The Nirvana protocol is a twin system that produces $ANA, a volatile token with an algorithmically rising floor price, as well as $NIRV, a decentralized stable coin with a delegated peg.

Nirvana’s virtual AMM enables the minting of ANA from a diverse set of trusted stablecoin options. ANA’s price is free to appreciate, but the minimum floor price rises algorithmically as stablecoin reserves increase.

Zero liquidation-risk loans of the stable NIRV token can be taken by staking ANA. Loans have a negative interest rate by virtue of prANA reward emissions, meaning users earn yield on debt.

Yield for staking ANA and taking NIRV loans is distributed in prANA (pre-ANA), which are tokens that act as non-expiring options to mint ANA at its floor price. Any funds used to exercise prANA return to the stablecoin reserve, adding value to the protocol and stabilizing floor price.

prANA tokens can be thought of as non-expiring options with a dynamic strike price: the current floor price of ANA. Since ANA’s value can never go beneath the floor, the prANA tokens are always “in the money.”

ANA staking rewards are paid in prANA tokens are paid in freshly minted prANA tokens. This technique is to strike a balance between rewarding stakers while remaining sustainable with APYs. prANA minting is neutral to the protocol’s health, since the only way to convert prANA into ANA is by paying the floor-price’s worth of cash into the protocol reserves. In this way, the reserves maintain their backing of ANA tokens.

This reward mechanism is different from so-called “re-base currencies” which pay rewards in the native value token. Minting & emitting the main tokens dilutes the value, and in the case of reserve currencies, weakens their backing since more tokens are being created without money coming into the reserves. The prANA model allows for sustainable yields that benefit the protocol & stakers in the same gesture.