NFT-Based Fee System

The Nacho Partnership

Zealous Swap has established a strategic partnership with Nacho to integrate their popular NACHO KAT NFTs collection (10,000 unique NFTs) as the cornerstone of our innovative fee system. This collaboration brings together Nacho's established NFT community and Zealous Swap's DeFi infrastructure, creating mutual benefits for both ecosystems.

Dual-Fee Structure

Zealous Swap uses a Modular Fee System, meaning swap fees can vary by pool.

Users who stake their NACHO KAT NFTs and reach 100,000+ Power Points get a 33% discount on all swap fees.

Example (default pool):

• Standard users: 0.3% fee

• Qualified NFT stakers: 0.2% fee

Technical Implementation

Our implementation maintains the mathematical integrity of liquidity pools while providing preferential fees to NFT holders:

• All trades interact with the same unified liquidity pool

• Fee differentiation occurs at transaction execution, not pool calculation

• The constant product formula (x * y = k) remains unchanged

Encouraging Whale Activity & Arbitrage

The fee discount creates powerful incentives for larger traders and arbitrageurs:

• Whale-Friendly Economics: Large traders (whales) benefit significantly from the 33% fee reduction, incentivizing them to bring substantial liquidity and trading volume to the platform

• Enhanced Arbitrage Opportunities: When price discrepancies between markets fall within the 0.1% fee differential, NFT holders gain exclusive arbitrage opportunities that non-holders cannot profitably execute

• Market Efficiency: These privileged arbitrage opportunities lead to tighter spreads, more efficient price discovery, and reduced price dislocations across the Kaspa ecosystem

• Natural Price Floor: The ongoing economic benefits create a natural price floor for NACHO KAT NFTs, as their utility directly translates to quantifiable trading advantages

Additional NFT Benefits

Beyond trading fee discounts, NACHO KAT holders will enjoy:

• Future governance participation

• Potential token airdrop eligibility

• Whitelist access to future Zealous ecosystem products