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xINCH
1Inch Staking Strategies

Summary:

xINCH is an ERC20 wrapper for the 1INCH token and the 1Inch staking process. xINCHa/b holders express a long term bullish view on the value of 1INCH and 1Inch staking rewards. xINCH is a set-and-forget token, requiring no active participation from holders. xINCHa holders participate in governance via the Buchanan Mandate, where voting decision-making/deliberation is anchored around the doctrine of center-right economist James Buchanan. xINCHb holders participate in governance via the Samuelson Mandate, where voting decision-making/deliberation is anchored around the doctrine of center-left economist Paul Samuelson.
Read more about Mandated Governance at xtoken.vote.

The Strategy:

xINCH claims and restakes 1INCH rewards on behalf of users, allowing holders to compound their position.

Why xINCH?

    Lower gas costs
    Compounding returns
    No mental overhead
    Liquid collateral
    Tax Efficiency
    Representation in governance
Source: @ΔLΞXΔNDΞR
Lower gas costs: xINCH investors pay gas costs 1) when they mint on xToken or buy on a DEX and 2) when they burn xINCH or sell. That’s it. No gas fees for staking, claiming, re-staking, voting, or anything else.
Compounding returns: The xINCH contract automatically re-stakes claimed 1INCH rewards on behalf of the pool, allowing for maximum compounded returns. This comes at no extra gas expense to holders.
No mental overhead: Many 1INCH holders are long-term minded. There’s really no reason for them to periodically and methodically claim and re-stake. xINCH is set-and-forget. The burden on holders is non-existent.
Liquid collateral: While 1INCH stakers are issued Staked 1INCH when they lock their tokens in the staking contract, those tokens are just a representation of their staked position and are not yield-generating on their own. In contrast, xINCH is a liquid, fee-earning asset that can be transferred from wallet to wallet, added to liquidity pools or deposited as collateral for loans. (xToken Lending coming in Q2.)
Tax efficiency: In many countries, the action of claiming your rewards qualifies as a taxable event. Additionally, this claim is often registered at the full tax rate, not the lower capital gains rate. To add insult to injury, many investors will have to send a laundry list of micro-transactions to their CPAs — one for each claim. xINCH fixes this. There are only two transactions: in and out. And your rewards compound tax-free until you’re ready to sell. (Please consult with your tax advisor before making any decisions on this basis.)
Representation in Governance: When we launched xAAVE, we introduced a new approach called Mandated Governance. Our goal is to give investors in xAssets a voice in governance, even if they aren’t actively participating week-to-week. As such, we’re excited to continue building on Mandated Governance with xINCH.

Mandated Governance

We have two separates instances of xINCH, each with their own philosophy on governance. Over time, we hope that each Mandate — Buchanan and Samuelson — becomes their own institution, with decisions supported by core principles and precedent. We discussed our high-level intentions for our approach to governance in the xAAVE launch blog post (Mandated Governance section).
xINCHa is aligned with the Buchanan Mandate, where voting decision-making/deliberation is anchored around the doctrine of center-right economist James Buchanan.
xINCHb is aligned with the Samuelson Mandate, where voting decision-making/deliberation is anchored around the doctrine of center-left economist Paul Samuelson.
Read more about our mandates at xtoken.vote. Read more about how we are specifically applying our mandates for xINCHa here and xINCHb here. Our two funds will be voting as such:
xINCHa/b Mandates
We will periodically reevaluate these votes as the project and the ecosystem evolve and as we solicit more feedback from the community of holders.

Risks:

xINCH is risky and highly experimental tech. Additionally, the success of xINCH is highly dependent on the success of the 1Inch Protocol. In order to maximize returns, roughly 95% of the capital in xINCH is locked at a given time. Holders may not have full direct exit liquidity available when desired and may have to resort to liquidity on an external protocol like 1inch Liquidity Protocol. Do your own research on the risks of the xToken platform and 1Inch.
xINCH has been audited. Read the report by Blockchain Labs here
Last modified 1mo ago