We recently hosted a jam-packed AMA session with our community to answer their questions. On the panel, we had Chief Scientist, Taulant Ramabaja , Lead Dev, Lum Ramabaja as well as our Business Development Manager, Daniel.
The community was asked to submit questions via a google form prior to the session. We were inundated with responses from our devoted community.
Here is a recap of all the questions and responses; in case you missed it.
Q1. Do you still see yourself as having a first-mover advantage? What do you think about MonoX?
LUM : Depends on what kind of first-mover advantage you mean. E.g. Do we have a first-mover advantage when it comes to DEXs in general? Of course not. Do we have though a first-mover advantage when it comes to tackling slippage? Yes. To our knowledge, there is at this point no other dex that can provide zero slippage between pools. MonoX has pools instead of token pairs, and also has one-sided liquidity provisioning, but they are actually worse off than Uniswap. They have twice the slippage (one time for swapping a pool token with their bridge token, and another time for swapping that bridge token with another pool’s token). That is just Uniswap version 1 all over again. Our DEX architecture allows for zero slippage between pool swaps.
Before jumping to the other question, I just want to clarify what I meant by “zero slippage between pool swaps”. Our DEX, just like any AMM that is invariant in nature, does have slippage when exiting the system. In our case, though tokens do not require pairs, and the swap between pools are the ones with completely zero slippage. So swapping from the pool Token1 — Bridge_token to Token2 — Bridge_token has zero slippage. Exiting from Token2 — Bridge_token can have slippage. But since we have pools instead of pairs, there will be quite deep liquidity pools per token — meaning exiting the system will have significantly lower slippage than in any other dex. And every token is automatically swappable with every other token, with the same minimal slippage for exists.
Q2. So, what’s different from XFai to other DEX?
LUM : There are 3 main differences:
- We don’t have token pairs, we have only pools
- Swapping from one pool to another has zero slippage in our architecture
- Every token is automatically swappable with every other token
TAULANT: To add to that, our design encourages traders to effectively be both LPs and traders within our DEX. Furthermore, long-term holders will have as a result of an avenue to gain a bigger position in any of their tokens, this introduces the concept of time value to all tokens, rather than just the biggest ones. We think this will drastically change how DEFI, in general, will work
Q3. With those key differences, which pain points will you make better than the existing DEX?
LUM: Slippage minimization for regular users will be the main selling point for swaps.
Easier market making for projects will be the main selling point for projects/startups. Instead of requiring liquidity with several pairs to minimize slippage, projects can simply have 1 pool that is paired to our bridge token. This is big. Because to really minimize slippage in existing DEXs, a startup would need *a lot* of upfront investment
TAULANT: Adding to that 3rd party contracts such as money markets, derivative contracts, etc will be able to onboard smaller cap tokens effectively as well by integrating us. This is because our DEX allows for efficient liquidation and price discovery without the need for dangerous oracles.
Q4. Next the community would like to know, how would they get involved as a user in the testing environment?
LUM: We will write a detailed blog post/documentation once everything is ready.
Q5. How are you planning to let the world know XFai is here to break Uniswap, and to let people notice XFai is the DEX the space needs to fundamentally reach projects in a more efficient way UniSwap does?
LUM: We are planning to use two strategies:
1) Host as many projects as possible through our farming interface & add as many erc20 tokens as possible to our DEX.
2) Integrate our dex with aggregators (such as e.g. 1inch).
Since we have the best slippage, whenever a user wants to buy one of the hosted tokens on our dex through an aggregator, our dex will be chosen by the aggregator as the default choice (because of lower slippage). That extra exposure can then lead to users visiting our dex on their own.
DANIEL: To have some additional info on this site, the marketing will be focused on having more users use our dex. We basically have to steal the current users. With beyond finance helping us out, we can get more DeFi projects on board
LUM: Aggregators will be the key. We have seen completely new DEXs such as Hashflow, etc go from 0 to hundreds of millions of dollars in transactions just by being integrated with aggregators. fortunately, the aggregators are also keenly interested in integrating as many DEXs as possible. We believe the main point will be to onboard as many tokens as possible to our pools to show up on the aggregator searches as often as possible.
Q6.Which partnerships do you target and with which goals?
DANIEL: So on adding to the previous answers. I focus heavily on DeFi projects for now. Beyond finance will be the first heavily DeFi focused and expanding project that we locked in. As they are partners with lithium and other good-tier projects, having projects hopping on is a matter of time as they are willing to test and co-market with us.
The goals of every partnership are to
1. Test the structure of what projects need
2. Make a profit for both sides
3. Make XFai known to their VC / backers
Q7. When can we expect the updated website?
LUM: We’re working on rebranding the whole site. More info on this hopefully soon.
TAULANT: Also, the new site will be focused solely on the DEX, which will make the product far more obvious.
Q8.Would there be a new whitepaper to accompany this?
