[xEIP Draft] Rethinking (x)MEX

xEIP Drafts
1

Title

Rethinking (x)MEX

Description

This xExchange Improvement Proposal aims to deliver a rethought tokenomics model for MEX and xMEX, in which utility is added to MEX and even more utility is added to xMEX; all of this without interfering with the current tokenomics, inflation schedule and planned feature additions, while at the same time adding significant buying & burning pressure to MEX, driving up the APRs of all Farms and potentially bringing in new users.

Summary

The “Rethinking (x)MEX” proposal introduces a new tokenomics model for MEX and xMEX, aiming to enhance their utility and incentivize participation without affecting the existing token infrastructure. It plans to implement a governance system where xMEX holders can vote on various proposals, including the addition and removal of farms, with the intention of making the platform more decentralized and user-driven. A significant aspect of the proposal is the introduction of a mechanism for proposal creation that involves financial stakes to prevent spam, alongside a system for proposal voting that includes incentives for participation. The proposal also addresses farm weight voting, allowing xMEX holders to influence the distribution of token emissions to farms, potentially leading to a dynamic ecosystem where stakeholders actively compete for resources, reminiscent of the “curve wars.” Another critical point is the critique of using locked tokens for liquidity provision, which is seen as detrimental to MEX’s market value, suggesting the removal of this feature to preserve the token’s integrity. Lastly, it proposes a governance model for allowing the transfer of xMEX to whitelisted addresses for specific projects, furthering the ecosystem’s decentralization. The proposal underscores the importance of timely implementation, suggesting that these changes could significantly benefit the MEX ecosystem. Overall, it seeks to introduce more buying and burning pressure for MEX, increase APRs for farms, and bring new users to the platform through improved utility and governance mechanisms.

Proposal

The proposal consists of multiple individual points-of-improvement that are being explained below.

1.0 xMEX Governance

The ve-tokenomics model is the single most widespread DEX model in all of DeFi.
On other networks, most DEXes use this model, or a very similar version to it with slightly adjusted parameters or adapted features. Nevertheless, it is the most common and best-working tokenomics model currently in existence. It allows for a usually very sustainable emission of new tokens to the farms, while at the same time creating buying pressure through governance features that require holding and actively voting on certain aspects of the Exchange.

1.1 Proposal Voting

Currently, new farms are added to the farm section by… well honestly, we do not know. One can only assume that a project that wants to have their own farm has to go to the xExchange Core Team and kindly ask for a farm to be added. This does not guarantee you will get a farm, nor does this guarantee you will get a decent amount of emissions. The criteria for getting a farm are not known or publicly documented and frankly it seems that farms are reserved only to projects of significance in the ecosystem.

To address this, the following is being proposed:

xMEX holders can propose and vote on new proposals. This is how it could work:

  1. To create a proposal, you need to be at least of Ohm Tier (I would not go higher than Ohm, because creating proposals should be accessible by smaller projects and perhaps individual users also, which do not have a lot of money to spare)
    1.1 50,000 M energy for Ohm: 500 000 000 000 → (500 000 000 000/(360*4))*0.000006 = 2083$ (energy, divided by four years, times mex price)
  2. Four types of proposals can be created
    2.1 Proposal to create a farm
    2.2 Proposal to delete/delist a farm
    2.3 Proposal to create a dual-farm (ex metastaking)
    2.4 Proposal to delete/delist a dual-farm (ex metastaking)
  3. Each proposal is open for voting for 1 full week.
  4. To create a proposal for adding a farm or a dual-farm, a liquidity pool for that pair has to already exist and have at least 5k USDC or 50 EGLD in liquidity (and the respective amount of tokens for the other side of the LP.
    4.1 This is further protection to prevent malicious/spam proposals and add a small entry barrier, though this entry barrier should be easy enough to get over by small projects also.
  5. To create a proposal, you not only need to be of Ohm Tier, but also you need to purchase and pay 500$ worth of MEX. The MEX you need to provide to create the proposal is ultimately burned. This is to prevent proposal-spam and add an incentive to buy and burn MEX.
    5.1 The amount (I propose 500$) can be changed and discussed subsequently in the comments.
    5.2 Whether the MEX should be burned or distributed to xMEX holders can be discussed, but to sustainably increase the price of MEX, which leads to the farm’s APRs going up (and therefore attracts users), it should ideally be burned.
  6. Optionally, anyone (does not have to be the propoer) can add a bribe to the proposal. The bribe is to incentivize users to vote “yes/in favor” on the proposal.
    6.1 When a bribe is added, users are incentivized to vote, since it is a way for them to earn free tokens, simply for voting.
    6.2 The bribe can be in any token that is listed on xExchange and where swaps are enabled for that pair.
    6.3 The bribe is shared equally among all voters that voted in favor of the proposal, distributed according to their energy (someone with twice the energy would therefore get a piece twice as large of the bribe as someone with only half the energy).
    6.4 The bribe has to be claimed by the voters after the proposal is settled - if the bribe is not claimed within 2 weeks after the proposal ended, it is used to buy and burn MEX instead.
  7. To pass such a proposal, a quorum of 25% and a support of 50% (+1) is needed.
  8. If the proposal was not successful, the bribe goes back to the bribers instead of being paid out to the voters
  9. The MEX required to create the proposal still gets burned either way, because it was needed to create the proposal and acts as an anti-spam mechanism to ensure a baseline of quality for the proposals.
  10. Proposals all share the same (automatically generated) title like “Proposal to create farm” or “Proposal to delist dual-farm”.
  11. The proposer can add a description to the proposal that is stored ideally on-chain, but is obviously it is limited by how long it can be, so it is adviced to create a blog post on your own website and link to the website. (the tip to link to a website/blog post is written in the UI when creating such a proposal).
    11.1 Devs: make sure no XSS stuff can be done by adding malicious descriptions through this.

