracts. Here is how funds flow through the system:

ICO proceeds: Collected by the sale contract and distributed to the Bid Wall, project treasury, performance escrow, and protocol fee pool.
Trading fees: Collected by the AMM contract and split between the protocol treasury and NOVA stakers.
Redemption fees: The 1% Bid Wall redemption fee is retained in the Bid Wall reserves, increasing NAV for remaining holders.
Listing fees: Paid by projects when they apply for listing. Directed to the protocol treasury.
Staking rewards: Distributed from the fee pool to staked NOVA holders proportionally.

Verification and Tracking

Every token operation is fully transparent and verifiable:

Soroban contract events: All mints, burns, transfers, and fee collections emit contract events that are indexed by Stellar explorers.
NovaDAO dashboard: The protocol dashboard displays real-time supply metrics, burn totals, and mint history.
Third-party indexers: DeFiLlama, StellarExpert, and other third-party services track NOVA supply independently.
Contract source code: All smart contracts are open source and the deployed bytecode can be verified against the published source.

Minting Gate Summary

Gate	Requirement
Proposer Threshold	Must hold at least 1% of circulating NOVA
Proposal Bond	Refundable bond required; forfeited if proposal fails
Futarchy Market	5-day prediction market must complete
Vote Quorum	Minimum 15% of staked NOVA must vote
Supermajority	66% approval required
Timelock	48-hour delay between approval and execution
Emergency Override	None — no bypass mechanism exists

Tip: You can track all active and historical mint proposals on the NovaDAO governance dashboard. Each proposal includes the full context, voting results, and execution status.

Next: Protocol Analytics for real-time metrics and data sources.