xExchange Review: Maiar DEX 2.0 Now Reborns With Novel Features For 2024

xExchange – a revolutionary platform transforming how people trade and engage with decentralized finance (DeFi) on the MultiversX Network. It allows users to supercharge their DeFi operations with the first-ever concept of Energy. With xExchange, you can trade with ease and take advantage of the incredible opportunities offered by DeFi. In this xExchange Review article, we will explore its features and how it can benefit you.

Introduction

xExchange is a platform for trading and engaging with decentralized finance on the MultiversX Network. A gateway for the next billion people into the digital economy.

It is the second iteration of Maiar DEX – Maiar DEX 2.0 – and uses the same robust and scalable financial technology.

Around a year ago, and after facilitating over 3.2 million swaps, Maiar DEX – the economic powerhouse of the Elrond Network (currently known as MultiversX) – began to generate its initial liquidity inflows. These inflows helped to fuel an efficient and permissionless approach to value exchange within its ecosystem.

Maiar DEX evolves into xExchange

xExchange (Maiar DEX 2.0) has announced a game-changing update to its platform, featuring significant improvements and benefits that address limitations in the previous economic model. The new update brings a range of exciting features, including capped total supply, decreased emissions, and boosted APRs in Farms and Metastaking.

One of the most significant changes is the introduction of the energy concept, which builds on the time lock concept in version 1.0. This new system will allow users to enjoy a range of new benefits, such as staking rewards received automatically, direct access to preferential xLaunchpad tiers, Governance Power, and more.

In addition, the new value accrual mechanism will benefit long-term contributors and holders, with up to 80% of the whole amount being redistributed to them when users remove energy from their LKMEX.

The new MEX token will serve as both a payment and access token, providing recurring demand from projects and users who want to interact with and access the benefits brought by the exchange. Users can buy it with on-ramp solutions, use it for payments in xPortal SuperApp, xSpotlight NFT marketplaces, xMoney platform, and more.

The new update brings a generous bonus-pack for those who convert MEX to LKMEX, rewarding first-time users and existing users who bring more new energy into the system. With these exciting new updates, xExchange (Maiar DEX 2.0) is leading the way in quality-oriented crypto ecosystems.

xExchange vs. Maiar

xExchange (Maiar DEX 2.0) has made significant improvements and introduced several benefits while addressing limitations in the previous economic model. Here are the key takeaways from xExchange:

• The total supply will be capped, and proposed emissions will decrease year by year, making MEX 3 times less inflationary than Maiar DEX 1.0.
• LKMEX v2 introduces the concept of energy, which will boost APRs in Farms and Metastaking, offer 100% Metabonding rewards, direct access to preferential xLaunchpad tiers, and more.
• LKMEX v2 prioritizes quality over quantity, with energy providing more utility and power to users.
• Converting LKMEX v1 to LKMEX v2 will earn users between 2x and 10x more Metabonding rewards during the first 3 months and an NFT that can be exchanged for a guaranteed launchpad ticket.
• LKMEX v2 offers a value accrual mechanism where exiting from the energy paradigm benefits long-term contributors and holders.
• LKMEX will be non-transferable except in trusted setups, while MEX will be the entry point for the entire exchange ecosystem, serving as both a payment token and access token.

MEX is fully transferable, buyable with on-ramp solutions, and usable for payments in various xExchange platforms. It can also be used as liquidity in xExchange pools to earn trading fees and farm rewards. Overall, xExchange has improved its economic model, offering new utilities to its users while prioritizing quality over quantity.

Why is the xExchange important?

The MultiversX ecosystem boasts an extensive network of partners, builders, projects, and tokens. With xExchange, these communities and economies are empowered to leverage each other’s strengths, generating value that scales with utility and growth.

xExchange Key Highlights

• Blazing fast: State sharding technology makes all DeFi operations on the xExchange execute quickly and reliably while keeping up with any volume of demand.
• Inexpensive: Costs are negligible, so everyone can enjoy everything from simple trades to deploying complex strategies.
• Slick: Intuitive experiences will ease the following billion people into digital finance.
• Supercharged: xExchange is the first DeFi platform to debut the concept of Energy. It takes the “time lock” mechanism for its governance token to the next level of utility.
• Metastaking: Unlocks three different income streams for liquidity providers: Swap Fees, Farm Rewards and Staking Rewards.
• Metabonding: Supercharged Web3 community building for participating projects.
• xPortal App (1.2M+ users): Seamless onboarding – you can use MultiversX’s xPortal App to login and sign transactions on the xExchange. As secure as a Ledger hardware wallet, as convenient as Face ID + tapping on the screen. Additionally, xPortal is super easy to use – it automatically and securely creates a wallet in seconds, using just a phone number (not shared, only a hash of it is used once for wallet creation).

xExchange Features

The xExchange is a Decentralized Exchange (DEX) that utilizes an evolved Automated Market Maker (AMM) application to enable seamless P2P exchange of native tokens without needing an order book. The xExchange aims to provide global, near-instant, and inexpensive transactions among an expanding suite of assets. The xExchange DEX allows anyone to become a market maker on the exchange and earn fees for providing liquidity. An AMM uses a mathematical formula to price assets, unlike a traditional exchange using an order book.