This should not be that hard to implement. A voting mechanism based on xMEX Energy already exists, the Smart Contract endpoint to create a farm also has to already exist somewhere (otherwise, how are farms being added today?). Only bribery and the requirement checks as well as the checks if you satisfy the requirements to create the proposal have to be thoroughly implemented, tested etc.

Implementing this into xExchange will add the following benefits and new features:

  1. One added usecase for MEX (needed to create proposals)
  2. Multiple added usecases for xMEX
    2.1 Needed to create proposals
    2.2 Will give bribery rewards when voting
    2.3 Allows you to vote on these proposals
  3. Increased decentralization and permissionlessness of xExchange
  4. Increased buying + burning pressure of MEX (MEX and xMEX benefit)
  5. More reward sources for xMEX (bribery, burning)

Logically, the creator of a passed proposal (for dual-farms) gets the option to set the parameters for the dual-farm later on (e.g. how many tokens are distributed over what time period) in a config/admin panel. Unbonding time etc. remains the same.

1.2 Farm weight voting

As part of the ve-tokenomics, voting for farm emissions is also part of the governance process.
xMEX holders should be able to vote for their favorite farm(s). The more votes a farm gets, the bigger the share of the xMEX emissions the farm gets.

The following is proposed:
All existing farms and all farms that have been SUCCESSFULLY proposed, are being called “farms” in the following text:

  1. Every week, e.g. on a wednesday (it can be any day), a snapshot is taken of the current voting results. This snapshot includes your current energy and the current votes for all farms.
  2. Voting is continuous. You can vote at any time
    2.1 You can vote for as many or as little farms as you want (vote different amounts for 5 farms or vote 100% for just one farm)
  3. When voting, your vote is locked for 7 days/epochs. After 7 days, you can change your vote (or not, if you don’t want to).
  4. If you don’t change your vote, your vote stays the same, forever (it is kept the same way, as it was the last time).
  5. Anyone can add bribes to a farm. The bribes are paid out after a voting period ended (the voters need to claim them after the period ended).
    5.1 Any bribes not claimed by a voter, will go back into the bribe pool.
  6. The bribes stay in the bribe pool and cannot be withdrawn by the briber.
  7. If there is less than (e.g.) 10$ in the bribe pool, the briber CAN withdraw the bribe.
    7.1 If there is less than (e.g.) 10$ in the bribe pool, the website shall treat it as 0$ aka no bribe, and nothing is paid out to voters (to avoid paying out dust amounts so small, swapping them would cost more than what it is worth).
    7.2 The intrinsic mechanism of how many dollars have to be in the bribe pool for the bribe to become “active” and what happens with the leftovers (briber can claim it back, or use for mex buy and burn) can be discussed and adjusted. However, keep in mind the ultimate decision how to do it and where the $ border is, is not that important. These small adjustments will barely have an impact on the final outcome of the implementation of the farm weight voting. If it’s 10$ or 50$ doesn’t make a difference. If the briber can claim it back later or if it is used to buy and burn mex also does not make a difference. We are talking about small values here that in the grand scheme of things do not matter. Especially does it not matter if the briber can claim it back (will he even claim it back?) or if it is used to buy and burn mex, because the briber added the bribes to the pool, with the intention of boosting the farm’s rewards, not with the intention of getting the leftovers back later on.

Just for clarification, if you do not change your vote, it will stay the same, as mentioned. Therefore you would also be eligible for all future/new bribes added to that farm.

Implementing this into xExchange will add the following benefits and new features:

  1. Two added usecase for xMEX
    1.1 Needed to vote on farm weight voting
    1.2 Will give bribery rewards when voting
  2. Increased decentralization and permissionlessness of xExchange
  3. More reward sources for xMEX (bribery, possibly burning)
  4. Added buy pressure to MEX and increased locking interest for xMEX as projects either have to bribe or get their own xMEX to vote for their own farms

This is how the “curve wars” started, which sent the interest in the CRV token to the moon. Similar “wars” are going on over at AshSwap, where the xExchange Energy-DAO equivalent of AshSwap, created by JewelSwap, is continously trying to gather more voting power, while other projects also try to add to their own veASH stack, to vote for their own farms. Farm emissions are ultimately very important to a project’s attractiveness, liquidity, price (more farm rewards → more interest by farmers → farmers join the pool, which means more buy pressure) and finally it is also simply a marketing expense, as higher APRs will lead to a larger visibility among users and farmers.

