Your Staking Questions Answered
I understand that the earlier you stake your XFIT you potentially have a high % of the deep pool. however, I am quite lost after we receive the nft as proof of stake to collect the reward. When selling part of the reward does the value of the nft goes down?
Because I am just thinking how do we sell the reward to make a profit and when restake do we get the same amount of % of the deep pool?
My problem is that I have been farming since day 1, and I haven't made a profit yet. so my logic is to at least break even and invest my gains in the project.
Each Liquid NFT has an underlying value, which gets determined based on the amount staked, as well as the time of the staking. If you redeem parts of your stake, the underlying value of the NFT decreases. This is to incentivize users not to redeem right away. Technically, considering that one could simply auction an NFT on e.g. opensea, one could also “redeem” an NFT by selling it. The nice thing is that each NFT has a deterministic lower bound value, so everyone would know how much not to sell it.
How will you invite new investors? How about marketing?
Once the DEX is out, we will focus quite a lot on marketing and on including the DEX on as many aggregators as possible. Note though that we want the DEX to grow organically / sustainably, marketing alone will not be enough. To form network effects, the UX has to be as seamless as possible and the service has to be financially more rewarding than other services for users. We plan to deliver on both Marketing, UX, crypto economics.
Once the DEX is out we will roll out a seamless way of farming on the DEX. Uniswap effectively lost most new tokens from 2021 to Sushi and Pancake Swap because they changed their LP mechanism. By having an easy and straight-forward way to launch farming tokens we believe we can attract a lot, if not most of the new tokens being launched. We believe that DEXFAI will be the go-to place for all farming projects as it is the only platform where you don’t need to split pool liquidity between different pairs. Furthermore, we will incentivize users potentially with double-dip farming, meaning farmers would get their farming tokens + XFIT for a short time, similar to double incentives on Curve today. We are also working on DEX aggregator and arbitrager integration which should drive most of the transactions to DEXFAI.
If my share is diluted as others join, as one of the earliest stakers, could this result in the value of my share decreasing more from users joining than from the increase from XFAI?
Great question. Your initial observation is correct, the more people join staking, the less the percentage of each staker becomes. Note though that the share allocation drops with every stake, while the value of XFAI increases with every swap. So I would not be too worried about that. Your observation though is the main reason why we did not even want to do marketing for staking. We made this for the existing community, doing marketing for it would just lower the share of the community.
If someone starts staking in 6 months time, will the value of their NFT start from 0 and accrue? Or will they immediately have value in their NFT. How will the earliest adopted not get shrunk out?
The Value of the NFT is derived from the SOC “deep pool” (i.e. a part of the DEX). The NFTs will therefore not have an underlying value before the DEX is out. Something else which is important, which we made not clear enough earlier:
Each NFT has a continuous vesting period of 1 year, but that continuous vesting period will only start once the DEX is out. That’s because 1) One can’t redeem before the DEX launch anyways, because there is nothing to redeem. And 2) The whole point of the continuous vesting period was to help the DEX bootstrap. If Big whales could redeem large chunks right away, they’d drain out liquidity before we’re able to form network effects.
1. So, let me see if I got this right… The nft does not generate rewards in form of XFAI? Does it generate increase in its own value which can then be eventually later passed on (by selling or collatering the nft)? Am I correct? (Like owning a Berkshire Hathaway stock — you get no dividend, but the stock itself might grow up in value)
2. What is then the point of staking XFIT and what are the incentives of doing that?
Shouldn't a speculator want to hold it as its demand is continuously increasing?
3. How sure is the team on the q1 dex launch deadline? I mean we’ve had some postpones before
4. Does the dex need a new audit as well ir has it already been audited?
5. Will the team and advisors be able to stake their xfit tokens before everyone else? (If so, i find no point in staking — i have a good share of xfit, but it’s nothing compared to the millions of xfit tokens the team owns)
6. Would you consider alocating the incentive for staking on daily basis, not order of staking based? I mean, people who stake in day 1 should get the same incentive, people staking in day 2 a lower incentive and so on…
This would help tremendously with eth gas costs as well
- Not entirely sure I understood the description, but here is how it essentially works: Every NFT has a % of the DEX. That % can be redeemed for XFAI tokens, which the DEX accumulates through the contract’s hyper deflationary burning mechanism. Since the XFAI token is the bridge token of the DEX, it can be swapped with every other token on the DEX right away.
