A Paradigm Shift in Value Accumulation: Introducing xD2
The essence of D2 evolves through xD2, similar to ETH to wstETH ( see Lido), further enriched with mechanisms inspired by xGRAIL and GMX multiplier points.
xD2 is a re-stackable (see eigen layer) token that mirrors staked D2, which is deposited in a LP on Camelot with range 10x the price at the start of the epoch.
Its value is strategically linked through multiple mechanisms to the performance of flagship (ETH++) and tactical vaults (Rodeo++, Grail++, etc.). The primary function of xD2 is its ability to be re-staked in partner protocols, heralding the commencement of the xD2 wars in Q2 2024.
Simply put, xD2 is a token that accrue yield, allowing you to earn extra yield from protocols participating in the xD2 wars
Expect a detailed briefing next week on the deposit/withdraw window between 9th and 15 February.
This article will concentrate on the value accrual of xD2 and how Rangers (see docs) can capitalize on their “role” without forfeiting valuable multiplier points earned through long-term holding.
You should opt for xD2 (and not D2, which serves merely as a gateway to acquire xD2) for three key reasons:
Vault Real Yield: The Heartbeat of xD2
For the forthcoming epoch, the mechanism involves 100% fee matching in D2 for all xD2 holders, representing fees collected from December through May across multiple epochs of our vaults like ETH++, GRAIL++, ARB++, and RODEO++.
That is, 100% of fees matching since December till February will go to the next epoch of xD2 in form of D2 added to xD2 contract.
Circle the 26th of February on your calendar, the Second “Fee share Monday” after the December Airdrop. This will be a day when xD2 holders will celebrate (for those holding post-15th February who do not NOT swap xD2 for D2).
Example
*Following example is only to make math easy and it is not representation of any promise of future performance.*
Vaults make 1M USDC in fees.
- D2/USDC trade at $1
- xD2 supply is 2M
The above ASSUMPTIONS imply that 1 xD2 will be equal to 1.5 D2 or 50% increase in D2 terms.
Considering the next xD2 epoch will be Feb 15th to May 15th, that would correspond to about 200% APR backed by real yield.
The above example implies, by definition, that xD2 after 15th February will always have an intrinsic value higher than D2.
Our Rangers, on top of this will enjoy 50% of these fees as extra-yield in USDC airdrops, directly into their wallets according to the formula disclosed in Alpha Friday #2:
A new official Ranger list will be compiled after the withdrawal window closes on the 15th and disclosed before Fees Monday (as Rangers who sell any tokens will see their time multiplier decrease exponentially and may lose their status).
As discussed on the call with Camelot and GMX https://open.spotify.com/episode/2MfGPOqal0ANQZsgGkGXqq?si=g2PTMKvuTySL3HwlcY7lAA , when Real Yield emerges as the enduring narrative, xD2 will stands strong.
Our official partnerships with GMX and Camelot are not by chance, they are strategic, aligning us with the champions of Real Yield and ecosystem drivers.
Re-staking Yield:
Re-staking is at the core of the xD2 Wars. Through our audited Vault technology, xD2 is more than just single digits yield staking; it enables its holders to access multiple layers of yield. (see real yield definition)
Re-staking xD2 in partner protocols will enable xD2 holders to accrue:
- Real yield backed by vault performance
- xD2 yield from the xD2 wars allocation
- Yield on partner protocols’ native tokens
It’s not hard to imagine how the amalgamation of these yields can result in a significantly attractive APY and unlock to priority access to Vaults which most likely will be at full capacity ( as ETH++ now).
Why should other protocols offer a re-staking solution on top of D2? Returning to the previous paragraph: because we deliver the challenging part — the Real Yield aspect!
Consider the traction seen in protocols like GMX and Camelot, you see emerging protocol like Isekai aimed at accruing, controlling, and building ontop of the real yield (despite its marketing and OHM-like features not being an exact match for xD2 mechanics, their experiment will still serves as a valuable learning case to refine our rewards math, and what benefits GRAIL also benefits us, especially GRAIL++).