Creating an “xMEX war” will ultimately only mean:

  1. More buy pressure to MEX, and more locked xMEX
  2. Reason for “DAO aggregators” like JewelSwap (and VortX DAO, still on devnet) (and possibly Autoscale) to build an EnergyDAO
    2.1 Yes, JewelSwaps Energy DAO already exists, but it is unusable because you cannot mint their xMEX derivative yet, allegedly because they do not get the whitelist from the xExchange Team yet as it is pending their decision (despite XOXNO, EAPES, Krogan and Maiar Wizards having received such a whitelist).

The xMEX derivatives created by such xMEX wars, will ultimately lead to…

  1. Capital efficiency
    1.1 Stakers can lend their xMEX to farmers, and farmers get to enjoy higher APRs while stakers get a better staking APR than possible anywhere else. Even Robert Sasu described this in his thread (check the comments of the tweet).
  2. MEX buying pressure
    2.1 The higher APR of the derivatives leads to increased interest in the derivatives. And the only way to get these derivatives is by buying or minting them (both of which increase MEX buying pressure AND FURTHERMORE lead to permanently locked xMEX that will never see the sell button again).
    2.2 Autocompounding effect on farms - Yield optimizers are (if possible) autocompounding all rewards and this also leads to passive buying pressure as seen by pools like JWLASH-ASH or also on Ethereum with cvxCRV-CRV (and the dozen other CRV derivatives).
    2.3 The DAO aggregators trying to grow their influence, aka doing everything in their power to get more xMEX somehow, which is all xMEX that is locked forever. To get more xMEX, they will also have to buy some MEX.
    2.4 Ultimately, projects that need to vote for their own farms will also try to grow their influence by bribing more or growing their own xMEX holdings → either way, it benefits xMEX holders.
    2.5 Finally, the complex interactions between the different parties with different interests (DAO aggregators, yield optimizers, projects voting for their own farms, large whales and professional farmers and liquidity providers, your average user with their own favorite project and xMEX holders looking for the best bribes) will create a complex and competitive landscape where the stakeholders should think before strategically placing their next move - the ultimate beneficiaries of this are xMEX holders. If a project is trying to grow their own farm weight, it will influence the behaviour of the DAO aggregators, force them to somehow get more xMEX, advertise their derivatives more, increase marketing for the derivatives and ultimately for xMEX and xExchange and so forth.
  3. Possible increased developer activity on MultiversX, as the (by far) biggest Exchange has adopted this model, making building on top of it attractive and feasible.
    3.1 Imagine being a project, trying to build a yield optimizer or dao aggregator - but the only Exchange where you can easily and effectively do that on MultiversX is AshSwap. Not much reason to build on MultiversX then → compare it to other networks with many such DEXes and MAAANY “dao aggregators” and derivatives, each fighting for their share of the pie. (There are many more exmaples than just the curve war → all somewhat successful/big DEXes experience these positive effects).

There is a reason this system is so popular and successful on all other networks and as we have seen on AshSwap, the same effects happen on MultiversX.

2.0 xMEX Liquidity Provision

I appreicate Robert Sasu a lot for his valuable insights.
Recently he shared another piece of wisdom on Twitter: “Locked tokens meant to be locked. Not sold in secondary markets.”(I ran into a link limit, so I had to break this link twitter (dot) com/SasuRobert/status/1776269574171762956)

While it may seem obvious at first, it is not obvious when looking at xExchange.

I did thorough research. I really did. But I could not find a second DEX anywhere in all of DeFi that allows users to use LOCKED TOKENS to provide liquidity.
Due to Impermanent Loss, it is possible to essentially sell these locked tokens at full value.

xMEX is supposed to be locked. xExchange is already unique in the regard of allowing users to unlock their xMEX at a 80% penalty. This is very uncommon, in fact I also don’t know a second DEX doing this.

Anyways, you can keep the unlock fee. What bothers me is the fact that you can use xMEX to provide liquidity to the EGLD-MEX pool. This has to be removed! This is hurting the price of MEX in ways most users are not thinking about! Let me elaborate.

MEX is advertised for having about 4 trillion circulating supply - on the Explorer, on CMC, on CG, everywhere. But by allowing users to provide liquidity with a LOCKED token, the actual circulating supply that affects the market price is much higher in reality.

Everyone that has read this far understands how AMMs work. If there is more liquidity, price impact is less. While more liquidity is a good thing in principle, for users to experience less slippage and price impact, using locked tokens for this is the pinnacle of bad.

Yes, it may be beneficial for farmers to allow liquidity provision with locked tokens. They get farming rewards and all the other xMEX benefits. And by taking away the farming rewards, they would “only” get everything else, excluding the farming rewards. So essentially we would be taking away a feature here.

But one must understand the consequences of this. We are adding tokens to circulation that should not be there. A long time ago I saw someone ask somewhere why there are no LKMEX-Token pairs and it was answered with (quoted from memory) “because someone could manipulate the price to essentially unlock LKMEX tokens at full value”. But only recently (a few days ago) it clicked for me. We allow users to provide liquidity with locked tokens today.

This means any buy pressure happening to MEX is unlocking xMEX tokens that are used to provide liquidity, at full value. xMEX tokens are being unlocked at full value as we speak. When MEX rallied a little bit a year ago with the introduction of new Launchpads and the communities “Mex to 1” initative, a significant portion of the buying pressure literally went into unlocking xMEX/LKMEX at FULL VALUE. Let that sink in.

