Xfinance Xplained — A User’s Perspective
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Unfortunately Xfinance was a scam.
It was an expensive lesson to a lot of people, including myself.
When it come to crypto, stay vigilant and never invest more than you can afford to lose.
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I recently learned of a new ERC-20 token ecosystem under the banner Xfinance. There is a lot I like about what Xfinance is doing, and found myself very interested in the technology and their suite of tokens.
To be clear, I am not affiliated with Xfinance, nor is this article investment advice. This is simply an explanation of the Xfinance ecosystem from my perspective as a user interested in the technology. All the information in this article is based on my review of public information available on the web.
Xfinance is “A Full-Stack DeFi Protocol” which consists of various ERC-20 tokens that all play a role within the tokenomics of the Xfinance ecosystem. At this time, there are three tokens in the Xfinance ecosystem: XFI, XSP, and XCORE. It is possible that more tokens will be added, however, as of this writing, there are 3. Actually, more like 2-1/2. XCORE has not yet been released. (more on that below)
“XFI will become the governance token in the Xfinance ecosystem, and it also has deflationary properties. The better the Xfinance ecosystem develops, the greater the value of XFI. (source)
Currently, users can stake XFI to receive XFI rewards. Users staking XFI are rewarded XFI at a rate of 0.2% to 0.3% APR (daily). These daily rewards come from ecosystem’s reward allocation, which is not inexhaustible. In addition, there is a 2.5% fee to both stake and unstake XFI that is distributed to current XFI stakers.
NowEx: Xfinance is directly connected to the NowEx exchange by their CEO @nowexming. The NowEx homepage currently indicates . . .
The 30% discount appears to tie directly to plans to have NowEx use 30% of the platform’s monthly trading fees to buyback and burn XFI tokens.
xPerp: Xfinance will be releasing xPerp, a “decentralized AMM perpetual contract exchange, transaction fees will buyback and burn XFI”.
According to a dExplain article, xPerp will be used for leverage trading.
xVault: Xfinance will be releasing xVault, a decentralized yield aggregator that will automatically move positions between agreements to help depositors obtain the highest financial income. xVault withdrawal fees will buyback and burn XFI. (source)
XCORE: XCORE will be the newest addition to the Xfinance token ecosystem. A fee of 1.1% will be taken from every transaction that transfers XCORE. Of this 1.1%, 0.05% will be distributed to XFI stakers, and 0.05% will buyback and burn XFI tokens. (see below for further details on XCORE)
xNFT: Xfinance will be releasing xNFT, a Non-Fungible Token trading platform for trading all NFT assets. xNFT transaction fees will buyback and burn XFI. In addition, XFI stakers will receive additional rewards in unique NFT collectibles. This is already occurring before the release of xNFT. There was a recent announcement that XFI stakers will receive an NFT based on the amount of XFI staked as of the snapshot date 10/15/2020. Presumably, the more XFI an address stakes, the rarer the NFT collectible reward.
A common theme to all these functions as they relate to XFI, is the use of fees to burn XFI. This is highly deflationary, and given the a total supply of only 50,000 XFI, will likely push the price of XFI significantly higher.
Xfinance states on its homepage that “XFI will full capture all the benefits generated by the Xfinance ecosystem, buyback and burn until 1 XFI”. This reminds of the movie Highlander. The immortals in Highlander destroy one another gaining the other’s power until there is only one immortal left.
The XFI supply going down to 1 XFI is however unlikely, considering the exponentially diminishing amount of XFI purchased and burned. I will save the nerdy analysis of that for another time.
XSP will be the grease to the most important product in the Xfinance ecosystem, XSwap. XSwap will be an automated market making exchange (AMM) similar to Uniswap.
XSP stakers will receive 0.05% of transaction fees on XSwap; 0.20% of XSwap transaction fees will go to liquidity providers; and 0.05% of transaction fees will be used to buyback and burn XSP.
