Introduction

Tunnel is an advanced protocol that amalgamates the distinctive mechanisms of various lucrative DeFi projects of recent times. These include:

1. Automatic Liquidity Generation
2. Effortless Yield Generation
3. Automated Buyback-and-Burn

These mechanisms collaborate to automatically generate liquidity, increase transactional volume and produce yield. Combined, they also offer the TNI token a use case in the physical world as a “liquidity connector” for developing DeFi projects.

Fundamental features

Continuous liquidity generation

Tunnel’s mechanism of Proof of Liquidity (PoL) automatically utilizes 3% of each transaction which involves TNI to automatically generate liquidity in its original TNI-ETH pool or any other allowed pool that is matched with TNI. This, in turn, guarantees an exceptionally escalating liquidity pool that’s appealing to investors, arbitrageurs, and traders.

The Proof of Liquidity mechanism in the Tunnel ecosystem:

• 3% of eachTNI transaction is stored within the contract (note that this can be altered up to 5%).
• When the TNI stored within attains the X number of tokens (note that this threshold can also be adjusted), a fraction of the TNI stored will be sold at market prices and the tokens of UNIV2 liquidity will be produced and sealed within the contract.
• A small part of the TNI will also be sent to the transaction’s initiator as the function of “Auto Liquidity Add” absorbs gas in a huge volume.

Even though this feature of automatically producing liquidity is not unusual, the modernisation by Tunnel enables auto-generation of liquidity on ANY Uniswap token that is paired with TNI (not limited to TNI-ETH).

This is a huge refinement that makes it interesting for various other projects to collaborate withTunnel . This particular mechanism of proof of liquidity will buy the project tokens of the partner at the market rate when it gets to create liquidity on the pair.

In due course, numerous pairings of partners will form a multi-token liquidity web. This will establish opportunities for commercial trading and arbitrage which will then aid to produce yields for all TNI holders.

Continuous Rewards

Each token holder receives instant rewards on each transaction which is distributed as a result of an improvement made by Tunnel upon RFI’s mechanism of passive yield generation.

Let’s see how it works:

In the beginning, 2% of each transaction is instantly allocated to all holders by automatic means in relation to their TNI holdings.

Due to this, each holder is benefitted from transactions happening on the TNI network and aren’t required to transfer or stake tokens. This also supports a much secure, gas-efficient and passive yield production.

This is a captivating feature for especially the liquidity providers as they receive extra TNI tokens in addition to the default Uniswap fee of 0.3%. Such rewards can also be considered as a hedge against temporary losses.

The percentage of every transaction can be altered to 1–5% which is shared with the holders. On top of it, TNIalso has a unique Liquidity Treasury which creates interest from this structure and regularly transfers suchTNI rewards as additional incentives to liquidity providers.

Continuous price inflation

The first two features perform at their greatest capacity when a large transactional volume exists on the network. This can be naturally gained and sustained via various partner pools.

However, there’s another factor to increase transaction volume. With TNI Alchemize function, 2% of its original liquidity pool can be converted into ETH. This is later used to buy and burn TNI at market rate.

Influenced by ITS, this structure assists to form persistent buy pressure and price inflation for Tunnel (while the supply keeps depreciating).

The following happens when the Alchemize function is applied:

• The liquidity of 2% is taken out from the TNI-ETH pool and divided into TNI and ETH
• ETH is used to buy TNI at market price
• 95% of TNI gets burned
• 5% of TNI is shared with the caller of the function (in order to incentivize caller for consuming gas)

Once every 30 Minutes, this function may be applied by holders (with a minimum of 1000 TNI tokens). This Alchemize function can be accessed via Etherscan until the Tunnel’s main dashboard is live.

Tunnel’s function as a Liquidity Connector

The validation of the above core features is done by taking into consideration the recently profitable DeFi projects. However, the protocol’s actual value is driven by having a use case in the physical world in the whole DeFi ecosystem.

Tunnel has the advantage of generating liquidity and passive staking as it has partnered with various DeFi projects. Most of them are in initial stages and require additional liquidity, as well as trading volume.

The main Tunnel protocol can simply divert its automatic liquidity production operation to other target pools by partners (TNI-PARTNER).

This obviously results in cross-community promotions and TNI receives more acknowledgement. Additionally, synergistic partnerships permit for an increase in transaction volume on theTunnel network (which cultivates yields for all liquidity providers and other holders).

Learn more about a regular partnership:

• Suppose, Project X is seeking more liquidity providers and buyers for their token (for instance, XTOKEN)
• They buy TNI at market price and form a Uniswap TNI-XTOKEN pool
• Let’s assume that this partner pool meets the standards, then on theTNI network, 3% of all transactions will be sent towards producing liquidity for TNI-XTOKEN pool (using Tunnel’s Proof of Liquidity mechanism)
• Furthermore, extra rewards will be received by all TNI-XTOKEN liquidity providers, which are produced by but TNI’s passive mechanism of yield generation and the Liquidity Treasury (explained below)
• When the liquidity generation term with the partner ends,TNI can move on to partner with a brand new project or even make the switch to its own ETH pool

Another aspect to be considered is that partnerships generate further buy pressure for the TNI token as partners purchase TNI at market price with ETH. This allows them to access Tunnel’s liquidity building features, as well as treasury rewards. In addition to this, they also receive exposure to Tunnel’s community of traders and DeFi investors.

Liquidity Treasury

Funded with 500,000 TNI at commencement, this principal amount set can never be removed or transferred from the time of deployment.

Tunnel’s passive staking mechanism produces some interest which is then automatically transferred to liquidity pools (to incentivise liquidity providers).

The Launch

Tunnel is set to launch straight at Uniswap.

Even though the development team of experts at Tunnel is experienced in the primary protocols that TNI is inspired by, the team recognises the overall skepticism that the participants of the DeFi ecosystem have. Especially, when it is about investing in modern and creative projects from various anonymous teams.

For the same reason, rather than increasing a presale, the team took a decision to bootstrap 10 ETH of early liquidity themselves and list straight at Uniswap.

Besides, our team seals 100% of the initial liquidity:

• Out of that, 75% is sealed for 6 months
• The rest 25% is sealed for two weeks

The approach is to pull out only the starting liquidity float of 2.5 ETH after two weeks, and re-seal the remaining. And, to re-invest that 2.5 ETH towards marketing, new partnerships and mainly development.

This launch project doesn’t have VC support. Our team’s goal is to create a 100% decentralized protocol for liquidity connection which helps the broadening and maturation of the DeFi ecosystem. We are working towards engaging members who are like-minded and can really make a difference as the project flourishes with time.

Tokenomics

• Overall initial supply: 10,000,000 TNI
• Liquidity Treasury: 5 % (Please note that these particular tokens are out of circulation as they aren’t allowed to be transferred or moved. The aim of this fund is to develop interest amongst the liquidity providers)
• Partnerships and growth treasury: 5 %
• Marketing budget: 7.5%
• Team: 2.5%
• Initial liquidity: 8,000,000 TNI/ 10 ETH