Sunsetting xToken
After 3+ years building in DeFi, we’re disappointed to say that we’ve made the decision to sunset xToken. Over the last few years, we worked with some of the top projects in the space, served thousands of users across four chains, and generated hundreds of millions of dollars in transaction volume. Not for lack of trying, we no longer have the resources to fund active development.
I started working on xToken in February 2020 after receiving a $10k grant from Synthetix to build a wrapped SNX staking strategy. We launched in July 2020 at the height of DeFi Summer as one of the first yield aggregators and the first project to build ERC20 staking wrappers for DeFi tokens (“x”Tokens). Over the next year and a half, we developed 10 staking wrappers for different protocols and branched out to Uniswap V3 liquidity strategies as well. At our peak, we had nine figures of TVL and an 11 member team across six countries.
As it became clear later in 2021 that we were in a DeFi bear market, we were faced with the reality that our business model wouldn’t scale. We were investing significant development time to build custom strategies for each token we wrapped; we were paying heavy gas fees to manage each strategy; and finally, we were forced to allocate considerable dev time towards maintenance, as the DeFi protocols we were building on top of often made breaking changes to their contracts. All this was happening as market caps and trading volumes — the revenue opportunity— were contracting.
But we saw an opportunity. Over the previous year, we had been incentivizing most of our ERC20 strategies as a marketing tool and as a way to build secondary liquidity. Several projects had reached out to us about helping them run liquidity mining programs on Uniswap V3, which was fairly new at the time and far more complex than V2. We realized that we could productize some of our internal liquidity mining infrastructure so that anyone could permissionlessly deploy a Uni V3 liquidity mining program in just a few minutes.
So, in December 2021, we announced our pivot from xToken Market (asset management) to xToken Terminal (permissionless infrastructure). Liquidity mining (LM) is pervasive in the space and we noticed that projects were often customizing and deploying their own contracts and developing their own interfaces. Projects were allocating weeks of developer time to something we could make available to them in mere minutes.
Terminal allows LM sponsors to choose the token pair to incentivize, rewards token(s) to pay out, liquidity range, and rewards vesting periods, among other features. Our UI gives sponsors a ready-made interface to send out to their communities when their program launches. Terminal remains the only platform (to our knowledge) for permissionless, full-service liquidity mining program deployment and participation.
It’s really a great product — don’t take our word for it…the many projects to deploy with us will tell you so — and it should find another home. Please get in contact if you’d like to discuss a pass-over. The contracts will live on Ethereum, Arbitrum, Optimism and Polygon forever, but we’ll only be maintaining the frontend for a few more months.
While we built some great products, we of course had our fair share of challenges as well. We got hacked in 2021. Twice. They were really painful experiences for our users, our community and our team. It’s hard to describe the feeling of failing your users and investors and not having a path to fully compensate them. We learned a lot from those experiences and I think that the state of DeFi security overall is improving. Hopefully we get to a place soon where hacks are a rare occurrence.
Finally, I’d like to shout out some of the fine community members who stuck with us to the end. We had many smart and interesting folks engage with us in Discord and on Twitter over the years — more than we can name — but I wanted to name some of the last ones standing.
Wicky, Teezer, Gunboats, Modz, Maverick, remche, Mr. Racks, RegexPhilbin and others. Thank you for hanging out and supporting us.
I’d also like to thank some of 20+ contributors over the years who helped make the project what it was. To Eswara and Rory — our first hires. To Ben and Chad — our community and growth team. To Ivan, Cristian, Chris and Nora who were instrumental in building Terminal. To Marko — who did all our design work for three years. To the many others who contributed in some form, thank you.
-MJC
______________________________________
Housekeeping Notes
We’ll be keeping the Terminal, Market and Cafe frontends online for a few months but please try to redeem your assets when you can.