I do not know the % of locked tokens versus unlocked tokens in the EGLD-MEX liquidity pool, but the percent of locked tokens is eating away all the buying pressure and is literally bypassing the locking mechanism.

Yes, of course, removing locked tokens from liquidity provision would mean less liquidity. But that liquidity should not have been there to begin with! And again, it is bypassing the locking mechanism.

If there is a governance vote on the entire proposal that I wrote here, this has to be a part of it, otherwise the positive effects of proposal and farm weight voting and everything else are significantly dampened. Aka they will not do as much good as they could have done.

The fact that there is (seemingly) not a single other DEX allowing locked tokens to be used for liquidity provision shows that this is indeed a serious weakness in the current tokenomics of MEX and xMEX.
And, as Robert Sasu said, locked tokens are not meant to be sold. And frankly, liquidity provision means selling and buying. This is a fact.

If you do not want to listen to me, listen to Robert Sasu.

Finally, one more thing: if xMEX-EGLD is removed from the liquidity pool (not used for swaps) and also doesn’t earn any farm rewards anymore, the Farm’s APR will spike significantly due there being less liquidity in the farm relative to the emitted rewards, which will make the APR go up. And a higher APR ultimately means more interest in the farm by farmers/liquidity providers → which will lead to possible buy pressure in MEX.

Again, locked tokens shouldn’t even have been in the LP to begin with, they are locked and not supposed to be sold, bought or traded in general. If you think I am wrong and xMEX should be able to be provided as liquidity, then you are surely also in favor of making xMEX fully transferrable and tradable on secondary markets, no? Maybe an overexaggeration here, since it’s not 1:1 the same thing, but the principle is the same.

3.0 xMEX transferral whitelist governance

Allow projects (dao aggregators, yield optimizers, etc.) to launch a Governance proposal.

You will need: At least OHM Energy league, 500$ (or more, can be discussed) in MEX (which will be burned).

A project can create such a proposal to ask the community to get a whitelist for allowing to transfer xMEX for their own usecase. I.e. people can transfer xMEX to the to-be-whitelisted address.

This is needed to allow the decentralized and permissionless addition of DAO aggregators/yield optimizers. At the same time, transfers to other users will obviously stay banned, as xMEX should not become tradable directly on secondary markets, as the xExchange team intended and I agree - at best, in the form of derivatives.
This is how all popular ve-tokenomics DEXes do it and it has been working out for many years. Derivatives trading is okay, because the derivatives are part of their own DeFi ecosystem and have their own implications. They are not xMEX - while backed by xMEX, they are their own thing and have their own benefits, downfalls, features and usecases and are part of another project, e.g. cvxCRV.

Please feel free to comment. I will try to not influence the discussion about this too much, as I genuniely want to see whether you guys agree, disagree or have change ideas.
Please actually keep it to: agreeing, disagreeing or changing parts of the proposal and keep it friendly and civilized.
And definitely stay on the topic and do not deviate from it. We should discuss this xEIP and not other things.

I want to mention that we should come to a conclusion rather sooner than later, because implementing all of this soon, before the altcoin bullrun starts will have an even more amplifying effect to MEX and, frankly, the entire MultiversX Ecosystem.

If xExchange is doing (very) good, then the MultiversX ecosystem is doing good. For many people the xExchange is still the core of the DeFi Ecosystem (even if, realistically, it is not anymore). Realistically, it is Hatom. But in terms of DEX activity, xExchange is still #1, by far. xExchange is the biggest DEX on MultiversX by TVL and volume and user count. Now that xExchange has it’s own governance by users and is basically not a product of MultiversX anymore, but community owned, we need to bring forward it’s growth. And since xExchange is still the most important DEX by far… if the Ecosystem is doing good, the entire network (and EGLD) will be doing good. Let’s bring xExchange forward with this xEIP and take EGLD with it.

Let’s ramp up innovation and speed-of-implementation. We need new stuff fast. The last time we got new stuff was with xExchange V2, and that was in November 2022. Now we have April 2024 and the next big thing we will get is a website redesign with xExchange V3. Not saying it is bad, but it is not helping the mechanisms running the Exchange and does not bring new innovation or features to it’s stakeholders (which is not only xMEX holders, but also projects that have a farm, metastaking farms, etc.)

EDIT 1:
PS: I am not sure, if the current governance mechanism is still with a square root voting mechanism, where the energy is square rooted so that whales have less impact relative to their xMEX holdings. If this is still the case, it has to be adapted to linear growth of voting power instead. AKA 1 energy = 1 vote. Because 1) all DEXes do it this way and 2) it disincentivizes buying more xMEX to vote for your own farm or your own proposal and it goes against the principles of DAO aggregators and disincentivizes them also. If I am a project and want to grow my own share of the farm emissions, I will invest money into doing so. But, if I have less and less impact the more money I invest, because a square root formula is used, then I will simply stop investing at some point, because it is not worth it anymore. And if I stop investing because I cannot keep on growing my influence, there is no reason for my opponents in the “xMEX war” to also keep buying xMEX to grow THEIR share of influence. The entire cascading effect of the “xyz wars” that Curve and AshSwap are experiencing would be broken.