- One receives XFAI tokens, which cannot be bought in any other way. Since the price of XFAI grows faster than that of XFIT (because of the time lag), staking is quite rewarding. Both values increase, it’s just that one will increase faster than the other. Liquid NFT holders would also eventually be able to use their NFTs as collateral and get low-interest loans or high margin positions. Liquid NFTs can also be sold on any NFT marketplace at a higher price than the lower bound which would be used by money markets, this is because outrights buyers would factor in the future burn in the system as well as the future deflationary pressure.
- Honestly, not sure at all. We’re still looking to wrap everything up for Q1, but auditing it within Q1 seems very unlikely. We would also like to test it extensively for a minimum of 1 month internally. All I can say is that a Q1 mainnet launch seems unlikely. We could probably pull it off, but I don’t think that it would be a wise decision. The longer we test it internally after final completion, the higher the chance gets that it will not get hacked. Security will be our number one priority.
- It will need an audit after the final commit. We have decided that for the DEX, we want to be more picky when it comes to choosing an auditor. There are probably only ~3 auditing firms I find legit, we will have to get the DEX audit done by one of those firms.
- Well, yes, we will. I find your reaction here though a bit perplexing. 1) We are purposefully trying to flatten the curve so that the others can benefit as well, and 2) We didn’t have to do this. Staking doesn’t benefit the DEX at all (or us, the team), it actually indirectly harms the DEX a bit. We wanted the true believers of the project to have a share in this, that’s why the temporal dynamic of staking was designed like that. Otherwise a whale could simply come after 1 month and get more shares than you, even though you were here from the first day.
- We cannot redesign the whole staking mechanism 2 days before launch. I also don’t think that it would make much sense. If your stake depends on both the amount staked as well as day staked, that’s pretty much equivalent to calculating the share by considering the amount and the existing reserve in the contract. I have run a lot of simulations with different functions, the one we chose was 1) the most gas efficient, and 2) the best one for the community. If you have e.g. 10k tokens and you stake early, you will have a bigger share than a whale that puts 1m a week later. What is there not to like about it?
We are now hiring an internal Red Team (https://en.wikipedia.org/wiki/Red_team), so we are going with the Blue team (builder) and Red Team (attacker) approach. We think that overall this, combined wth bounties makes the most sense.
So. As for our farming period. We have farmed a certain amount. Let says. 500k XFIT. Which makes is possible for us to put into the staking contract.
After entering the staking contract with 500k XFIT. Equals tbe value of let’s say: 50k USD.
Mathematically. The raising price of XFIT will be gain the amount worth in USD. 500k XFIT x 1 USD a XFIT = ^^
Now comes the questions.
1 — How will this 50k USD / 500k XFIT/XFAI be presented in a liquit NFT.
2 — Will this 50k USD / 500k XFIT/XFAI redeemable in either coins? Or?
3 — Will the staking contract and UI give us an direct view on our %’s in staking? + The value of our initial investment. As for now we all know our 500k XFIT will be worth 2m USD on a price of 4USD per XFIT/XFAI
4 — How come, the wallet addresses who got in the very first day on farming. Who went all the way from day until today. Who struggle’d trough all the doubts and price drops, but kept believing. Won’t get the same % in the SOC as any other adress who came in the very first day? Isn’t it a bit unfair that we as day 1 investors/farmers will have a chance to get bellow in %’s on people who joined just a week ago?
I mean… I know we are eligible for the BNB airdrop… but still.. getting into staking contract for a lifetime, and being here from day one…. Investing into nothing more than an Idea…. IMO… all of the very day one’s should have prio on a same certain %….