XSP is the reward token of the XSwap farming pools. XSwap farming provides rewards equal to 1,000 XSP per block. The average time it take to mine a block on the Ethereum blockchain is about 13 seconds. This means that 1,000 XSP is distributed to XSwap farming pools approximately every 13 seconds.
Current reward multiples for the available pools are as follows: XSP-ETH:60X; XSP-USDT:50X; XFI-XSP:12X; XFI-USDT:12X; XFI-ETH:12X; XFI-LID: 7X; DEXT-XSP:7x; DEXT-ETH:3x; UNI-ETH:3X; LID-ETH 3X; Others:1X;
The below chart uses the change in circulating supply of XSP indicated on the XSwap Homepage to verify the 1,000 XSP per block rewards based on increases in circulating supply.
For the periods indicated in the chart, the circulating supply of XSP increase by an average of 4,360 XSP per minute. 1,000 / 4,360 = 0.22937, this multiplied by 60 seconds equals 13.76 seconds; the average time it took to mine a block on the Ethereum blockchain.
The total supply of XSP is 2,000,000,000. This makes the 1,030,268,649 circulating supply equal to 51.51% of the total supply.
XCORE will be a deflationary farming token with two primary features to keep it from losing its value:
- Charge a fee on token transfers
- Users can earn the fee by staking
A fee of 1.1% will be taken from every transaction that transfers XCORE, 1% will be distributed to XCORE LP stakers, 0.05% will be distributed to XFI stakers, and 0.05% will buyback and burn XFI tokens.
There will be 10,000 XCORE tokens forever. There is absolutely no way to create new XCORE tokens. This means the circulating supply can only ever go down, period.
You cannot yet purchase XCORE, but there is an XCORE Liquidity Generation Event where users can contribute ETH towards the creation of the XCORE Uniswap Liquidity Pool. This event ends 20:00 (UTC+8) October 15, when all ETH and XCORE will be sent to Uniswap.
The XCORE Liquidity Pooling event for UniSwap allows investors to lock their ETH. After the event is over, all deposited ETH will be deposited as liquidity to UniSwap. ETH depositors will be able to claim their share of LP tokens once the event has ended and liquidity has been added. (source)
LP tokens users receive as a result of the XCORE Uniswap LP Event will be locked. This means that users will not be able to remove this liquidity from the liquidity pool (i.e., you will not be able to withdraw the underlying ETH-XCORE).
Users can stake XCORE Uniswap LP tokens for rewards, or could sell them as a whole on sites like Balancer.
XCORE will be available for purchase on Uniswap once the XCORE Uniswap LP Event is over.
I am still trying to determine if users can add liquidity to the Uniswap LP pool after the event. I would imagine that users can add liquidity to an ETH-XCORE LP token in exchange for a different ETH-XCORE LP token that can be removed into its component tokens. I would also imagine that this (these) subsequent LP tokens could also be staked for rewards. I have, however, not been confirmed this.
Xfinance recently posted a twitter poll regarding a change to the amount and allocation of the XCORE transaction transfer fee:
XFinance is creating a robust token ecosystem that integrates all the latest DeFi into three interrelated tokens: XFI, XSP, and XCORE. All of these tokens have a buy back and burn function built into the Xfinance ecosystem. Token buy backs and burns are deflationary and value adding. The token buy back causes buy side action (increasing demand and price), and the token burn decreases the circulating supply of tokens (increasing the per token value relative to market cap).
Each token will have their own role to play within the Xfinance ecosystem. They will all have their own inherent values, as well as added value created by their synergistic relationships with one another.
I for one, am truly exited to be a member of the Xfinance community, and have a birds eye view of the unfolding Xfinance ecosystem.
To learn more about Xfinance, a great place to start is the Xfinance Telegram. When joining the Xfinance Telegram, be sure you are joining the official Xfinance Telegram. Scammer Xfinance groups abound the virtual halls of Telegram, so be cautions. There are no airdrops or giveaways from Xfinance. If you see such claims, you are in the wrong place.
Should you decide to hop on the Xfinance DeFi train, I hope to see you in the virtual halls of the right place.