In fact, this mechanism can be bypassed by using multiple wallets anyways, which would work for a project voting for their own farm, but not for DAO aggregators. This mechanism was changed for all future EGLD governance votes also (from square root to linear), because the team has come to the realization, after a post on the MultiversX Agora, that the square root formula does not really work). I know it’s a bit different for xMEX, but the general idea still applies. And overall, to actually be able to use the farm weight voting properly, you need to be able to have a “more money invested = more voting power” kind of governance. And with a square root formula this is not the case. The more money you invest, your growth of voting power slows down increasingly fast.

EDIT 2:
Slight adjustments in the text.

EDIT 3:
Slight adjustments in the end text.

14 Likes
2

I totally suport this proposal ! 100 % ! We need to start changing things regarding XMEX and XExchange ! ( this message is coming from a person with 200 + million MEX locked )

5 Likes
3

I have no idea what is hindering them from doing this, because for like straight 2 years now, it has been proved that Bribing, voting for emission farms, letting people sell is way better than not …

80% unlock fee is a straight punition ! I don’t know who proposed this shit but it’s idiotic AF sry but we have to say it whether you like or not ! Why the financial world is thriving ? It’s because the less friction there is between capital where countries allow inflow and outflow of money go smoothly is a direct form of liberty and trust ! The same can apply to all crypto protocol !

Nobody want to have to wait 4 years or pay 80% to exit a position ! 15-20% and 1 year is far more decent !

Stop fearing the outflow of capital ! There are only hardcore believers now ! It will help both xExchange and MvX that i am sure of !

But before implementing this seamless outflow, just implement what a normal dex is supposed to have !
_Sellable rewards
_Concentrated liquidity based on volatility
_Liquidity strategy and managers
_Perpetuals
_Bribing
_Voting for emission of farms

Please this is a must have for any dex !

2 Likes
4

@financefreedom
I have specifically asked to stay civilized in the comments, so please remain calm.
Being angry at the team for being slow and calling stuff ‘shit’ and ‘idiotic’ is not productive nor is it criticism and by far it is not constructive criticism.

Furthermore, please stay on topic!
Your entire comment reads like it’s just rage and a rant.
Well, in fact it is a rant. Your comment adds nothing valuable to this xEIP-1 and you do not even state if you agree what I wrote or disagree.

I do want to lecture you about 1 thing though, which you specifically mentioned as idiotic:
The 80% unlock penalty.
All DEXes using the ve-tokenomics model do not even allow unlocks. You are locked for the entire time period you chose (most commonly, it is 4 years. Almost all DEXes using the ve-model allow for a maximum of 4 years - so xExchange is on-par here. We are not locking longer than anyone else).

The fact that we allow unlocks is a very liberal decision. Usually unlocks should not be possible because it is supposed to be a locked token. In fact, if anything should be changed here, it is to not allow unlocks.

But doing this would break the farms. Since users would get a fully locked token and not even the ability to unlock it for liquid farm rewards. So that would disincentivize providing liquidity and farming it. And that is the exact opposite of what a DEX wants. A DEX should be incentivizing liquidity provision.

However, I agree, usually the farm rewards are fully liquid on other DEXes (and not locked with the option to unlock them at a penalty). This is a tricky situation xExchange is in. If I can come up with a potential solution I will propose it in a seperate xEIP.

But for now we should focus on bringing this xEIP to a governance vote asap because it is needed.
We can discuss how farm rewards should be emitted elsewhere. I agree that the current situation of farm rewards is… not perfect to say the least but it’s also tricky to change it without affecting the tokenomics. In this xEIP-1 I tried to add everything that I proposed without changing current tokenomics. And I think I did it correctly.
I will think about how to improve the farm rewards, maybe I can come up with something and propose it in another xEIP.

And again, please keep the discussion to the xEIP and remain civilized and stay on the topic. In the comments of a xEIP its about discussing the xEIP and not about ranting over the team or over xExchange in general or discussing stuff that isn’t even part of the xEIP. This is not what the comments are for.

5

Well done mate! Definitely in favor.Although the rewards should be paid in MEX with the option to lock them imo. That would eliminate the need for whitelisting.But I m not sure how feasible that is at the moment, the unlocked rewards!

2 Likes
6

@radumaitare
Whitelisting xMEX is still needed for DAO aggregators/Energy DAOs/Yield Optimizers.

But liquid MEX Farm rewards are needed in one way or another. I have some ideas but I want to gather more ideas before proposing all of them in a new xEIP

3 Likes
7

Another point to think about is, not just XMEX liquidity pairs, xExchange currently also allows for locked tokens eg. Locked ASH - LKASH, LKITHEUM and other LK-tokens to be paired as liquidity. which is again, indirectly allowing for selling of locked tokens. Experienced LP players can take advantage of this easily and unlock their tokens via the liquidity pool.

3 Likes
8

Hi guys, I have been a xExchange user since day 1, currently in Newton energy league.

I fully support this proposal on all points mentioned. Please find some comments below.

