The future of the XIO Liquidity Program | Stable Coins vs. Collaboration #XIOfeedback

Ever notice when ETH or BTC goes up/down 10%, so does most of the altcoin market? This isn’t always attributed to buying/selling of altcoins, but because most decentralized assets valuations are derived from BTC/ETH.

While this is great for altcoins in a bull market, it can have extremely negative implications in a bear market.

This video is an informal proposal with a goal to decouple XIO from the general market in an attempt to create a more resilient, sustainable, and independent token system.

Near the end of the video, there is a second proposal made with a goal to, instead of decoupling, align the XIO token model with up-and-coming projects.

Are you in favor or against these proposals? Why?

Which would would you prefer? Option one or option two?

What do you think of the two proposals? Could they work? What are the upsides and downsides of them?

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Out of the two options, I prefer the idea of supporting up-and-coming projects.
Benefits: Marketing. A lot of other projects might learn about us this way.
I also feel like this could be combined with the flash UFO system or the index fund system. Overall it would just fit nicely with our other blockzero pieces.

Why not stablecoins?
I don’t believe this would decouple us much from the crypto markets.
Yes, the correlation comes from being in a pair with eth but it also comes from user behavior. In bull market when bitcoin goes up people are excited and take profits and put it into altcoins cause they feel like everything will moon. And the expectation is that alts will do higher multiple. In bear markets, people are afraid so if they keep any crypto they keep the big ones. They sell their alts.

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Regarding proposal one:

I can’t see the upside but maybe I am missing something here? XIO is not a stablecoin, I dont think pairing it with a stablecoin will make it more stable. Blockzero is a high risk high reward kind of community, it’s current pairing reflects that, also because we develop on Ethereum. I think the price will always be volatile because Blockzeros risk taking philospophy makes it so.

Regarding proposal two:

I see options here, but a big risk is diminishing the value of XIO, since people would be able to get the same benefits with non-XIO tokens, thus making it potentially obsolete. I would however love to explore options here, since I think diversifying Blockzero with outside projects would benefit the community and its growth greatly (as is being done with the recent UMA partnership).

Edit:
Maybe we can expand the XLP program to partnered projects (like UMA)? Giving XIO-UMA the same benefits as XIO-ETH. Expanding our own reach but within projects we support, projects that support us.

Just commenting on the second proposal for now. For it to work and be constructive we’d first need better order routing in Uniswap, otherwise we’d just feed the arbitrage black hole without that liquidity actually helping anyone who swaps through Uniswap’s web interface. Hopefully Uniswap v3 will have smarter order routing!

Assuming we’ll have smarter order routing in the future so the liquidity can actually be used and we can keep liquidity from fractioning too much, I like the proposal. It’s an easy way to cross-promote and provide value to both ecosystems.

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Proposal 1:
I think we should stick with ETH. Like Mindora says above, I don’t think pairing with a stable coin will protect us from the bear. Bear and bull cycles are the natural evolution of emerging assets, and certainly a natural evolution of new projects. The only way to get “through” a bear is with a strong project, so I think that should be the focus and the goal. Which brings me to proposal 2…

Proposal 2.
I love this idea. The liquidity to volume ratio for XIO is way skewed towards liquidity. In other words, we don’t really have the volume to justify such high liquidity. Therefore, we can afford to split that liquidity, or in this case, “share” liquidity with projects we want to partner with. The mutual benefit is obvious and I think other projects would jump at this. They essentially get liquidity mining that is paid for by XIO. We can afford it and it would drive a huge amount of attention to the whole blockzero ecosystem.

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I am against this proposal.

For LPs, the question is similar to asking which asset is better to hold, ETH or USD. But the difference is that as an LP you’re forced to be exposed to two assets rather than one. So, which pair do we choose.

If you want to see the performance of USD take a look at the parabolic ETH chart and then invert it. It buys exponentially less ETH every year. We do not want to long-term exposure to such a depreciating asset. We have an option between a centralised government paper money that definitely loses value or sounder money with parabolic upside.

