What is the role of JXN coins?
by Maryna Trifonova, Head of Content at Jax.Network
The Jax.Network blockchain houses two native digital currencies — JAX, a stablecoin, and JXN, an asset coin. Let’s find out how JXN coins can be used and how you can profit from them.
Main functions
JXN is a coin issued on the beacon chain of our blockchain. A new block is created approximately every 10 minutes. 20 JXN coins are issued per block as a reward to miners. According to our protocol, miners can choose which coin they would like to get JAX or JXN. Please note that JXN can be received only in the process of merge-mining Jax.Network with Bitcoin. To learn more about benefits for miners, please follow this link. But why would anyone want to mine JXN? Our asset coin has a great importance, as it represents the value of the entire network. Besides, it can be used:
- for DAO registrations;
- for exchange agent registrations;
- for Layer-2 dApp registrations;
- for fraud proofs etc.;
- for collateral custodians for Layer-2 governance DAC;
- to pay for the security of Jax.Network by incentivizing Bitcoin miners to merge-mine Jax.Network;
- as gas fees for exchange agent listing transactions and other critical transactions;
- to incentivize miners to defend the beacon chain that holds the shard registry;
- to incentivize miners to defend the Bitcoin network when the BTC reward drops to 0;
- to reflect the value of the transactional payments ecosystem of Jax.Network;
- if the shards have a transactional value that is also reflected in the JXN price, then some network effects have to be considered as well, i.e. transactional volumes of stablecoins;
- as an entry point for the DeFi ecosystem on Bitcoin. Together with Stacks, JAX can be used as the go-to decentralized stablecoin for DeFi.
Liquidity provision
While other use cases seem quite clear, we would like to pay your attention to the use of JXN for exchange agent registrations. Exchange agents (EAs) are the liquidity providers for cross-shard transactions. They are at the heart of our scaling solution and work like a DEX for liquidity provisions and smooth decentralized payments. In order to provide smooth cross-shard transactions, since the shards are independent from each other, the network has a set of intermediaries, who can become the nodes and provide enough liquidity across different shards.
How does it work? Each EA needs to register on the beacon chain and advertise his/her fee. For instance, EA 15 has 10,000 JAX coins on shard 30. He/she agrees that these coins can be swapped with any other shards in exchange for a fee retributed in JAX. This amount of liquidity and a fee are registered on a listing registry, available through the beacon chain. Each time this registry is changed, he/she needs to update it and, again, pay a transaction fee on the beacon chain in JXN. So, the fees collected on shards must be higher than the fees paid on the beacon chain for the EA to make a profit.
Conclusion
Like any other cryptocurrency, JXN has its own utility, not to mention the speculative motive. You can find many applications for the coin, however, the most profitable would be liquidity provision. Learn more about it in this article.
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