What is xETH?xETH or Xplosive Eth is a price reactive, deflationary token that:
- Rewards buyers through positive rebases pegged to a baseline of 0.01 ETH
- Rewards holders through staking rewards from the pool (see next point)
- Punishes sellers through transaction “taxes” at a rate of 3% of the transaction amount. 2% is burned and 1% is sent to a pool that’s distributed to the stakers.
xETH combines the best part of elastic supply tokens such as Ampleforth but without the negative rebases (you never lose tokens after a rebase). It also borrows from deflationary tokens (BOMB, XAMP, TOB, BOA, COM, etc) by burning 1% of each transaction, thereby reducing the total supply overtime and increasing the value of each token.
Finally, it offers staking dividends to incentive long term holding rather than short term buying and selling.
Combine these 3 elements together and you get a token that is designed to be explosive in growth, hence the name Xplosive ETH.
xETH Economics:1. Rewards buyers through positive rebases pegged to a baseline of 0.01 ETHxETH takes the best parts of elastic supply tokens such as Ampleforth (AMPL) and Softlink (SLINK) while leaving out what most people dislike: negative rebases.
In case you’re unfamiliar with the concept, Elastic supply tokens are pegged to some set value or moving target. In the case of AMPL, the set value or “baseline” is $1. For SLINK, it’s the current price of 1 LINK (adjusted from 0.1 LINK).
Then, everyday at the same time, the amount of tokens everyone holds either increases or decreases based on how far off the token price is from the pegged price.
Rebase tokens can be incredibly attractive to buyers because you can potentially get more tokens automatically without doing anything. For instance, if you bought 100 AMPL tokens today, and the price is above the baseline of $1, you end up with say 125 tokens after the rebase.
And because you see 25 more tokens in your wallet, you might start telling your friends. They buy in and the price moves up to $1.25. The next day, there’s another positive rebase and you end up another 25 more tokens all of which are worth $1.5 now. This can drive demand higher and higher and explosively multiply the market cap in just a few days. AMPL, for instance, went from an $85 million market cap to $701 million market cap (8.24x) in under 2 weeks.
But there has to be some sort of downside right?Well, here’s the kicker: These elastic supply tokens also have negative rebases or “debases” where you can potentially lose tokens. Let’s say there was a major sell-off with AMPL and the price is now below the baseline of $1. Let’s say you buy 100 tokens and a day later, you’re left with only 80.
Now, what most people fail to understand is that since everyone loses tokens, your tokens still hold the same value at the end of the day. In other words your holdings as a percentage of the market cap is still the same as before the negative rebase.
However, most people just see their token holdings go down (sometimes along with the price action) and they panic sell. This can lead to a vicious cycle of selling that can be difficult to recover from.
A perfect example of this “apocalyptic sell-off” scenario played out in the AMPL fork token, Rebased ($REB). REB was pegged to $1 yet was never able to stay above $1 long enough for it to have a positive rebase. As a result, the negative rebases created a cycle of selling that’s now impossible to recover from.
Keeping those points in mind, here’s why xETH is superior:First of all, xETH is pegged to the price of Etherum with the baseline rate of 0.01 ETH. Meaning ETH is $440, then the baseline is set to $4.4 (0.01 X $440). Pretty straightforward right?
Then, every day at the same time, xETH’s smart contract checks the price of xETH against the price of 0.01 ETH. If xETH is above $4.4, that’s considered a positive rebase and you get more xETH tokens automatically distributed into your wallet.
Now, the positive rebase is not a new concept but what makes xETH unique is that there are no negative rebases. If xETH’s price happens to be below the price of 0.01 ETH, then nothing happens. No one loses tokens. This was designed to be a solution to the apocalyptic sell-offs other rebase tokens tend to have issues with.
Also the Uniswap liquidity pool address will be unaffected from the rebases. This is to keep the trading price constant during a rebase as to not scare holders into panic selling. So to incentivize liquidity providers, xETH will offer liquidity mining rewards to those who stake their xETH/ETH pool tokens.