Hope these questions makes sense.
- People stake XFIT and get an NFT with a value in it (a share). The % of that share can be calculated by taking that value and dividing it with all the shares in the contract. That represents the % that your NFT has in the deep pool of the DEX. Note, NFT holders don’t get 100% of the tokens from the deep pool, they get 1% of it. So the value of your NFT gets determined by the amount of XFAI that gets accumulated in the deep pool after DEX launch.
- It will be redeemable only as XFAI, which is the bridge token of the DEX and which is swappable with every other token in the DEX.
- Yes, the UI will show each NFTs % as well. Once the DEX is out, it will also show the usd value of it (before the DEX that number is not computable, as there is nothing to redeem).
- This question / demand seems perplexing to me. 1) We didn’t have to do this. Staking doesn’t benefit the DEX at all (or us, the team), it actually indirectly harms the DEX a bit. We wanted the true believers of the project to have a share in this, that’s why the temporal dynamic of staking was designed like that. Otherwise a whale could simply come after 1 month and get more shares than you, even though you were here from the first day. And 2) The community was able to farm XFIT for a whole 1 year with an insane APR, that token is the only one that can be used to stake… so the community is benefiting in every way here.
1.Is there a scenario where the redeemed Liquid NFT will give back less XFAI than the XFIT used to creat the NFT?
2.Will boosting an NFT always reset the vesting period for all previously stacked XFITs or just the added XFIT?
3.If the answer is yes for the above question, will the vesting period always be one year?
4.Is it possible to give options for vesting periods that correspond to the DEX share bought? For example, if someone wants to vest for 6 months. They will get less share of the DEX than if they vest one year.
- It would if there was no vesting period. Since there is a vesting period, that’s not really possible.
- All of it gets reset.
- Whenever someone mints or boosts an nft, the vesting period will always be 1 year.
- Nope, everyone will have the same vesting period. The whole idea of the vesting period is to help the DEX with bootstrapping.
If the medium article that introduces “burning” there are a lot of references to “xfit”, should this really be “xfai”? eg “2. Whenever a trade is performed, a given amount of XFIT tokens flows out of the given pool, according to the constant product functions.”
Yes, everywhere where we see “XFIT”, it should be “XFAI” now. We will have to write other blog posts that explain the mechanics in more detail.
Is there “interest” (Riba)?
We are assuming you are referring to the Islamic concept. There is no compounding and no interest involved as a staker as all appreciation is based on the burn/deflation which is performed by the SOC. Within the DEX the only entities which get compounding are the LPs of the individual tokens, but even they only get fees rather than interest.
1. Will my share of the dexfai increase or decrease as I accumulate or redeem part of the fees received? I mean if I don’t redeem anything at all will my share of the dex fees increase over time as compared to others who redeem part of their NFT values?
2. How do we redeem part of our NFT value?
3. “because XFAI is paired with every other token on the DEX, money markets have a way of setting a trustless lower bound sale price without the need for external oracles.”
Would appreciate further explanation of this part
4. We know that xfit price is correlated with xfai price, however since xfit is what is required to have an NFT wouldn’t the demand pressure increase xfit price higher than the burn of xfai in the dex?
- If you do not redeem, while others do, your percentage share increases. Reason: The way the % is determined is by dividing the NFT’s share with the total amount of shares in the system. The more others redeem in relation to you, the larger your percentage gets.
- There will be a redeeming button in the Manage section of the app, once the DEX is out there.
