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What is Multi-Staking?
XTK's Multi-staking Tokenomics
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Most DeFi protocols have a single use case, whether it be trading, asset management, lending or derivatives. Naturally, most protocol’s tokens accrue value primarily from a single business (examples: Synthetix from synthetic trading, Kyber from DEX trading, 1Inch from DEX aggregation). Thus, by owning and staking a token, token holders are expressing alignment with the risk/reward profile and revenue opportunity of that single service. This is basic staking, and for most protocols, it makes perfect sense.
In contrast, xToken is intent on building an ecosystem of products and services, each with their own risk/reward profile and value proposition. While we’re still in the very early stages of development, we are aiming to build a multi-faceted protocol and we believe that token holders should have optionality with respect to how they deploy their XTK and how they participate in the profits of the xToken ecosystem.
And this is the essence of Multi-Staking. Stake your XTK to a specific xToken product and yield the value associated with that product (or “staking module”) alone, while taking on the risks associated with that product alone. (We want to emphasize that when we say “product”, we don’t mean xSNXa or xKNCa. We mean xToken Management or xToken Lending.)
This emphasis on optionality extends to community use cases as well. We see XTK as the currency of the xToken Collective and will be building products to amplify the internal status and utility of the token.

Why Multi-Staking?

It might make sense to briefly discuss why we are building our token model around Multi-Staking. Why not just have a single staking module where fees from all products and services are directed and collected? So what if XTK stakers can’t select a specific risk/reward profile?
The answer is that it’s more than just allowing holders to express alignment with a risk/reward profile. It’s about unlocking as much value for the XTK token as possible. We now have the toolset (smart contracts and composability) to explore new efficient and dynamic models of capital, and we intend to experiment.
Here is a quick illustration of the importance of Multi-Staking: say there are 1000 people who would consider staking to xToken Management and 1000 people who would consider staking to xToken Lending, but just 800 people who would stake to both. If we offer just one all-encompassing staking module, we are limiting our capital base by 20%. This is dead value that we should try to unlock at any opportunity. By giving stakers this optionality, we are broadening our token’s use case and augmenting its value.
And beyond financial efficiency, we want to be able to leverage an open design space that allows us to be creative with how our token is used.

xToken Management

xToken Management – our fund offering – has been the primary focus of the project so far and will remain the core offering going forward. For this staking module, the fees earned from mint, burn and claim events will be transferred to a staking/claims contract, and XTK holders will be able to lock their tokens and earn a proportional share of fees.
While the basic idea is straightforward, there are a number of details we need to work out as a community.

xToken Lending

xToken Lending is under development and on target to launch in Q3. We’re excited about this launch as holders of xAssets will be able to earn native staking and LP returns while borrowing against their collateral. As it stands now, there are hundreds of millions of dollars of DeFi tokens deposited as collateral on Aave, Compound, Cream and other platforms, sometimes earning near zero in yield. We hope users will use our platform for leverage, while circumventing the opportunity cost of foregone staking returns.
We’ll be deploying xToken Lending initially without XTK staking. However, shortly after launch, we will deploy an upgrade that allows users to stake XTK in exchange for a slice of interest paid. Drawing inspiration from MakerDAO and Aave, stakers will serve as an insurance backstop for the lending protocol. And, just as we intend to bootstrap our xToken Management staking module, we intend to propose an XTK allocation to bootstrap the xToken Lending staking module as well.

Liquidation Medallions

As those who follow the space might be aware, liquidations on lending platforms can be highly competitive, often resulting in escalating gas wars that end up benefiting miners more than the liquidators themselves. We are planning a medallion system for liquidators, where medallion owners have exclusive liquidation rights but each owner is only eligible to liquidate a loan on a certain subset of blocks (oversimplified explanation: Medallion #7 can only liquidate loans on blocks divisible by 7).
So how do liquidators buy a medallion? With XTK of course. We’ll be selling (and buying back) medallions on a bonding curve, creating a natural market for liquidation rights.
This is a comparatively niche use case for XTK, but we think it’s a good illustration of the Multi-Staking concept. At any opportunity to add utility to XTK, we will build it.

Evolution of XTK

This outline is just the starting point for XTK, and we look forward to engaging with our enthusiastic community on the best path forward on implementation as well as new and creative ways to bring value to xToken users as well as XTK holders.
Last modified 2mo ago