MEX Trading Pairs

[przemek]

MEX is utility token of xExchange, therefore it should be used as utility token and flood xExchange liquidity pools.
There should be more trading pairs with MEX, in my opinion all tokens that are listed (perhaps except experimental ones) should have trading pair on LP level with major ESDT’s.
For incentive, there could be Boost Bonus (BB) for locking MEX prior adding liquidity.

That way, there would be a demand for MEX as most people would migrate to get better energy score. BB would be calculated based on overall liquidity level. The smaller liquidity, the higher boost. As more people would join the pool with their long term savings, BB would gradually come down (as expected).

Higher energy score, higher metabonding rewards. It would be great in same time to welcome new tokens in metabonding programme. I suggest to ask smaller projects to contribute, there are lots of good ESDT’s in here, especially from projects that are active on regular basis for a long enough period of time (+1 year) to be not classed as “slow rug” I would name few, that are standing still and grinding hard everyday and are proud to be built on MultiversX.

So, for now we are having MEX listed with pairs with major tokens. Lots of LPs, the ones with smaller liquidity (least popular) are very attractive now with BB good enough for couple grand position to make positive impact on metabonding rewards.
On top of that we are approaching 50 tokens in total listed on Metabonding Programme
xExhange would be alive again with strong incentive program attracting new investors from other
More pairs would bring more traders contributing to bigger daily volumes.
Farmers would have more strategies an incentive to diversify, as balanced position across multiple LPs would yield better metabonding results.

The finest piece of art would be to balance energy boosts to ensure long lasting incentive. It would be great to perform some simulations or DOE’s to ensure sustainable attractive value proposition for farmers. Unlocking metabonding doors to projects that support the chain for a while now and are barely seen, should do the trick

Oh, and lastly, RugPull Safety Mechanism could be achieved by integrating Pulsar Money Vaults to lock LP tokens by pool owners for min of 2 years (same as duration of metabonding period). With this idea we could require from projects that apply for metabonding to provide at least of 1k of initial liquidity paired only with MEX and auto lock it for 2 years. Same lock requirement would be applicable for all farmers, that way people would be careful with strategies and would always be some smaller pools with high BB. That way on the end, xExchange liquidity would be (most likely) evenly distributed across all MEX paired liquidity pools.

Please help smaller projects and rethink metabonding and liquidity strategy for xExhange. It would be win/win for many, especially for the whole ecosystem.

#HODL

[erd1hkche_a4sk2jn3e]

Great insights for the next developments of xExchange.
Regarding the liquidity locking, xExchange already has this implemented for the creation of new pairs. In order for a new pair to be enabled for swaps, the pair creator has to lock a minimum amount of liquidity first(500$ worth in case of EGLD pairs), then with that locking token he will be able to start the trading on that pair

[lucaswillems]

Really interesting thoughts!

The reason why MEX/XMEX is not paired with other tokens is for security reasons. More details here: https://twitter.com/lcswillems/status/1681237892331368454

We are researching alternative designs to make it work with more tokens. This is hard though.

I am just moving this topic in General Discussions . To publish in xEIP Drafts , the post should be an xEIP draft and follow the xEIP template.

[xfoudres]

A very interesting point @lcswillems, it’s a subject I’ve been thinking a lot about with a friend that will recognize itself, the possibility of pairing xMEX with EGLD in LP pool has both positive and negative effects in my opinion. It would be very interesting to understand what the motivation was for making this pairing possible, unlike the veCRV or veASH model where it’s impossible.

On another hand, it should be ok imo to let other project build MEX<>ESDT pool only, without the possibility to add xMEX in them !

[lucaswillems]

Very curious about the negative effect of XMEX-EGLD. Do you think you could tell us a bit more?

Yes, we could only allow MEX <> ESDT, but this complexify user experience. Sometimes you can put your XMEX, sometimes not. And if people can’t put their XMEX, the likelyhood of them providing liquidity will be way lower.

[xfoudres]

Ok let’s dive into it @lcswillems :

Let’s imagine that the pool is perfectly balanced between those who have contributed liquidity in MEX and xMEX in the EGLD pool.

If the price goes up or down, being able to provide liquidity in xMEX bring with the impermanent gain/loss, also an impermanent lock/unlock.

While impermanent lock can be interesting, as each loss taken by LP provider can reduce the supply available. The problem is that there it’s asymetric, because a purchase in the pool always unlocks a share of the xMEX (depending of the pool distribution), whereas a sale only locks MEX if the impermanent becomes effective by withdrawing its liquidity.

Structurally, the xMEX is much easier to unlock than to lock through this effect. In the long term, I think it’s fair to say that many more xMEX will be unlocked than locked through this mecanism. This also reduces MEX’s upside potential, as each purchase increases it’s circulating supply.

And more than that, it reduces the impact of the lock by X% depending on the LP’s MEX/xMEX disbution. The usefulness of MEX is above all to be locked in order to have governance power, but above all to have better APRs on farms.

