Important updates for the community
Good day, X-Force.
We have very important updates to share. It is of utmost importance for all our community members to know these updates and we decided to make it as detailed as possible. Should you have any questions, please do not hesitate to reach out.
There are 3 major updates:
- Bridge token
- XFIT staking
- High gas fee issue
XFAI — The bridge token
Protecting the long-term interests of the community and the project as a whole is the highest priority to the Xfai team. During this year, we have realized that the interests of whales and the interest of the community as a whole do not always align. The community is in it for the long term, while whales often tend to be inclined towards short-term games. When the Xfai DEX comes out during Q1 of 2022, the initial bootstrapping phase will be crucial. Having a whale suddenly dump at that stage could damage the formation of network effects that we are trying to achieve for the DEX. Of course, none of us wants that.
This is why we have decided to force the realignment of incentives. The bridge token of the Xfai DEX will be a one-sided wrapped token of XFIT.
What this means:
The bridge token of the DEX, which will be called XFAI, can only be minted by burning the equivalent amount of XFIT and staking the minted amount into the DEX’s staking contract. That way when the DEX is launched on the mainnet, short-term players cannot immediately dump their bridge token and therefore cannot drain out the DEX. This way the bootstrapping phase can successfully occur, allowing for the long-term success of the DEX.
XFIT holders — A new kind of staking
We want the supporters of Xfai to benefit as much as possible from the DEX. We also want the community to have a reason to move their current liquidity away from uniswap, which is an important part of the bootstrapping phase of the DEX. This is why we have decided on community ownership of Xfai’s DEX. Anyone who converts their XFIT into XFAI, by staking into the DEXs staking contract, will be issued a special type of LP token.
The amount of LP tokens one receives, do not only depend on the amount of XFIT staked, but also at the time of staking. Similarly to how bonding curves work. That way early stakers will get more rewarded than latecomers. Any community member with this special LP token, will continuously receive XFAI rewards from the DEX, without impermanent loss. XFIT stakers will have a share of the DEXs deep bridge token pool, i.e. the slippage optimization contract (SOC).
For anyone who needs a refresher on Xfai’s burning mechanism, we have a blog post about it. Since every swap on the DEX will increase the amount of XFAI tokens inside the SOC, XFIT stakers will receive rewards whenever there’s a swap on the DEX. The rewards are redeemable through the LP token and as long as users keep their XFAI staked, they receive XFAI rewards indefinitely. If someone decides to unstake their minted XFAI tokens from the staking contract, their special staking LP tokens get redeemed as well, and therefore that user won’t receive continuous rewards anymore. This way we hope to incentivize the community to keep their amount staked for as long as possible. The XFAI burning mechanism converges all XFAI reserves in all pools over time to zero, effectively creating extreme supply constraints and therefore price upward pressure. Bridge token holders, by having access to the XFAI deep pool have seigniorage, ie “first dibs” on this price movement.
The gas fee issue
We have spent quite some time trying to figure out why the gas fees for farming and harvesting have suddenly risen to unreasonable amounts since last week. We have good news and bad news about it. The bad news: Users will not be able to farm or harvest until the DEX staking contract is online. We have started working on it right away. The good news: The issue is fixable and the new staking UI will give users the option to either harvest what they have (their Uniswap LP tokens), or stake into the DEX.
Let’s elaborate on the issue in more detail: For the first part of the week, we were convinced that it is a front-end related issue, as we had a similar issue at the beginning of Xfai’s farming event. It turned out that it is actually a very sneaky smart contract issue this time around. A user last week harvested a very large amount of XFIT tokens from the farming contract. This is usually not a problem. But the farming contract has had a high drip rate for quite a long time (65 xfit per block instead of 30, which was done to incentivize farmers despite the price drop). This high drip-rate has caused the Xfai farming contract to end up with fewer XFIT reserves than we had planned. This is usually also not a problem, as we at Xfai can fill that reserve again externally. Once the user harvested their XFIT though, the contract’s reserves went to zero. Anyone familiar with computer science is probably already seeing where we’re going.
The number zero can easily mess up calculations. Once the reserve went to zero, it messed up some contract states, “corrupting” in the process the farming and harvesting methods of the contract. The good news is that we have been paranoid enough back then to code another method named “emergencyWithdraw”, which allows for the withdrawal of LP tokens within the farming contract, without the dependence of any contract state.
We are now working on the XFIT staking contract and UI that will enable users to either harvest their liquidity + accumulated rewards or stake their liquidity + accumulated rewards into Xfai’s DEX staking contract. We apologize to everyone in the community for this inconvenience. We will delay the DEX testnet launch a bit, to prioritize the staking UI and staking smart contract. That way users can have access again to their farming liquidity, as well as optionally participate in the DEX staking event. The long-term interests of the community are and will remain our top priority.
We hope everyone would read the article as it is an important step towards the launch of our DEX. We will answer your questions with full transparency. Thank you.
XFai develops tooling for the DeFi space, graphing it to build game-changing products. The XFai DEX is set to invite mid and small-cap tokens to start earning APY on their token holdings. We are aiming to become industry-first in providing a more efficient, transparent, and fair way for everyone to get involved at an early stage. The LGE for XFai’s native token, XFIT, was launched on 16th April 2021. We invite everyone to join the DeFi revolution, spearheaded by XFai.