Our tokenomics are designed with intention, reserving incentives akin to those seen in Arbitrum DAO STIP, such as 5M rewards or 10% of the total supply, to encourage building upon our foundation.
Once the vault fees become substantial, the benefits will be evident.
How can new protocols akin to Isekai participate in the xD2 wars and secure a share of Real Yield plus the extra incentives?
They can purchase D2 on the open market and deposit on xD2 during the deposit window as any user, but the threshold to win the wars can increase rapidly, making slippage in buying D2 in the open market potentially impossible to qualify apart from trading at 10x where the xD2 liquidity is posted. Early adopters gain more power, faster and compound over time.
Alternatively, participants in the xD2 wars could entice xD2 holders to re-stake their xD2 in their protocols, particularly Rangers, who would need “enticing yields” in order to select with protocol to back.
Decentralized Power: The Ethos of xD2 Wars
Rangers, driven by self-interest, will choose protocols to crown as winners, creating a flywheel effect for D2 and allowing distributions to different types of user bases which do not necessarily need to be consistent with D2 institutional branding.
In other words, D2 will concentrate on what it excels at — vaults and generating fees — while outsourcing the marketing to other protocols “vetted” by xD2 holders, particularly Rangers, through their re-staking actions.
OTC Ranger’s Facility (partial monetization without losing multiplier)
We want to emphasize how the Ranger multiplier, that will be later tokenized, is crucial as it enables Rangers to
- receive the USDC airdrop of 50% of the fees for at least the next epochs, and
- monetize and exercise decision-making power.
However, we recognize that D2 may become a too dominant position in the portfolios of Rangers and will never advocate for overallocations without exception (risking a sell-off at the bottom is not sound investing). We will be able to offer OTC pricing in case opportunities arise over time (IDO, OTC, CEX, Bond, or MM deals) to maintain the pro-rata terms of BWS Labs and remain 100% aligned.
Sound Monetization vs. Paper Handiness
xD2 represents more than a token — it’s a comprehensive strategy for asset optimization and value accumulation for long-term holders, designed to prevent leakage to mercenary capital
see the article on real yield by our own D2 long-term holder Sindermaan!
The introduction of xD2 paves the way for a new chapter allowing for compliant distribution, akin to how LIDO operates with a 20B TVL.
The xD2 wars are not just a one-off event; they are a deliberate design to allow distributions to our vaults and ensure most of the pie stays with our long-term holders.
D2.Finance brings the sophistication of a top-tier quant hedge fund on-chain. Single click deposit into Options Based Strategies focused on risk adjusted returns through decentralized, actively managed vault architecture, tailored to varying risk levels.
D2 Finance aims to harness its existing and burgeoning institutional fund contacts to facilitate on-chain asset exposure through institutional grade infrastructure and active quant trading.
Join the D2 Finance community
Disclaimers:
Performance Disclaimer:
The indicative ROI/APY shown in d2.finance front-end is not guaranteed and is subject to market risk. The strategies are not risk-free, and some epochs may result in a negative return. Further details and protocol incentives can be found in https://gitbook.d2.finance/. While the information contained within the website is periodically updated, no guarantee is given that the information provided in the website is correct, complete, and current.
Changes and Updates
Please note that the features, terms, and conditions may change accordingly market dynamics, but will always have heads up before the withdrawal window. Stay informed by reviewing our documentation regularly.
Sophistication Requirement
Participation in our strategies is intended for individuals who meet certain financial criteria that classify them as high net worth or sophisticated investors. The definition of a high net worth or sophisticated investor varies by jurisdiction, but generally includes individuals with significant experience in financial and business matters, making them capable of evaluating the merits and risks of prospective investments. Investing in advanced financial strategies carries inherent risks, including the potential loss of capital. Prospective investors should be fully aware of these risks and are advised to conduct thorough due diligence.
