Maximus Tokenomics
As the launch time approaches we know everyone is very excited. In this blog post, we will take a closer look at the much-anticipated tokenomics and provide detailed answers for frequently asked questions like token production, buyback mechanisms, and more.
MAXI Token
Symbol: MAXI
Chain: Avalanche
Decimals: 18
Max Supply: Unlimited
Floating Rate Emission
As we mentioned in a previous blog post, Maximus will be the first to use an FRE token production model on the Avalanche ecosystem. We can take Avalanche’s block production mechanism as an example. Unlike other networks, on Avalanche the block production speed can vary depending on usage. MAXI token’s production method is designed using a similar approach.
But how?
MAXI token doesn’t have a max supply or a constant production rate but for every 1 AVAX earned from performance fees, 10 MAXI tokens will be minted and will be given to users who are charged with performance fees. So to put it simply the 30% performance fee will be given back to you as MAXI tokens.
So in reality you will not actually be charged a fee.
Buyback Mechanism
If the token price goes below 1/10 AVAX price then the system will start to buyback MAXI tokens from the market with the performance fees acquired and send it to the user along with a small amount of additional MAXI tokens that have been minted.
Once the price is balanced to 1/10 of the current price of AVAX at that time the system will switch back to normal mode and continue minting MAXI tokens as described above.
Chainlink price oracle integration will allow us to implement this style of buyback mechanism.
An example
Let’s take an example to explain how Maximus works in an easier way.
Assuming a user has $100k AVAX-ETH liquidity on one of the Maximus compounders and the pool has a %100 APR rate; we can say that the user’s annual earnings would be $100k and the user would earn bout $8k a month. And after 1 month of compounding the user’s raw earnings will be around $11k in LP tokens. Once the user withdrawals their liquidity, the 30% performance fee will be deducted and the MAXI token will be given in return. And the user will have $107,700 in AVAX-ETH LP tokens and $3,300 in MAXI tokens. Basically, the user will have no loss due to the performance fee.
So how many MAXI will be distributed in return for $3300? Will it mint or buy from the market? It depends on actual price data. Assuming AVAX price is $100, with 1/10 proportioning MAXI price should be $10. If for instance, the MAXI price is $9 then the system will buy 366 MAXI tokens from the market in return for $3300 and send them to the user. If the MAXI price was $11 the system would have directly minted 300 MAXI to give to the user.
MAXI token is designed to keep its price proportional to the AVAX price. But it’s important to bear in mind that MAXI is not a stable token and price fluctuation is still possible. Although the token is designed to keep its price at a certain point, it may take some time to balance the price in the case of high volatility.
Presale (IFO)
Around 1.2M MAXI tokens will be available for presale on Lydia Finance’s IFO platform, one of the fairest launchpads on the Avalanche ecosystem. A significant part of the funds to be collected from the presale will be used to provide liquidity to the MAXI-AVAX pair on Lydia and to the avax pool on Maximus. This way users who participate in the presale will earn back a portion of the investment they made when they deposit the MAXI tokens they buy into the avax pool.
All presale details will be published with another blog post soon.
Development Fee
%15 of MAXI tokens are allocated for development. There will be no pre-mine for devs and tokens will be locked for the first 2 months.
All amounts/prices above are for explanatory purposes only. They are subject to change.