1)Farms rewards should be democratised and decentralised and a bribing system has been tested and proven to work very well (see AshSwap, Curve) and would incentivise people further to hold and accumulate xMex. Currently, as mentioned, we have no idea how farm rewards are allocated and seems to be done directly by xExcange team based on criteria only known by them. Given that xMex is meant to be the governence token for the platform, farm rewards allocation should be decided by xMex holders. New projects launched on xExchange seem to always get farm alocation, and fair enough, maybe to attract projects a certain rewards could be offered to them at launch, let’s say for a limited time period of 6 or 12 months, after which they should incentivise xMex holders to vote for them if they want to keep the rewards for their farms going.

2)I agree with removing locked tokens from the LP provision. Though currently I am using this feature myself to provide liqudity and earn extra rewards, i can see the advantages of providing liqudity only with Mex, and this should again incentivise people to buy more Mex to earn better rewards. If xMex holders don’t like this change, they have the optio of unlocking xMex and paying the penalty for this.

3)I think the penalty for unlocking xMex should stay in place, other platforms for example AshSwap doesn’t have this option and vAsh tokens once locked can’t be unlocked till lock time has ended. xMex gives people a way out if they don’t want to wait, but obviously this should come with a penalty which seems fair.

4)Agree with removing the weighted voting power for energy and changing it to a linear progression.

I hope that these proposals can be discussed fast and put to a vote and if passed implemented quickly, as indeed time is of the essence here with ongoing bullmarket, we don’t want to be left behind and miss the opportunity.

2 Likes
9

I support this.

I always thought having locked tokens in LP (LKMEX and now xMEX) is one of the main reasons for MEX extremely bad performance.

Also the lack of governance activity makes MEX/xMEX governance token almost useless for the governance usecase. The most recent (actually the only) vote was in 2022.
This also generates frustration amongst xMEX holders and a feeling of never-ending waiting for the xExchange team to decide to change/improve something/anything.

L.E.: This is needed by yesterday.
If another 1.5 years will pass until this (or any other) significant improvement to happen, then it will probably be too late.

3 Likes
10

I totally suport this proposal ! 100 % !

2 Likes
11

I appreciate the effort you have gone to in writing this all up, I certainly agree with your thoughts.

Frankly, the core of what you speak about is xExchange’s developmental stagnation and the neglect to its widely touted first class token.

That’s not to say where things are isn’t redeemable, just that without some rapid implementation of FEATURES, and TOOLS like you suggest then I don’t see much of a long term future for the product. It will be passed by more innovative products and liquidity will find its way to greener pastures.

A UI/UX refresh isn’t good enough after several years, like you pointed out. I do understand there has been deeper changes to the smart contracts to enable swifter transactions and liquidity provision - but is that really what people want right now? There’s so much low hanging fruit that could provide value.

I know you asked for this to stay on topic of the proposal, but I’m just exhausted from the lack of pace or agility.

To try and realign myself back, it would be great to see the xExchange team explain why this CANNOT be done? We have a governance system, let’s vote on it. It barely gets used - let’s give it a purpose and use it.

2 Likes
12

I think you’re over-exagerating what i wanted to convey, it was more frustration than rage or rant :rofl:, i almost completely agree with your proposal mate !

I think my post add value in the way that your view point is shared between us and should have been done way before by the team but as i said in my other post, infrastructure may be hard to change or adapt by the team and maybe other things but we had very little communication over this.

By the way i can cite at least 3 DEXS who have shorter locking time between 6 months and 2 years locking time, but i don’t want to enter into this kind of debate.

What i have seen to me wich seems to be great and what i stated in my other post is :

What we have currently :
_Swap fee is 0.3 %
_AMM
_XMEX Unlocking is energy based → 80% fee for 4 years locked MEX
_XMEX earn 0.05 % of all fees
_LP earns 0.2 %
_Rewards in XMEX locked 4 years with different batches each months
_No control of the emission for MEX
_Boost APR for farms with XMEX
_Emission of MEX of around 260k MEX per block
_No DAO (Almost)
_No Bribes
_No comprehensive analytics
_No perpetuals
_Metastaking
_Metabonding
_Automatic and permissionless listings pairs

