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1/ $XTK / http://xtoken.market
xToken offers a compelling solution to some of defi’s most pressing UX pain-points. They recently popped up on my radar as possible solution for UNI V3 LP fungibility, but more on that later.
First the basics:
xToken offers a compelling solution to some of defi’s most pressing UX pain-points. They recently popped up on my radar as possible solution for UNI V3 LP fungibility, but more on that later.
First the basics:
2/ Originated from a @synthetix_io grants DAO in 2020 the xToken protocol wraps the complex mechanics of manual staking and governance of native defi tokens into simple yield bearing “set and forget” ERC20 tokens called xAssets.
3/ By doing so, it offers a compelling use case: Instead of having to deal with each protocols specific duties and limitations like minting, voting and vesting etc., xAssets mitigate these issues while auto-compounding yield, free of the need to claim.
4/ This simplification has tremendous benefits for the UX, but there is more: automatic compounding increases APY efficiency and by bypassing manual claiming it significantly reduces gas costs and taxable events.
5/ Most importantly, while native Defi tokens often have to be locked in order to generate yield, xAssets are freely tradable and can be used as collateral, for farming plays and leverage, opening up all kinds of double compounding yield strategies.
6/ They currently offer four products: xSNX, xAAVE, xKNC, xINCH. Most have two variations with a different set of rules for governance: while xKNCa votes to increase staking fees in order to maximise yield, xKNCb votes to increase reserve rebates to attract more liquidity.
7/ Now here comes the punchline: Two weeks ago, xToken announced xU3LP, a product specifically catered to mitigate LP headaches that will come with the launch of @Uniswap V3. https://medium.com/xtoken/announcing-xu3lp-fungible-convenient-liquidity-provision-for-uniswap-v3-1bbd49ec855c
8/ In particular the deployment of custom liquidity ranges will force LP’s to manage their positions more actively. This will price out smaller LP’s since active management will increase gas costs dramatically.
9/ Additionally LP positions in V3 will be represented by non-fungible tokens. This means that other protocols can’t generically use @Uniswap LP tokens as e.g. collateral. The announcement for V3 already mentioned solutions for fungibility might be offered by third parties.
10/ $xU3LP solves both pain points by automatically optimising the liquidity range on behalf LP’s and wrapping it in a fungible token, which can be further used as collateral for yield farming or leverage.
11/ Other projects will offer similar solutions, but there is reason to believe that xTokens has a head start. The man @haydenzadams himself took notice: https://twitter.com/haydenzadams/status/1377358706304675842?s=21
12/ xTokens native token $XTK launched in February. 2% were distributed retroactively to users of xAssets via airdrop. Team and early backers hold 32.9% of the supply, 50% are held back for community vesting programs and 17.1% for growth and ecosystem.
13/ All pools are currently incentivised with farming rewards ranging from 196% to 321% APR. Rewards are vested for 6 weeks, after which circulating supply will climb from about 22m to 100m. https://medium.com/xtoken/guide-to-xtk-community-vesting-802a285539df
14/ We know that $XTK will accrue value from minting fees, but exact token economics are not clear at this point. The team announced publishing a paper detailing the use case of $XTK soon. So watch this space!
15/ $XTK is currently sitting at 0.64$ and 14m Mcap, but as mentioned farming rewards will soon increase circulating supply substantially. TVL has just crossed 50m.
Considering its possible use case within the launch of Uniswap V3, this could see significant upside.
Considering its possible use case within the launch of Uniswap V3, this could see significant upside.
15/ Links and further readings:
Website: https://xtoken.market/
Discord: https://discord.com/invite/K9kSYJa
Medium: http://medium.com/xtoken
Article on bankless: https://newsletter.banklesshq.com/p/how-to-automate-your-staking-rewards
Website: https://xtoken.market/
Discord: https://discord.com/invite/K9kSYJa
Medium: http://medium.com/xtoken
Article on bankless: https://newsletter.banklesshq.com/p/how-to-automate-your-staking-rewards