LUM: Yes. We are in the process of writing the whitepaper that describes the logic of our new dex architecture. We will publish it when the dex is on the mainnet.
Q9.Nowadays, projects get the chance to be seen by a wide array of audiences on platforms such as YouTube. What is XFai’s plan here?
LUM: Pretty much the same answer as for a previous question: We have to integrate as many tokens as possible + get our dex into well-known aggregators. And of course, do a lot of marketing in parallel. Getting into aggregators though is crucial. Once we’re in aggregators, people don’t have to “see” or know us — aggregators will simply route swaps through us because of the lower slippages.
TAULANT: Keep in mind that some of the bigger investors in XFai are aggregators as well. Also, if there is one thing we have seen in regard to liquidity pools, people are willing to put in their tokens for a high APY, regardless of the project’s background. We will be the only platform that can offer high APY on every token onboarded.
DANIEL: Larger platform exposure is always welcomed and also in consideration but we have to maximize the opportunities and have a good start product well built in the beginning.
Exposure in this market is not cheap and always must be done with a good KPI strategy.
Q10. More and more financial NFTs are appearing now. How do you view the prospects for financial NFTs and will XFai consider the liquidity of such NFTs?
LUM: Yes, the dex will include a fractionalized NFT option as well, but not right away. We will first deploy the dex to the mainnet, and add the fractionalized NFT option as a new feature afterward.
Q11. When can we expect the updated literature about XFai?
LUM: By literature, I assume you mean whitepaper and documentation. The documentation on the dex will be out once the test net is out. The actual whitepaper explaining the contract details will be public once the dex is on the mainnet.
TAULANT: Our priority is to get the developer documentation done for the aggregators to easily integrate with us.
Q12. Speaking of the mainnet and the testnet. When will the testnet go live?
LUM: Soon. Personally, I hoped for mid-November, but due to us having to spread thinly on a lot of things, it looks more like early December (if everything continues to go smooth as it has so far).
Q13. The community is also keen to know, how will LP be moved from farming to the DEX?
LUM: Great question. We will have to launch a side contract that connects our farming page to the dex. We cannot share as of now a lot of information on it, but I believe that current XFIT holders will be quite happy when this side contract gets introduced. Let's just say XFIT holders will have a special treatment in the dex 😉
Q14. Will dexFai have the ability to buy Xfi or relevant crypto directly from websites using a Debit/Cred Card?
LUM: Nope. Reason: Decentralized exchanges are… well, decentralized. One has to connect a wallet (e.g. Metamask) to the dex to swap tokens & to participate in farming events.
Q15. What are the plans to connect other chains and ecosystems with the coming DEX?
LUM: The DEX will be deployed on as many solidity compatible chains as possible. Note: because of technical reasons, to prevent potential attacks, every chain will have a different bridge token.
As a clarification: XFIT holders will have quite some insane benefits on the Ethereum chain. We are still discussing how to benefit the XFIT community in other chains as well.
TAULANT: To reiterate, current LPs will get exposure to all those other chains. Current XFIT holders (not farming) will have a chance to get exposure manually, but LPs will get the sweeter deal.
Q16. You have touched that XFai DEX will be the most capital efficient. Do you have indicative statistics on how much more efficient the DEX will be?
TAULANT: We will write a blog post explaining the dynamics once we’re done with some of the more pressing tasks.
Q17. Will there be a bug bounty for the DEX?
Q18. What are the plans to make XFai more decentralized e.g. transfer to a DAO?
LUM: There won’t be any parameters in the DEX that can be changed by anyone, so it will be decentralized from the get-go. We also won’t have any control over the DEX (the smart contract is non-upgradable). We will want to create an XFai DAO soon-ish, but we want to ensure that the governance structure is right. That is, we are very against current DAO governance structures, which essentially masquerade themselves as being “community-driven”, but in reality only benefit whales.
TAULANT: To explain what we mean by the problem with whales. DAOs that are in control of parameters that determine the returns and risks to capital (such as LPs) have the fundamental flaw whereby they generally have one set of people (governance token holders) voting and another set of people (LPs) holding the risk. We can see with other DAOs that this is starting to backfire now, something which we predicted would happen. We believe that LP risks/rewards and any DAO voting need to be fully aligned at all times. We are currently looking into different ways how to do that efficiently.
Q19.Next, are there any plans for a treasury or insurance fund to be utilized in the case of a successful exploit?
TAULANT: We have looked into insurance but in our opinion, there is currently no sensible decentralized solution to this problem. All current insurance providers In our opinion have systemic risks which will make them go under when anything major will happen. We will keep an eye out for good solutions, and it’s good to have, but not a must-have. To clarify, by anything major we don’t mean to us, but to any DeFi product.
Q20. Which feature are you as a team most excited about?
LUM: Personally — the bridge token burning mechanism that enables zero slippage between pools. We’re quite proud of that invention.