What we need to have :
_Swap fee need to be volatility based (Many studies have proved it works way better and make capital way more efficient !!) low volatility → low fee / High volatility → High fee (range around 0.1% to 1%)
_Liquidity needs to be concentrated in a tight range and need to be managed accordingly ! Have a team on this monitoring the situation at all times or make a rebalancing bot behind the scene wich will apply a strategy to rebalance when certain treshold are met and rebalance the pool !
_MEX locking 4 years is too long → reduce it to 2 years or even 1 ! XMEX removal fee need to be reduced from 80% to 15-20% max to reduce friction and to stop rebuting investors to invest in MEX.
_XMEX earning 16.66 % of all fees is ok IMO but the 0.05% actually burned could be offered as rebase to XMEX holders to prevent dilution of their capital instead of burning it —> Then they should earn 33.33 % of all fees !
_LP earning should be kept as it is but since the swap fee will be changed, the LP earn 66.66% of fee from the farm
_Boost APR is OK as it is and give more utility to MEX and ratio for the boosting APR should maybe studied to incentivize users to boost by not asking them for a huge amount of XMEX either. A good balance between those parameters is the way.
_Rewards distribution needs to be unlocked ! Stop preventing people to sell → it is actually doing the exact opposite effect of what was intended → instead of selling they just don’t invest in MEX wich actually hinder xExchange in its growth → I hope you should have realised by that time (sorry to be harsh on this but trust your community please ! We are not dumb mercenaries we won’t sell if xMEX is sought after and is appealing for investors !)
_Give control of the emission for MEX on farms → Give Voting power in proportion to the XMEX you have → Make us able to see the fees earned by a particular farm and liquidity pool to permit us to vote for this farm if fees are attractive in a said EPOCH.
_Emission of MEX should be more understandable and permit us to see how much MEX is going to be emitted per EPOCH → To anticipate how much potential selling pressure we will have and act accordingly ! On this you can even extrapolate and show us how much MEX gonna be emitted in a year.
_DAO for proposals like xEIP should have a little corner on xEXCHANGE to let users know that you can propose whatever you want.
_Implement a bribe system to permit projects to incentivize liquidity providers and rewards XMEX holders and voters
_Implement a charting tools with tradingview charts (powered by e compass for example) on each pair
_We need more analytics and vision on the fees earned on xExchange/ the bribes provided/APR generated per epoch for XMEX holders/etc …
_Implement a perpetual exchange a bit different than ashswap who is relying only on USDC for collateral. Take a leap and implement a LPMEX collateral with bluechip ESDTS (something like JLP token from jupiter on solana) (MEX/EGLD/BTC/ETH/USDC/USDT/USH ?) → In a practical term the user will deposit any of those asset in the perpetual platform and will be able to trade with them directly ! All operations for token swap or borrowing or hedged trade will be handled behind the scenes !
Implement a vault wich will be funded by all of those assets and where you gonna get it funded by borrowing or funding/deposit/withdrawing fees and loss of traders fees (You can even redirect of portions of the fees generated to XMEX Holders like ashswap)
_Metastaking is great as it is, no need to touch it IMO.
_Bribing should replace metabonding in my opinion or it could be rebranded as a tool to let users learn about the said project (like you’re doing with V3 i think no ?)
_Automatic and permissionless pairs are a great tool and shouldn’t be touched also ! Maybe write some tips contents for pool creators to let them know how the AMM works and permit them to set date to enable swap or edit fees earned by the pool.

Please read it !

13

I am all for a change, current system is not working.
However I do love the dex, not sure the new simpler one is needed and a new UI with no additional utility is just lipstick on a pig.

Rewards should be liquid, at present the locked rewards are no longer worth it as metabonding going away and the apr boost is not enticing when the equivalent liquid % reward is only 20% of what is shown.

The biggest problem has been lack of volume, but the burn mechanisms are insuficient even for current volume and emissions for sustainability

One thing that has bothered me is why the true circulating supply is obscured, when Mex2 has released circulating supply was around 7T, the current dex is only showing 4T as it is only counting tokens provided as liquidity or staked in a farm. Is this normal in other ecosystems ?
The actual current circulating supply is probably around 10\11T with the difference able to affect the token price through trading.
The volume of fees needed to burn 1% of supply would probably require visa\mastercard level of daily tx so something new is needed

The dex is going to need a combination of higher volume, higher fees and more burn mechanisms so I support any move that achieves these

14

@user77
Please stick to discussing the xEIP…

The shown cirulating supply of 4T is indeed correct, but the fact that xMEX can be used to provide liquidity make the cirulating supply number completely irrelevant, which is why this must be removed!

1 Like
15

Volume isn’t here because rewards aren’t liquid, that is preventing volume and trades first of all !

If rewards are liquid, people can sell them to buy other stuff, put liquidity if APR is interesting or they have convictions or anything else, bribing can further intensifies liquidity providing/Mex trading and locking/Swapping.

Then xExchange should also build a perpetual wich is very lucrative and is clearly a great tool to boost sustainability over the metrics of the exchange !

It should be a bit different than ASHPERP like JLP on jupiter to me (a multiple token design used to provide collateral).

Then when those wheels are in motion, the rest should follow, traders/investors/farmers will come back to xExchange and MEX when they see better APR from liquidity in XMEX removed, sellable rewards, locking APR, Bribing APR, vault APR from the PERP etc …

Then with the DAO funding with one of the precedent xEIP, they can further intensify and market the exchange by rewarding using xExchange.

Let’s say they implement questing system with a prize pool (like i don’t know something like 5k $ for example) into xExchange to earn points each 2-3 weeks :

_Swap at least 5$ of asset to get 10 xp
_Provide liquidity (min 10 $) in any pair to get 20 xp
_Do a thread on xExchange on X in a meaningfull way to earn let’s say 10 xp if thread reach 1k view/ 20 xp to rech 2k views/ etc …
_Other miscellaneous quests
_Imagination is the only threshold then

Then after those 3 weeks check the leaderboard and then reward the first TOP 100 with linear distribution over xp Earned.

That would clearly boost metrics/volume/usage.

To me those solutions are all great and push people to use, talk, educate and boost xExchange in growth on almost every metrics !

We need a healthy loop to produce volumes/fees/usage/price uptrend/APR, hope isn’t lost when i saw them empower and adjust the exchange with the meme fever recently to ride on this wave.

1 Like
16

@financefreedom

I will not answer to all your suggestions, there are some good ones in there, but also some that will not do anything. It’s more important to change the mechanism instead of adjusting a few configuration numbers somewhere.

