Supercharging SX Tokenomics
Ten innovative initiatives to propel SX tokenomics
This article presents a suite of ten independent proposals and product features designed to significantly enhance the tokenomics of the SX Network. Although they are primarily aimed at SX, most of these initiatives are also broadly applicable to other crypto networks. Collectively, these proposals and features aim to:
- 💰 Increase the staking yield, and make SX a “real” yielding token
- 🎡 Apply consistent daily buying pressure to SX
- ✂️ Decrease yearly SX inflation by two-thirds
- 🥩 Shorten the staking period cooldown by 65%
- 🌊 Enhance liquidity for SX on its primary DEX
- 🔥 Establish a new revenue stream estimated to burn approximately 1 million SX per annum
- 🦈 Integrate SX trading functionality into the SX Bet platform
- 📊 Boost transparency concerning the SX token
This article is intended to gauge the level of interest and enthusiasm of these potential initiatives, enabling us to prioritize effectively and reconsider aspects as needed.
Introduction
I’m thrilled to share a package of ten exciting initiatives to fundamentally transform the tokenomics, security, and sustainability of SX Network. The goal of these initiatives is to create a thriving SX ecosystem.
Tokenomics is about creating a balanced economy within a blockchain ecosystem. It’s a crucial aspect for the success of a project because it helps maintain a healthy ecosystem, ensures fair distribution and use of tokens, and incentivizes user behavior that contributes to the platform’s long-term success
Thanks to community feedback and a thorough analysis of SX Network, we believe this set of initiatives will boost demand, reduce supply, and, ultimately, strengthen the tokenomics of the SX Network ecosystem.
1. 💰Double Staking Yield and Activate Real Yield
Over the last twelve months, SX Network generated ~$1.6M in protocol fees. The first change is to increase protocol fee sharing from 0% to 100%, meaning that all protocol fees will now be re-directed to SX stakers. This will effectively double the staking yield at current price levels to ~13.5%.
Additionally, this yield will now be paid out in USDC and ETH instead of locked up SX. This will turn SX Network into one of very few projects with a “real yield”, which is far more valuable to stakers than inflationary token yield.
2. 🎡 SX Compounder to Boost Demand for SX
The SX Compounder is a product feature built into the SX staking process that automatically converts all earned USDC and ETH staking yield into SX tokens by purchasing SX directly on SharkSwap and auto-staking it. The SX Compounder is a product that makes it easy for committed long-term stakers to continually compound and increase their staked SX position.
It is an optional feature that SX stakers can choose to opt-out of if they simply want to accumulate real yield (USDC or ETH), instead of adding to their staked SX balance. From talking to major SX stakers over the last few weeks, we think over 75% of total staked SX will opt-in to this program. At current protocol revenue and SX price levels, that means the SX Compounder would be purchasing ~30,000 SX on the market and auto-staking it each day.
3. ✂️ Eliminating 100% of Staking SX Inflation
There is currently 23,370 new SX being issued to SX stakers every day. Post-merge, SX stakers will be receiving USDC and ETH protocol fees, negating the need for them to receive inflationary SX rewards. The third proposal aims to eliminate this daily new SX issuance. This should reduce the amount of new SX issued each year to stakers by ~8,000,000 per year.
This will drastically limit the supply of new SX being issued, making the SX that people hold themselves even more scarce. With this change, the only new SX tokens being issued out of the community fund will be coming from bet mining, which leads into the next proposal…
4. ⛏️ Reducing SX Issuance from Bet Mining by 33%
This proposal is to reduce the maximum new SX Bet Mining rewards by 33% from 150,000 SX per week to 100,000 SX. This reduces the number of SX tokens being issued each year through bet mining by 2,600,000. Combined with the previous proposal, this represents a ~10.6m SX per year decrease in new SX being issued each year. Yearly SX inflation will fall 67% from ~15.8m/year to 5.2m/year.
By adjusting the rate at which new tokens are issued through bet mining, the flow of new tokens into the market will controlled tightly, further supporting healthy and sustainable tokenomics. This proposal represents a fine balancing act, ensuring the value of SX remains robust while still incentivizing user engagement through Bet Mining.
5. 🥩 Lower Staking Cooldown period by 50–65%
I’m also proposing we lower the staking period to either 21 days or 30 days, a 65% or 50% reduction from the current 60-day period. This brings SX in line with other major Proof-of-Stake protocols and removes a key concern of many new entrants into the SX ecosystem.
