XFai Insight: XFIT LGE Launch hits 25% of Global Ethereum Blocks

Today saw the launch of the much-anticipated XFai Liquidity Generation Event (LGE). At 13:00 UTC on April 16, XFai opened its doors to welcome liquidity farmers who have been waiting to be involved in this unique opportunity. The Potentializer successfully kept the price of XFIT stable within the $0.10 — $0.20 range to bring maximum benefits for the liquidity farmers. However, due to the extremely high demand that saw XFai take up 25% of the global demand on Ethereum, some users experienced certain friction while attempting to stake their liquidity. After the valuable feedback from various community members and reading all the comments shared on social media, the team at XFai has identified two central issues: extremely high gas fee being displayed when attempting to stake liquidity, and suffering from failed transactions. We have put together this insight report to offer explanation, share the progress, and provide solutions.

Issue 1: Metamask Displaying Extremely High Gas Fee

When participating liquidity miners attempted to stake their liquidity, some users experienced Metamask displaying extremely high gas fees, ranging from 5,000 USD worth of ETH, to 10,000 USD worth of ETH in some anomalies. This resulted in the affected users rejecting the stake. We understand that the experience diverges from our “frictionless farming” ethos, and we would like to offer our sincerest apologies for the affected users.

With USDT and in a few cases of USDC, the tokens carry an abnormal behavior in specific cases, whereby when a transaction fails and the owner of the wallet re-attempts the same exact transaction, the ERC-20 allowance fails to reset. To mitigate these differences, the token (USDT, and in highly irregular cases of USDC) resorts to requesting an extremely high gas fee to almost force the users to reject the transaction.

The XFai LGE launch entered the Ethereum blockchain with considerable network pressure on the Ethereum block due to the large volume of transactions from users participating in the LGE. The blockchain data shows that during the first few hours of the LGE, almost ¼ of the blocks contained transactions requesting XFIT (that is 25% of global demand!!). This resulted in a lot of transactions simply not being able to enter the block, essentially halting a significant portion of the Ethereum blockchain. Once the generated transactions failed to enter the block, the users experienced the issue of Metamask displaying extremely high gas fees.

Nonetheless, the originating issue stems from the UI of the XFai LGE. XFai takes full responsibility related to this issue, the development team have made it their primary focus to resolve the issue.

An upgrade has been developed, tested, and successfully implemented into the XFai LGE UI and the dashboard to reset the allowance to 0 to override the extremely high gas fee being shown on Metamask. Since the implementation of the solution, extensive testing of the solution was carried out. At the moment, the issue could not be reproduced, indicating that the solution is extremely effective and should completely mitigate the issue. We are continuing to keep an eye on this, and we highly encourage any participating liquidity farmers to report the issue to the team, should they be able to reproduce the issue when attempting to stake their USDT.

Issue 2: Failed Transactions

The issue of failed transactions and users having had to pay gas fees on the failed transactions truly resonate with the entire team at XFai. We understand that it is frustrating when this happens, and we would like to offer our sincerest apologies and an accurate explanation to the users affected.

As mentioned in the previous point, the demand generated by the XFai LGE was extremely high, well surpassing our expectations. As this halted a portion of the Ethereum blockchain with transactions not being able to enter the block, Etherscan and Metamask showed that the transactions have failed. However, our research and the fineprints in Etherscan both indicate that even when Etherscan is showing the transaction to have failed, Ethereum miners are still able to pick up the transaction and insert it into the block to be processed. In this case, the failed transaction would simply be rendered successful when the gas fee requirement in Ethereum has been reduced. In order for this to happen, the qualifying circumstances require the user to not submit any additional transaction until the transaction has been picked up once the gas fee requirement has been reduced.

Due to the high built-up excitement for the XFai LGE, many users have naturally attempted to submit the same transaction for the second time, nullifying the qualifying circumstances in order for the failed — in fact simply pending for a long time — transactions to be picked up by the miners again once the gas fee environment has been optimized. Thus, it resulted in users experiencing failed transactions and having to pay a gas fee on the failed transactions.

This issue is naturally resolved when the gas price environment in Ethereum optimizes to become lower. Friday tends to be the day that experiences the highest gas price, while Saturday and Sunday tends to be the days with lowest gas price.

While the issue of failed transactions should be naturally resolved during the weekend, the team at XFai is currently conducting extensive research to further understand the issue and connect with the community members affected. Therefore, we strongly encourage the affected users to contact the team and submit their failed transaction records shown in their Metamask or Etherscan. This would not only benefit the team’s effort, it would also act as a method of record keeping that could be utilized later for additional purposes in the benefit of the community.

Please see the bottom of this article to report your failed transactions for further analysis.

Protecting the Farmers and 2000% APY for Retail Investors

During the XFai LGE, the custom-developed anti-bot technology has successfully fought off initial bot attacks, while the Potentializer was initiated to keep the price of XFIT within a predetermined, steady range between $0.10 and $0.20 per XFIT. The main priority was assigned to protect the farmers and the community from impermanent loss and slippage, while sustaining healthy APY on an increasing Total Value Locked (TVL) of the pool.

During the early hours of the LGE, participating retail investors who staked their stablecoins for liquidity farming benefited from between 1500% and 2000% APY. To minimize the impermanent loss and protect the farmers while maining fair APY, the Potentializer kept the price controlled, and continues to do so. This allows for the wider community to enter the XFai LGE and receive significant benefits, making the LGE fairer for everyone.

At the moment, there are still an increasing number of pending transactions — some being pending for as long as 5 hours — that are beginning to come through as the Ethereum gas price starts to become lower. This indicates that the steady upwards pressure is expected to continue, while the TVL is also expected to continuously increase.

Despite the issues caused by substantially high demand, we are proud to report that the smart contract deployed by XFai has been executed flawlessly as expected. The cause of the issues is strictly limited to the frontend of the interface, along with the high overall demand within the Ethereum blockchain.

A substantial portion of the current liquidity is in the current pool for the long term, with investors doubling down on their commitment to support the XFai ecosystem.

XFai is committed to making the XFIT LGE a resounding success for our community members and supporters. We understand that day 1 of the XFIT LGE has been met with its fair share of challenges, yet the pressing issues have been resolved while the support from our partners has been unrelenting. XFai also plans to share frequent updates, including insight reports regularly, with the community to recap each day/phase of the LGE, and to provide a transparent overview of any issues found and solutions implemented. We look forward to your continued support, and wish you a wonderful weekend as we push forward to make the XFIT LGE a massive success over the forthcoming LGE farming period

About XFai

XFai develops tooling for the DeFi space, graphing it to build game-changing products. The XFai DLO is set to invite mid and small-cap tokens to start earning APY on their token holdings, while the XFai LGE is set 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 April 16, 2021. We invite everyone to join the DeFi revolution, spearheaded by XFai.

Appendix:

Reporting Your Failed Transactions

  1. Click on the Metamask extension
  2. Go to Activity
  3. Click on the failed transaction
  4. Click the arrow that when hovered over it, says “View on Etherscan”
  5. Fill out this form: https://forms.gle/8NpeMY8uidGnEHFG7

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XFai develops tooling for the DeFi space – we graph the DeFi space to build game-changing products. Starting with the DLO: the DEX Liquidity Oracle