Any new user who buys MEX for locking them to obtains energy benefice and decides to put them in LP, will make part of his xMEX available to other buyers. We therefore have MEXs that are locked by all users several times.

From what I understand, there are around 1.123 trillion xMEX in the pool for 0.824 trillion MEX. So 57%. So for every new token lock resulting from a purchase from the pool, only 43% are actually new token locks.

Same problem for the fees, they burn a part of the xMEX.

And this distribution should increase over time in favor of xMEX as all inflation is released in xMEX, making the MEX locks buyed from the pool less and less significant.

Here’s my opinion on the possibility of pairing xMEX and EGLD in LP, but maybe I’m wrong somewhere!

[lucaswillems]

Great post @xfoudres! After reading several times, I think I get what you are saying. Your point is:

In the current situation, if somebody creates EGLD-XMEX LP and later withdraws, he will either get EGLD + XMEX in case the price of MEX went up, or EGLD + XMEX + MEX in case it went down.

Did I get it right?

What do you think about creating a proper Agora topic for this subject? I think it is an interesting topic that is way beyond the current topic of just pairing with MEX.

In this proper topic, you could first explain the behavior you question (I guess receiving MEX when breaking EGLD-XMEX LP) and maybe evaluate the downsides of this behavior?

Thanks as always for your great contributions!

[joaquim]

Great explanation by @xfoudres

I’ll add my grain of salt by looking at it differently.

MEX gets locked to have energy, allowing you to boost your farming positions, receive metabonding rewards, participate in xLaunchpad and have a say in the governance of xExchange.

Meanwhile, MEX has no utility, so you either lock it or sell it. You could bring liquidity with it, but your position wouldn’t be boosted, and you would miss out on the other rewards and perks.

As Foudres was explaining, when a user decides to buy MEX with EGLD, he automatically gets unlocked MEX even if the pool contains a majority of xMEX.

For the sake of simplicity, all users who buy MEX decide to lock it and add it to the LP. It keeps filling the pool with locked XMEX, making it harder for the token’s price to perform. In reality, the token’s price isn’t really the price of MEX but rather a blend of xMEX and MEX.

By only enabling LPs with MEX, the unlocked token has a utility; it can be used to provide liquidity and farm with boosted rewards by locked XMEX.

This would, in turn, create a balance between MEX and XMEX, as some might decide to unlock XMEX (or buy MEX) to get a share of the APR.

Lastly, both the purchase and sale of the token would only affect the unlocked supply, improving the potential upside of the price.

In conclusion:

xMEX utility (aka Energy):

• Boosted Rewards
• Metabonding
• xLaunchpad
• Governance

MEX utility:

• Liquidity Providing with higher APR.

Would love to hear your thoughts @lucaswillems

[lucaswillems]

@joaquim You are saying that if we only allowed ESDT-MEX and not ESDT-XMEX the price of MEX would be higher?

[joaquim]

What I’m, at least trying, to say is:

• If MEX had a utility there would be less selling pressure as the user has more options than to lock or sell.
• The potential upside of the token would be higher since there isn’t added liquidity each time someone buys MEX and locks it.
• Since the balance right now is of MEX&XMEX/EGLD you could expect a higher price on only MEX/EGLD. As MEX might be seen as more valuable based on the pool APR.

[lucaswillems]

I see better now @joaquim !

Point 1: Let’s say right now the utility of MEX is 1 (can be used to provide liquidity in EGLD-MEX) and utility of XMEX is 10 (provide liquidity in EGLD-MEX, vote, boost rewards, fees collector, metabonding, etc).

If EGLD-XMEX is forbidden now and other pairs ESDT-MEX are created (but no ESDT-XMEX), then utility of MEX will increase and is let’s say 3 now, but utility of XMEX will decrease let’s say 7 now.

And I think it will reduce the overall willingness to buy MEX now: before buying MEX would grant you something with utility 10 at most, now it will be only with utility 7 at most.

So yes, people will have less reasons to sell MEX if they have it but they will also have less reasons to buy MEX firsthand. And having more reasons to buy is the first most important thing in my opinion. What do you think?

Point 2. What do you mean by added liquidity? Where is there added liquidity each time someone buys MEX and locks it?

Point 3. Which pool APR are you referring to? What’s the link with MEX value?

[joaquim]

Point 1: I would say the utility of MEX is 0.5 in your example as you can provide that same liquidyt with XMEX and gain additional benefits.

Yes, the utility of XMEX would slightly decrease. I wouldn’t go as far as 7 since you’re saying yourself XMEX can’t be used on low liquidity pools, so MEX would go up to 3 and XMEX would go down to 9.

I think it’s important to keep in mind that MEX and XMEX are, partially, the same.

The APRs on MEX-WEGLD would increase since only MEX would be allowed (at least double at first) creating a new incentive to hold MEX in addition to XMEX.

As discussed, it would also allow to create pools with other tokens, increasing the potential APRs on MEX.

Some users could even decide to remove energy from their XMEX to unlock them and creating more token burn, impacting positively the supply.