This change will enable significantly more flexibility in managing staked SX positions. With a shorter staking period, SX stakers can respond more quickly to market changes and capitalize on emerging opportunities, thereby lowering the risk of staking SX.
6. 🌊 Boosting Liquidity with the Community Fund
In addition to the strategies outlined above, another potential initiative that could have a profound impact on SX’s liquidity would be to use the Community Fund to buy SX on SharkSwap and provide liquidity there. The proposal is simple yet effective: take $500,000 USDC from the Community Fund to buy SX tokens directly from the open market on SharkSwap and lock them into a liquidity pool (LP) on SharkSwap.
In practice, this means buying $250,000 of SX and then combining it with the remaining $250,000 of USDC for a total addition of $500,000 new liquidity to the SX-USDC pair on SharkSwap.
Liquidity is the lifeblood of any token ecosystem. High liquidity reduces price volatility, making the market more stable and attractive to both newcomers and seasoned traders alike. This proposal doesn’t just boost liquidity; it also creates a positive feedback loop. More liquidity attracts more users, who in turn provide more liquidity, and so on. It’s a win-win situation that can potentially help spark a liquidity flywheel effect.
7. 🔥 API SX Burn Charge
To deal with spam attacks and API abuse, we may need to introduce some sort of provably expensive access to the SX Bet API. One design for this could be a three-tiered Free, Basic and Pro tier, costing ~1,000 SX/month and ~5,000 SX/month respectively. These new tiers provide optimal access to different needs, while also generating consistent demand for SX tokens as all API fees will be paid in SX.
The rate limits on both API tiers could now also be increased considerably for the Basic and Pro tiers as the potential for abuse by malicious attackers is mitigated. The SX tokens collected from these API fees would be burned, which will reduce the total SX supply and further increase scarcity. For context, there are 45 users currently accessing the SX Bet API. Assuming 25% access the Pro tier and 35% access the Basic tier, this feature would earn and burn ~900,000 SX per year. Alternative designs could enable market makers to reclaim their burnt SX once they provably revoke API access or enable the protocol to slash market makers’ staked SX in case of malicious abuse (in lieu of payment).
8.🦈 Add SX Trading Functionality to SX Bet
SX could add trading functionality into SX Bet directly, creating a one-stop platform where users can not only place their bets but also trade SX tokens, all in one seamless interface.
Moreover, by bringing SX trading in-house, we can provide you with real-time data and updates, making your trading experience more dynamic and responsive.
9.🌉 Increase Reach with 2-Way SX Token Bridging
In our ongoing mission to enhance the functionality and reach of the SX token we also plan to launch the ability to bridge SX tokens off the SX Network onto other chains. This feature will expand the utility and accessibility of SX tokens.
By extending the SX token to other blockchain networks, SX can significantly increase its potential use cases and exposure. Furthermore, this feature will enable SX to launch liquidity mining campaigns on other EVM chains. These campaigns can incentivize a wide range of participants to provide liquidity for SX tokens, thereby promoting stability and reducing price slippage.
10. 📊 Boost Transparency with SX Token Dashboard
To increase transparency and inform the community even more, the next change would be to launch an SX Token Dashboard. This innovative tool will be designed to provide SX holders with a clear, comprehensive view of key token metrics. The dashboard, to be featured on our analytics page, will offer real-time data on the price, liquidity, and supply breakdown of the SX token.
Want to know where all the SX tokens are? The dashboard will provide a thorough breakdown, giving you a complete picture of the SX token distribution. This dashboard isn’t just about providing information — it’s about fostering transparency, empowering holders to navigate the SX Network ecosystem with confidence.
Conclusion
These initiatives are designed to increase the strength of the SX Network security model by improving the SX token economic design. By increasing demand, reducing supply, and making the ecosystem more adaptable and rewarding, SX Network will become more resilient and secure.
As always, thank you to the community for its ongoing support and belief in the SX vision. The SX Network community is building not only a better sports betting platform, but leading the way in blockchain development.
We’ve got some truly revolutionary product features coming down the pipeline that will make SX Bet the objectively best betting platform in the world. Stay tuned for more.
About SX Network
SX Network combines smart contracts with an on-chain treasury and prediction market protocol. SX Network is perfect for developers with EVM-compatibility, low-cost transactions, and PoS-based consensus. SX.Bet is the #1 prediction market dapp by betting volume across all chains. All bets are peer-to-peer and settled on-chain. SX Bet has processed +$335,000,000 in betting volume.
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