Now, the question becomes: how can we support an ecosystem with only positive rebases and no negative rebases?
The answer lies in a unique smart-contract feature employed by some of the most successful tokens currently listed: a deflationary supply that can be adjusted based on price targets.
2. xETH punishes sellers through transactional “taxes” at a starting rate of 3% of the transaction amount. 2% is burned and 1% is sent to a pool that’s distributed to the stakers
The concept of a deflationary supply is designed to increase an assets value over time, rather than decrease it through traditional inflationary means.
BOMB token was one of the first projects to have a deflationary supply built into the tokenomics. Then, there was XAMP, TOB, and BOA developed by the notorious Bill Drummond which built deflationary mechanics into experimental tokenized games.
With deflationary tokens, usually a percentage of each transaction is burned (sent to the standard Ethereum burn address), so the total supply decreases over time. With many of these tokens, as long as you hold and avoid selling or transferring your tokens, you gain a bigger % of the market cap over time.
With xETH, every transaction is taxed at a starting rate of 3%. 2% is burned and the other 1% is sent to a pool that is distributed to stakers (more on that in a bit). This deflationary tax may be increased even more if the price stalls for several days below the peg price.
This deflationary mechanism is designed to drive buying pressure and stabilize the price to 0.01 ETH in the long-term.
3. xETH Rewards holders through staking rewards from the pool
To incentivize long-term holding, xETH plans to implement staking in its ecosystem. After the initial launch, the xETH staking dAPP will be developed to reward stakers with tokens from the tax pool.
If you choose to stake your xETH, you will receive xETH in your wallet everyday proportional to the amount of your stake in the pool
Token Distribution Breakdown:Total supply: 250,000 xETH
Listing Price: 1 ETH = 100 xETH
Exact pre-sale information and details will be announced in the next article.
Pre-sale: 33,500 xETH (13.5%)
The presale will be conducted in two rounds and will have a hard cap of 335 ETH. Any unsold tokens will be burned. xETH will be listed on Uniswap as soon as the presale is over.
Initial UniSwap Liquidity: 25,000 xETH (10%)
xETH will have about $80,500 USD of liquidity in the pool. There is some room left in case additional liquidity needs to be added in the future. Any excess xETH will be used for marketing and promotions.
Development: 75,000 xETH (30%)
Since xETH has a unique token mechanism and isn’t a basic ERC-20 clone (like many of the new “projects” out there), the team has onboarded a full-time web developer, designer and solidity developer who have agreed to take their compensation in xETH tokens, locked and vested over time.
Marketing and Audits: 39,000 xETH (15.5%)
The team has established connections and partnerships with other crypto projects as well as influencers in the space.
Additionally, a portion of these funds will be utilized for a “de-facto” smart contract audits to ensure the staking dAPP and rebase functions 100% functioning as they should.
Staking: 37,500 xETH (15%)
These tokens will be used as rewards for staking. Additional xETH taxed from transactions will also be added to this pool.
Team: 25,000 xETH locked up for 3 months (10%)
Reserve: 15,000 xETH (6%)
6% of xETH tokens will be kept in reserve for emergency use cases deemed best for the community. The community must agree on the usage for these tokens.
Upcoming Roadmap
Note: This roadmap is an estimated timeline of deliverables by the team. Exact dates have not been set because it’s impossible to plan that far ahead in the future, especially with development. That said, the team plans to underpromise and over deliver as much as possible.
Late August — Create initial token-economic research & frame work
September 2, 2020 — Project announced
September 11, 2020 — Presale
September 11, 2020 — Uniswap exchange listing (after presale finishes)
September 18 — Website release
Early October — Start staking dAPP development
Stay tuned for our next post where we reveal more details about our upcoming presale details!
Join the official xETH Telegram for more details about the upcoming token sale:
https://t.me/Xplosive_Ethereum