- The way money markets / lending protocols today work in DeFi is via a combination of oracles for getting *spot prices* externally from a combination of CEXs, and DAO governance setting collateral ratios. Both options are exclusionary, slow, and dangerous in our opinion. Tokens which have most of their liquidity on DEXFAI will have their price discovery happen on DEXFAI (on-chain) and prices won’t be very volatile, think of the very gradual price increase and decrease of XFIT over the last year compared to the rest of the market. Instead the APYs in the pools will move drastically. This means that any money market which onboards the Liquid NFT or even any of the listed DEXFAI tokens as collateral, won’t need an external oracle or even a set collateral ratio for it. Instead they can set a “risk parameter” which liquidates the NFT or token when a certain spot price to slippage ratio (i.e. the real value of the NFT or token) is reached. Now, this gets even more interesting because XFAI and therefore the NFT is paired with every token in the system in an invariant manner, which means that the real price as described above has the biggest “inertia” of all possible tokens, and therefore is higher than other tokens. To give a real estate example: Your house might be worth 500k, but there are few buyers so the real price is 250k if you’d sell now. The bank therefore says you can get a 50% loan against the 250k, ie 125k loan. If your house instead was liquid then the 500k would actually be lets say 750k because potential buyers also have a liquidity premium. On top of that the bank would be more certain and give you a eg 75% loan against 500k of the price, ie 375k. So in this example you’re getting 3x more liquidity for the same asset, without anything except “the real price, ie spot price to slippage changing.
- No. Burning in the DEX is enormous. Most people are still not realizing how enormous it is.
The future value of XFAI will be dependant on usage of the DEX. Marketing will be vital in increasing awareness and usage in the future. Can you share with us some details regarding the marketing strategies that will be used when the DEX launches and the marketing budget available? — Vampire Attacks?, Youtube influencers? crytpo media publications and advertising?
Behind the scenes:
- Aggregator integration and incentivization.
- Arbitrager integration and incentivization.
- Partnerships to use the DEXFAI weights as oracles.
- Farming partnerships
- Influencer partnerships for farming (via projects). This way we can leverage the onboarded projects’ network as well
That is correct.
For marketing strategies, its more on having the right partners WITH USERS already.
When our DEX launches, we will integrate the DeFi projects that we already finalized. After they experience the effect, see firsthand the prospect of using our DEX and different communities, see the gains they can make. Then it’s game over. Domino effect right there. But its always the early projects that is vital. Farming partnerships and leveraging that to their partners will be massive.
Vampire attack is such a good and efficient marketing method. I personally saw the recent results on $LOOKS and $OXD.
Youtube influencers are not the most cost-efficient strategy. I would focus on publications and DeFi related KOLs. And of course, we have a budget. I can safely say that we have enough to give a good blast.
Is there a way to incentivize staking without causing a gas war?
I understand that XFAI will not engage any exchanges for listings and exchanges are free to list any token they wish to. Given that we are a fairly small group and we need exposure, how do you plan to market the XFAI token and its utility? I think it would be great to list on a few good exchanges so that people get to know that we exist and that there is a new type of DEX out there. If we don't market the product we risk having it copied by other dexes and they could potentially take over our advantage by establishing our advantages in a stronger manner
We do not care if XFAI, or XFIT gets listed. We actually do not want it to be listed in a centralized exchange, it wouldn’t benefit us. The value of XFAI does not come from the demand to buy it. The value of the token comes from the activity inside the DEX. Giving XFAI, or XFIT tokens to centralized exchanges would not only harm the DEX, but it would also reduce the returns for any Liquid NFT & XFIT holder.
As noted above, listing on CEXs would actually remove possible burning from DEXFAI. This is negative for all users. That said, XFIT will likely eventually be listed by CEXS independently and that won’t have any negative effect on DEXFAI.
Could you do an example using a real dollar value from XFIT staked to end of first year?
This blog post has mathematical examples of the “lifecycle”: https://medium.com/xfai-official/xfai-staking-how-itll-work-9d7e101cef99
Does XFIT have any utility outside of buying an NFT for staking?
As of now, no.
1- XFORCE members are active every day and will be for months and years to come, some XFORCE members have put in all their savings and would like to see their bag swell …. Is it possible to offer compensation for active XFORCE members, e.g. $XFIT earn lost or other solutions, we can be as powerful as influencers I think.