Anyways, what you are suggesting should be formally and thoroughly thought through and then officially proposed as an xEIP.

But do not worry, I have more xEIPs planned for release soon.

It’s up to the team to push out the governance votes now and the community shall decide if we want to do this.

1 Like
17

While I am an advocate for liquid rewards - the fact that rewards are not liquid is likely NOT the reason volume is not here. Farm rewards and attractiveness for trading have very very little to do with eachother.

Can be done but is a heck ton of work, this is like building xExchange again, from scratch, and in more complex. This is a heck ton of work. We should first focus on improving what we have, because we can already achieve some form of sustainability with what we have, instead of building a perp dex that might end up not being used by anyone because other perp DEXes with more liquidity and trading pairs and more users already exist.

So in fact, if this was to be voted on right now in governance, I would vote no because this is not what we should be focusing on, and it might not even yield good results, besides the fact it will take way too long to build.

Indeed. And this is what we need to try to achieve - a new perp DEX that will probably go live 1 year from now if development would start today would not do much.

Implementing everything discussed in this xEIP can be done in 1-2 months for sure and will yield results very quickly. But more xEIPs from me are coming soon and they will also be important to increase the attractiveness and most importantly capital-efficiency of xExchange.

1 Like
18

Yes not entirely true but liquid rewards are a part of it clearly.

There is no real traction on the exchange at the moment because traders/investors/farmers have no way to use xExchange correctly.

Farmers wanna farm → they get unsellable XMEX and if they try to get them liquid they get punished with an 80% reduction.

Traders wanna trade → they can’t because there is no great tool providing them limit orders/SL PT/leverage mechanism/funding fees/open interest.

Investors wanna invest → they can’t because they see no incentivization to do it, price is declining, they need to lock MEX for 4 years without any way to exit it, they got no bribes to vote for, no voting power to control farms emission, no dao proposals to vote for, APR on the locking of their XMEX isn’t shown, APR for metabonding isn’t shown, Emission value for MEX per epoch/year is hard to read, etc … They can’t evaluate their ROI so they just don’t invest.

The people that are present here and now are none of those type of people ! What we have now is Speculators and Hardcore Believers and that is all.

Perp exchange is indeed hard to build but the rewards for doing so is generally great for the revenu of the exchange even when there is almost no user using it ! (even ashperp isn’t really used at the moment, you can see very little trades on it)

I have seen a few DEXS building their Perps and the result clearly show that the revenu generated is greatly helping the platform and TOKENS holders even when there is few traders on it !

What you proposed is a good step but i have no idea how to prioritize those things because i don’t know how they built the infrastructure in the first place, if you have to upgrade and rewrite almost every smart contracts just to implement your solutions (it may not be fast).

In this regard, maybe just a clean slate and copy pasta of another great dex and adjusting the code to the framework of MvX could be way faster than adapting the entire infrastructure (Lucas explained in a tweet on X that the delay in the v3 was also due to technical debts), it already tells us a lot that adapting all the code seems to be quite challenging here !

let’s wait and see his official response to all of this !

19

Again, this is not the issue.

Locking for 4 years is not unusual for the ve-tokenomics - and yes you can exit, but at a penalty.
This is the only DEX i am aware of that let’s you exit. Literally all other DEXes do not even let you unlock your locked tokens. So criticizing xExchange here is laughable. We are very liberal in this regard.

And just because you “know DEXes with less lock time” doesn’t mean our 4 year lock time is bad. As I said in the proposal the ve-tokenomics are generally the same everywhere (the same mechanisms) but some parameters and configs might be adjusted. All DEXes with 4 year lock time are the living proof of it.

Also, you can choose how long you want to lock, as an investor. 1, 2 or 4 years it’s your choice.

We should not be waiting on an official response. We should see more postivie engagement by the community under this xEIP and then push the team to run a governance vote (how/why can we not execute our own vote anywhere?) anyway’s thats a topic for another proposal

1 Like
20

4 years is too long to wait if you wanna get back your full position.

1 year or 2 is better IMO to encourage locking MEX for max boost !

Of course if you wanna exit earlier → a penalty is in order ! 15-20% as i said is way way way way way way way way way better than 80%.

Mentally 15-20% adapted on volatility and use of the exchange isn’t such a burden and feel like OK for investors to lock and increase their positions !

80% is just way too much ! period on this.

The locking should always choose maximum rewards (fees/bribes), it’s a mental bias to think that people won’t go for that additionnal yield and choose shorter timeframe to unlock and get lesser rewards.

Dune dashboard prove that most of the DEX tokens are always locked for max duration, hence why the heck should we even implement another timeframe.

You lock you get max rewards and that is all, adding other timeframes will just put more complexity over the infra and the dealing of code behind the scene.

People are greedy and will always be. If you tell them you will only get 5$ instead of 10$ because you locked for 2 years instead of 4, they will just lock 4 years and complain after that they want shorter locking time because it just exist.

Just get rid of this.

Get MEX, LOCK MEX for anytimeframe is predetermined by the code then just get max rewards, no schennanigans of 1 year lock you will get 0.25 XMEX, 2 year lock will get 0.5 XMEX, it’s just adding complexity !

That is my view point on this.