Assets are priced according to a pricing algorithm, and swaps occur instantaneously against assets pooled to provide liquidity. Users can provide liquidity in these pools and be rewarded based on utilization. The xExchange rearchitects key elements of the DEX AMM concept to build a product that can leverage the entire performance of the MultiversX architecture. This provides special benefits, rewards, and use cases across the entire exchange and even other products, such as boosted APR in Farms and Metastaking, Metabonding rewards, governance power, swap fees rewards, and energy removal fees rewards.

Swaps

The xExchange DEX enables users to swap tokens for an automated computed amount of the second token, utilizing an Automated Market Making algorithm based on a mathematical formula to price assets. Instead of relying on an order book, the DEX sets asset prices using the algorithm.

A 0.3% fee applies to token swaps, with 0.2% of the fee distributed proportionally among liquidity providers based on their contribution to liquidity reserves. The remaining 0.1% fee is allocated for two purposes: 0.05% is used to buy-back and burn MEX from the EGLD/MEX pool, while the other 0.05% is divided among all wallets with energy.

Liquidity

Liquidity pools are an innovative solution to liquidity challenges on DEXs, using Automated Market Makers (AMM) instead of traditional order book models. Liquidity providers receive a liquidity pool or LP token representing their stake and are incentivized with rewards. Trading fees paid by users who use the pool to swap tokens are distributed automatically to all liquidity providers, proportional to their stake size.

On xExchange, the economics model includes a 0.3% basic fee, with 0.2% going to liquidity providers and the remaining 0.05% distributed among all users with energy. LP tokens can also be staked in a farm specific to each liquidity pool for even more rewards. However, providers should be aware of impermanent loss (IL), which describes the temporary loss of funds due to volatility in a trading pair. IL can be significant, reducing the dollar value of liquidity tokens at the time of withdrawal compared to the time of deposit. Providers should consider the potential returns from rewards versus the potential impermanent loss to make an informed decision.

Farms

Farms are a way for liquidity providers to earn additional revenue by staking their LP tokens. Farm rewards are typically in xMEX tokens, but dual token reward farms can exist. Liquidity providers can use farms by staking their LP tokens and periodically harvesting xMEX rewards. However, there is an early-withdrawal penalty to discourage playing with liquidity and ensure stability.

Farms have base rewards and boosted rewards, with 40% of emissions going to base rewards and 60% going to boosted rewards. Boosted rewards are based on a formula that considers the liquidity provider’s share of the farm’s energy in addition to their share of the liquidity. The APR of boosted rewards becomes visible at the end of each reward period and can be claimed at that time. Overall, farms incentivize long-term liquidity providing and offer an additional revenue stream for providers.

Metastaking

Metastaking allows liquidity providers to earn from three revenue streams: trading fees, staking LP tokens in eligible farms, and staking Farm position for additional rewards in respective farm tokens. By staking Farm tokens in Metastaking, users can earn extra rewards on the eligible part of their provided liquidity. This means that if a Farm token consists of 1000 UTK and 1 EGLD, stakers can earn additional rewards on the UTK part of their LP position. In addition to using LP tokens, regular tokens can also be staked in Metastaking pools.

Autorouter / Smart Swaps

xExchange’s Smart Swaps feature allows users to swap between any two listed tokens, even if they are not directly paired. The Autorouter automatically routes trades between available pairs to swap one token for another efficiently. For example, a user can buy UTK directly with USDC by using the Autorouter first to buy EGLD with USDC and then use the resulting EGLD to buy UTK. This allows for a single efficient swap instead of multiple manual ones. Users can see the chosen swap route by clicking “More details” on the swap page.

Price Discovery

The Price Discovery Mechanism is designed to help new tokens find their true market value while reducing volatility. When a token is listed on an exchange for the first time, there is often a lot of excitement and demand and uncertainty. The Price Discovery Mechanism aims to create a fair and transparent process for determining the value of a new token.

This is particularly important when a token has had a successful public sale, and there is high demand. By aligning the interests of all parties and giving everyone a fair chance to participate in the early stages of a new token economy, the Price Discovery Mechanism can help ensure that the token market is stable and sustainable over the long term.

xExchange Token (MEX)

MEX is the token powering the xExchange. It is designed as a value-capture mechanism and incentive vehicle. It will allow the compelling attributes of economic advancement to scale with its adoption.

The xExchange relies on the MEX token, which is fully community-owned, to power its operations. MEX is an essential component of the platform’s governance, fueling the perpetual decision-making process that ensures the platform remains at the forefront of innovation and sustainability. Additionally, MEX is designed to capture the value and serve as an incentive mechanism, allowing for scaling economic advancements through adoption.