So I think it would create less selling pressure and more buying pressure as you can start earning APR without having to lock the token but you’re incentivised to also lock since the XMEX would give you higher APR.

Point 2: If a user buys MEX today, he takes both XMEX and MEX from the LP, then locks it, and can add it to the LP with additional EGLD. So that same MEX goes in circle. While if the XMEX can’t be added to the LP, the supply of MEX in the LP just decreased.

Point 3: Mentioned in Point 1.

[lucaswillems]

Point 1:

The APRs on MEX-WEGLD would increase since only MEX would be allowed (at least double at first) creating a new incentive to hold MEX in addition to XMEX.

If you increase the utility of MEX (might be 4), you decrease the utility of XMEX (might become 6), and this reduces the maximum utility reachable (6 now, instead of 10 initially), and it reduces the overall buying pressure.

As discussed, it would also allow to create pools with other tokens, increasing the potential APRs on MEX.

I am not sure to understand why it would increase the APRs.

Point 2:

• The user that buys MEX can just directly provide it in the LP too, no?
• When you buy MEX, lock MEX, and provide it as liquidity, the amount of MEX in the pool is the same but the amount of EGLD is bigger! So price of MEX has increased.
• Said differently, adding liquidity doesn’t change the price. If a user buys MEX, then price is not impacted by him providing liquidity or not.

[rocko]

Hello guys,

I’ve noticed a challenge this adoption of MEX for all of us and I’d like to share my thoughts on it. When the team introduced a new token called MEX, I became concerned about how it might complicate the process of introducing people to blockchain and the new financial system. It seemed like using EGLD and MEX could become confusing or might struggle to find a clear purpose in the world.

When I first learned about cryptocurrencies, I found the idea really exciting. I wondered if this could be the revolutionary new financial system that’s unbreakable due to its technology. I think Satoshi had a similar vision—a single coin for the world that can be used universally and can’t be manipulated or “printed.” So, since Bitcoin, EGLD was created and evolve a lot, opened many doors and with its advanced technology, it has the potential to support the new world economy effectively. From thousands of blockchains, until now I couldn’t find any other better blockchain than MultiversX. We all want a coin that’s versatile and can be used in various situations. However, to achieve this, we don’t need more and more coins.

MultiversX already has numerous coins and will continue to create more with each new project. The core team currently manages three coins: EGLD, MEX, and UTK. My idea is simple: just one coin. I would use EGLD for everything—to buy things IRL (supermarkets, groceries, car, house, etc.), NFTs, in the Metaverse, pay fees for exchanges, rewards for farming, and more. Instead of struggling to find use cases for MEX, we could simplify things by using EGLD instead. I would suggest to burn all the MEX and use EGLD for all purposes: rewarding people from farms in EGLD, using it for fees, Metastaking and in all partnerships with other businesses. Essentially, one coin that serves all our needs—a new form of money known to every person on the planet. That’s how I envision adoption. Just think about it for a moment.

Even though new coins will continue to be created on various blockchains because people want to become wealthy, we can still have a true and versatile coin used for everything, and that’s EGLD!

[xfoudres]

Hello man,

Unfortunately, that’s not how things work. First of all, how can we incentive the liquidity of a Dex with EGLD? Where would it come from? If it had to be printed, it would only create inflation, which is neither foreseen nor compatible with blockchain tokenomics.

Also, a single-currency economic system doesn’t work. I encourage you to take a look at the work of François Roddier to understand this.

http://www.res-systemica.org/afscet/resSystemica/vol14-oct2015/res-systemica-vol-14-art-01.pdf

Unfortunately in french, but DeepL or ChapGPT exist ahaha !

[souleymaz]

guys what about having two pools?

Egld\mex and egld\Xmex

One for energy

One for liquidity

[lucaswillems]

In the current pool EGLD/XMEX, when you put EGLD in, you get MEX out, not XMEX out.

So the EGLD/XMEX pool is not a normal pool, it is rather a “proxy” pool. When you put liquidity in the proxy pool EGLD/XMEX, the proxy pool deposits your liquidity in EGLD/MEX (so unlocks your XMEX), and when you withdraw your liquidity, it locks your MEX back.

EGLD/MEX and EGLD/XMEX doesn’t work the same way. EGLD/XMEX is not a different pool than EGLD/MEX.

Moreover, if it would make sense to have two pools, this would divide the liquidity in two.

[xadam]

I am one of those guys who regularly pull out my LPs, take all my Impermanent loss as Mex tokens swap it for Egld and put it back into the farm pairing my new egld with xmex increasingy LP # each week.
I had wondered what will happen when al the mex is pulled from the pool and theirs only xmex left. Do I get xmex or does the mechinisme of IL create Mex from xmex.

[lucaswillems]

It creates MEX for XMEX currently.

If you deposit 1 EGLD + 1 Million XMEX as liquidity and then the price of MEX dicreases, you will withdraw EGLD + 1 Million XMEX + some MEX.