TAULANT: For me the burning dynamics.
Q21. Will there be vesting for the BSC allocation?
TAULANT: We are currently working out the best approach to that which won’t affect current token holders. We will make a blog post once that is set and tested.
Q22.How does XFai plan to remain solvent, will a portion of the fees be diverted for ongoing development/maintenance?
TAULANT: A very small fee is currently set in the contract which will go towards development and other requirements, very similar to the 0.005% fee of Uniswap, though this fee will not be enabled by default at first.
Q23.What are the next phases of development and estimated timescales to release?
LUM: Get the DEX out
- Launch it on as many chains as possible
- Incrementally add some new features to the DEX through side contracts (such as fractionalized NFTs)
- Start with Phase 2 of the project.
Every incremental feature that we want to add to the Dapp UI, should be online before the end of Q1, if everything goes well.
Q24. Will XFai implement layer 2 solutions for gas on Ethereum?
LUM: No. We will host the dex on some L2s, but we will not create our own L2 solution.
TAULANT: To make an important point: In our opinion, there are no real L2 solutions for account-based blockchains atm. Polygon, Optimism, StarkNet, xDAI, etc are all in reality standalone chains with some type of bridge. This is one of the reasons why each DEX deployment will be separate.
Q25.And how much of the DEX code will become open source upon release & how much will be proprietary which will be impossible to copy?
LUM: Everything that XFai will ever make will be open source.
Q26. Can you expand on the NFT aspect of the DEX and what is the unique selling point or value in this offering to XFIT holders?
LUM: I’d divide these questions into two questions:
Q27. Can you expand on the NFT aspect of the DEX?
LUM: We are looking to add an additional feature to the DEX sometime after launch which allows for the creation and hosting of fractionalized NFTs on the DEX.
Q28. How do XFIT holders benefit from this DEX?
LUM: Same as for a previous question — Aside contract will be launched for current XFIT holders. Through that aside contract XFIT holders will benefit from the DEX (more information on this sometime later).
Q29. Previously it has been stated that: “The rewards will be distributed in proportion to the following factors: Amount of LP held, Duration of LGE participation, Dripped XFIT reward held (not sold) Is LP still taken into consideration and how much impact on the airdrop would it have if it is removed before the 2nd snapshot?
LUM: LP is absolutely taken into consideration as well as the duration of farming. For gas efficiency reasons our contract doesn’t have the ability to give us that data but we will be doing these calculations via transaction data instead of through a third party.
We are currently reviewing what % of the redeemable tokens on each chain should be redeemable by LP holders. The final BSC snapshot will be effective just before the BSC launch, so people still have time.
The impact is nonlinear, so the longer you held, you will get more tokens redeemable on the other chain. This is to encourage long-term farmers.
Q31.To be clear if you remove the LP before the 2nd snapshot you can still get an airdrop?
TAULANT: Yes. However the closer you are to the final snapshot the more you’ll get. The exact formula/staging will be made public before the airdrop
Q32. Do you still intend on managing liquidity on other DEX’s; which DEX’s do you have in mind?
TAULANT: No, as that was how the DLO handled things. the DEX does not need active management. Periphery contracts will do things along those lines later on.
LUM: During Phase 2, but honestly, that’s gonna be a whole new and different project. Still, lots of planning is required there.
Q33. XFai has partnered with Symanto to supercharge the various developments at XFai with AI implementation. Can you highlight the benefits of this partnership and how is the integration of AI technology development into the DEX progressing? Will these feature(s) be released as part of V1?
LUM: Also phase 2.
Q34.Can you expand upon “Interest rate / APY arbitrage will become a thing on our DEX” and provide real-world examples on how this may be used?
TAULANT: This is one of my favorite topics. The way this will work is similar to the interest rate carried in global FX markets today. People who are for example interested in a USD denominated return will move their positions to various tokens which at their current price-to-APY get you a higher USD denominated APY. This means there is a new type of arbitrage on our DEX whereby arbitragers stay inside the DEX as LPs but move their positions between tokens, equalizing over time the APY across all tokens (most likely in USD terms).
Q35.Do you have a FIGMA to present to us to get an idea of the visual and the graphic charter of our DEX?
LUM: Sneak peek (there will be a dark version as well of course).
Thank you to all those who participated in the AMA. We are excited to be sharing our journey with such a passionate community.
We look forward to hosting the next AMA next month with more updates. Stay tuned for more information.
XFai develops tooling for the DeFi space, graphing it to build game-changing products. The XFai DEX is set to invite mid and small-cap tokens to start earning APY on their token holdings. We are aiming to become industry-first in providing a more efficient, transparent, and fair way for everyone to get involved at an early stage. The LGE for XFai’s native token, XFIT, was launched on 16th April 2021. We invite everyone to join the DeFi revolution, spearheaded by XFai.