I propose this idea, as I am a father of 4 children and I would like to make a portfolio for my 4 children with these rewards
2 — I know that I regularly ask for more accessible elements to help an investor understand why to deposit liquidity, there is a person who recently made simulations, it would be necessary to make a persona with scenarios over several years, I know that it is almost impossible, but it will be easier for the XFORCE to explain and make our community grow
3 — Explain, because today I do not understand anything, if after the DEX, what can happen if we want to release XFIT or XFAI, in short explain if an investor can enjoy from time to time his gains without touching his capital.
- I am not sure what exactly is being asked. Compensation for what?
- We can share simulations for e.g. a given curve / function used for staking, or for other things, but we are not going to do or share simulations with the aim of forecasting or making any kinds of predictions.
- You can either redeem parts of your NFT in the UI (which would lower your share). Or sell the NFT through some auction (which is nice, because the tokens have a deterministic underlying value). Or you could use the token as collateral for a crypto loan, and invest a part of it in the NFT (this makes only sense if the interest rate of the NFT is higher than that of the loan). You can pick whatever option, we can only show you the options, we cannot give financial advice.
We have staking and airdrop. What we have to expect in the future?
A badass DEX.
Is there any separate incentive for those who have farmed and supported since day 1? Anyone can buy the airdrop. Will there be an exclusive benefit that is available to/for Early Adopters only?
No, there won’t be further incentives.
How will you ensure that early investors benefit and won’t lose out due to dilution from stakers joining down the line?
The value of the NFT of later stakers is much less, so there is no dilution. The upper cap of XFIT can also not be changed, so no dilution there either.
When we will have a video AMA with real people and CEO?
We’re in reality a very sophisticated AI chat bot. The generative model is still being trained for video outputs. Audio might be achieved earlier.
I have often read this question, the first investors of Day 1 will have an airdrop as a reward, it is already extra-ordinary, but not to lose investors of Day 1 we could put a bonus (save this entry date or a multiplier) for investors of Day 1
There won’t be further incentives. It’s not the first farmers who get the airdrop, but the farmers who continued to farm without selling. The first farmers in who stayed simply get the highest airdrop.
User: G Fomo
1) Will it be possible to split NFT into various wallets without loosing the underlying early staking rewards. Eg gifting some of the percentage ownership to children
2) Where will the total cumulative value of the SOC be displayed (on the website perhaps) and will this be updating in real time as tokens are swapped?
3) With time, the above total SOC value is bound to overtake the market cap of the entire crypto market combined. What do you think could be the implications of this?
4) Imagine a future scenario where for some unforeseen reasons Dexfai has to be shut down, what will happen to the trillions of dollars in the SOC?
5) Can the 1% staking ownership be changed to a different percentage?
- One can transfer the NFT to any wallet, but unfortunately, it is not possible to split the underlying value into several “smaller” NFTs.
- Right now you’ve seen the “legacy farming” tab in the app. Once staking is launched, a “Stake” and “Manage” section will be added. We will have soon-sh an additional tab that that will show the existing NFTs, with the custom made art (The first collection consists of 10 custom made illustrations, but there will more art collections in the future). Getting back to your question, since the SOC is most relevant to NFT holders, we think it would make most sense to show that info in the NFT tab.
- For the 99% that will be forever locked inside the SOC, not much. It will simply sit there forever. The implications are more interesting for the 1% of the SOC that goes as rewards to the Liquid NFT holders. The more XFAI tokens land in the SOC, the less there will be in the DEX. Some people will however continuously redeem their NFTs, causing a downward push. That’s why there is a continuous vesting period for the NFTs, it’s to prevent the whole draining of the DEX. Note though, Even though the spot price of XFAI will become astronomical, the actual adjusted price will have an upper bound that is determined by the liquidity in the DEX. That is why we think that selling the NFTs through auctions could be significantly more rewarding for users.
- Personally I don’t know how one would want to shut it down. Even if everyone in the Xfai team would suddenly die, the contract would not need us to continue running. Other people could simply continue from where we left off. That is true for any DeFi service which is non-upgradable.
- Before the launch, yes (though there would have to be a really good reason for that).. After it, no. We also don’t think that it would be wise to set it up as a DAO controllable parameter.