To incentivize liquidity provision, xMEX, a locked form of MEX, is utilized. xMEX rewards are automatically locked for four years, making them untradeable and unsendable. However, users can shorten the locking period or redeem xMEX for MEX at any time, though there will be a penalty for doing so.

In order to eliminate the 4-year locking period for xMEX, an 80% penalty is imposed. As the xMEX tokens near their unlock date, the penalty decreases gradually.

When a penalty is imposed, 50% of it goes towards burning MEX tokens, while the other 50% is redistributed to xMEX holders.

Since xMEX is used for various types of rewards, such as farming rewards, boosted rewards, and passive rewards for energy-holding users, there needs to be some inflation to facilitate the distribution of tokens. The following are the inflation metrics for xMEX:

The first year’s emissions were under the old tokenomics (LKMEX). The transition to xExchange and xMEX happened simultaneously with a start into the second year of emissions.

Burns, and Other Deflationary Mechanics

• 0.05% of the entire trading volume on xExchange is used to buy back MEX and burn it
• 0.05% of the entire trading volume on xExchange is distributed to users with energy
• 50% of the energy removal fee (when decreasing lock time on xMEX) is used to burn MEX
• 50% of the energy removal fee is used to distribute extra rewards to users with energy
• 100% of the 1% fee, when withdrawing from a farm before the withdrawal timer runs out, is used to buy back MEX and burn it

xMEX and Energy

xMEX is a locked version of MEX that holds the same value, but cannot be traded, sold, or transferred for a specified period of time.

Rewards and fees generated from xExchange farming activities are distributed as xMEX, which is locked for a period of four years.

The xMEX tokens can be locked for any duration from 0 to 4 years, which are measured in epochs that span 24-hour intervals starting and ending around ~15:30 UTC each day.

Unlocking xMEX before the lock period ends incurs a penalty, which can range from 0 to 80% based on the remaining time left on the lock period (20% for each year).

For instance, if someone holds 100,000 xMEX tokens locked for a year, they can convert it to 80,000 MEX by paying a penalty.

Energy is a system in which xMEX tokens are attributed with points that are proportional to the locked period. Each xMEX gives 1 Energy Point per day it is locked for. For instance, if you own 100 xMEX that are locked for 1 year (360 days), you will start with 100*360 = 36000 Energy. After each day, you will have 100 less Energy.

The Energy Points an account has determines the rate of rewards for participating in xExchange. More Energy Points mean more rewards such as higher APR for farms, a bigger portion of xExchange fees, Metabonding rewards, and other perks. As the xMEX token approaches its unlock day, the Energy Points will decrease by 1 point per day. However, losing Energy Points does not mean the tokens are lost. The tokens remain the same, but the Energy Points decrease as the tokens get closer to their unlock date.

Token Utility

The Energy system is designed to reward users not only based on their xMEX holdings but also on the duration of their lock. xMEX has numerous benefits, rewards, and use cases across the entire exchange and other products.

• Boosted APR in Farms: Users earn base rewards and boosted rewards, with the latter being dependent on the amount of Energy they hold.
• Boosted APR in Metastaking: Users with Energy receive higher rewards when Metastaking compared to those without Energy.
• Metabonding: Only users with Energy are eligible to receive Metabonding rewards.
• Rewards for holding Energy: 5% of the xMEX emissions go to users holding Energy. It is not necessary to stake xMEX to receive these rewards.
• Launchpad tiers: There are two tier systems based on staked EGLD and Energy.
• Governance power: Users can vote on governance proposals based on their Energy.
• Swap fees rewards: 0.05% of all swap fees go to users with Energy, while another 0.05% is used to buy back and burn MEX.
• Energy removal fees rewards: When reducing or removing the Energy of xMEX, a penalty is paid, with 50% of the penalty being burnt, and the other half being distributed to users holding Energy.

It is worth noting that users can earn rewards from all reward streams simultaneously. For example, they can stake xMEX with EGLD in a liquidity farm and benefit from swap rewards, farm rewards, boosted farm rewards, metabonding, governance, launchpad tiers, swap fees rewards, and energy removal rewards at the same time.

Conclusion – xExchange Review

In conclusion, xExchange is a fast, inexpensive, and user-friendly decentralized finance platform for trading and engaging with digital assets on the MultiversX Network. It is built on the Maiar DEX 2.0 technology and offers unique features like Energy, Metastaking, and Metabonding to provide users with multiple income streams and community-building opportunities.

The xExchange Token (MEX) is the community-owned value-capture mechanism and incentive vehicle. The xMEX, a locked form of MEX, is utilized to incentivize liquidity provision and rewards distribution. The platform’s deflationary mechanics, including MEX buybacks and burns, contribute to its sustainability. With its extensive network of partners, builders, projects, and tokens, xExchange is an essential platform for empowering communities and economies to leverage each other’s strengths and generate value that scales with growth and utility.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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