1) What is my IL measured against? How does the price action of other tokens impact my LP? What are the associated IL risks vs providing a token to the DEX and are they better or worse vs providing paired LP?
2) What are the expected fees I can expect to generate as a LP
3) Is it possible to ever change through an update the % amount that is allocated to the SOC? If not how is it impossible?
4) Are there going to be published test scenarios/functions to work through?
5) Are you going to employ qualified testers?
6) How are you making it clear that “staking” results in token burn of XFIT and you do not get them back or any NFT value until volume is generated by the DEX?
7) Are there any functions or features that are yet to be announced that will be unveiled upon testnet launch?
8) What is the current project launch date of testnet?
9) Presumably there is a dependency to audit the dex prior to testnet is this an external dependency that may cause delays of launch
10) As a LP how are the rewards paid out and are these auto compounding?
11) How many pools of Xfai is there for the bridge pool, is it a single pool or multiple
12) Do you intend of having a lottery function to attract attention to XFai?
13) Can you talk about how swapping LP for LP with no slippage would work and the benefits of this?
14) Do flash mintable tokens count towards the SOC volume?
- As usual, great question Jamie. First let me explain how liquidity provisioning will work, and then we can discuss about the IL part: When a pool is created, the pool creator has to provide 2 sided liquidity, there’s just no other way for that. The two-sided liquidity provisioning must contain the token of the pool, and whatever other token that is hosted on the DEX. Other liquidity providers can then provide one-sided liquidity if they wish (any token that is hosted on the DEX). Usually IL is measured by comparing the reserve ratio of token X_t and token Y_t at timestep t, and comparing it then to the ratio in time step t+n. In our case IL is measured the same way, but there’s a small twist: IL is not determined by comparing a token with the reserve of XFAI in its pool, but with the reserve of XFAI in other pools (note, one cannot buy XFAI from the DEX). So if token X is for example BAT, and token Y is ether, the IL between them would be determined by comparing the XFAI ratio of both pools with one another.
- For now at least, the % is the same as in uniswap but this is changeable.
- Theoretically one could make it controllable via a dao for example, but we don’t think that would be wise. People would optimize it for short term profits, not for system stability.
- In the stake section of the app, we will state “Early stakers get more valuable Liquid NFTs. The staked amount will be permanently locked.”
- No. Maybe. It’s classified. (https://www.youtube.com/watch?v=77pnVFLkUjM)
- We will get back with a date sometime this month (with a date, not launch).
- Same as in uniswap.
- There is the XFAI deep pool used by the SOC, and then there are the XFAI virtual reserves within every other pool in the DEX.
- That sounds like an interesting idea. We might explore smth like that.
- We’re not yet 100% sure if that feature will be included or not. It might sound cool, but there are some drawbacks to it. We will talk more about it in the future.
User: Nigel Murden
(Nigel’s questions are in the form of a diagram which he has provided)
- Does anything happen to the XFAI pool during the XFAI -> Eth swap
- In reality, is there just 1 XFAI pool, which will contain 59004.01 + 592,592?
- Do you do all these same calcs again with ETH?
I am going to answer this with a single answer, instead of 3 separate ones, as the answers to the questions are connected to one another:
There is only 1 XFAI pool in the entire DEX, which is the SOC’s “deep pool”. Each other pool however will have a virtual reserve of XFAI tokens. That virtual reserve determines the exchange value of one token with other tokens. Swaps are facilitated between pools, the SOC only sets the slippage to zero. To ensure that there will always be enough liquidity in the deep pool, after a swap is completed, the total amount of XFAI that were used during the swap (including the amount used for the zero slippage step), gets removed from all pools in the DEX and sent to the SOC. That way the amount of XFAI inside the SOC can always only increase.
Is it possible to stake my Xfit more than one year? 2,3? What happened if it is.
You can keep your NFT without redeeming the underlying value for as long as you’d like. The longer you hold, the higher a relative percentage you should end up with as others before you on the curve likely redeem part of it and therefore increase your relative percentage of the pie.