I understand that the problem is that if XIO is bought before ETH crashes then XIO would drop with no faults of its own. But I’d argue that, in the long-term, ETH can be more bullish than USD even in a bear market. Now is not the time to dilute the XLP and incentivise exposure to a dying asset. BRRRR.

I’m open to offering XLP incentives to other projects, anything but fiat.

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I strongly agree we need a stable coin pool that is part of the XLP program because I don’t want to see my XLP value go down significantly when we hit the next bear market. Analysts are saying the next bear cycle could start as early as 6 months from now, as late as 18 months from now. Once that starts to happen, if we only have XIO/ETH as part of XLP, my choices will be limited to:

  1. Leave the XLP program and convert to more stable assets to prevent value loss
  2. Stay in the XLP program and strap down and prepare for possibly up to 80-90% losses at worst point before next bull cycle kicks in in a few years… doesn’t sound very appealing to me. If we had a stable coin instead, this potential loss of value would be significantly less.

I would vote for the USDC stable coin. I would vote against the USDT stable coin. I am indifferent to DAI.

Per a conversation earlier today, with the UniswapV2 blackhole issue, USDC, DAI, USDT are the only 3 good stable coins choices due to being part of their 6 tokens that don’t have blackhole issues (BTC, ETH, and another I think was Maker, of the 6).

I know that I personally want to ride the ETH wave a little longer and wouldn’t want to be forced into a USDC/XIO pool today, so this makes me want to suggest we give people the choice.

Simple answer: add USDC/XIO as another official XLP pool. The XIO Team can provide a migration plan in the future on how to allow this to happen fairly and properly.

A more complicated answer might include: officially announce now that the ETH/XIO pool will no longer be part of the XLP program as of the last minute of 2021. Give people time to migrate.

If we allow up and coming projects to be part of official XIO’s XLP pools pairs, I think they will have even more volatility than BTC and ETH and we may be re-introducing a bigger version of the same problem we are trying to get away from by eventually moving away from ETH and only to USDC. That moving from ETH to other non stable coins might introduce a less stable XIO price.

I would opt for temporary liquidity mining rewards with other tokens such as “For the next 30 days we have set aside 100,000 XIO that will be rewarded only to those who have added liquidity to YAM/XIO pair”. I think this could achieve about the same end result of marketing, but without affecting the XLP program. XIO for the Liquidity Mining could come from the Foundation wallet instead of the XLP wallet. To me, the Foundation wallet funds is meant for this sort of thing since this feels to me like a marketing and promotion thing.

Random and possibly bad idea: if we went 100% only to USDC… this could give us an opportunity to rework the XLP program to be based on total USDC value. Such as: earn 10-30% per month of your Moving Average USD value. This would peg the XLP rewards to the actual true value per month, no longer based on the total XIO you happened to add at some point before, which completely ignores price value changes over time, hurting some who added when higher price and helping others who added when price was lower vs now. If we wanted to do this, I think it could possibly be an easier way to explain and implement a smart contract based solution too.

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Not a fan of the #2.

If I belong to a community X and support the token X, I would never use that token to buy another one, be it XIO. I would use eth or stable to buy it, and keep holding / accumulating my X beloved tokens :wink:

I understand the point of #1 but I’m wondering if that would really change something.

When winter will come, people will loose their confidence in crypto. They will panic sell all they can and exit to stable coin. I’m not sure people will think in $ value, they wil just sell until things go back to normal. If people sell very strong assets like ETH, smaller and less established tokens like XIO will definitely be more impacted, whatever the pair they are liked to, imo. Because of the general fear, and because XIO will be impacted as a business by the bear market.

When I see that big exchanges are heavily impacted by the market health, while they keep earning money in bear market (as long as people trade, they pay fees, whatever the direction of the market) I think that just pairing with another asset would not change much.

Will think about it again and see if I change my mind :slight_smile:

Some wise guy recommended me to never get back to an informal proposal with a formal commitment :wink:

So off the record I could see myself voting for both and neither. My first thought was, is that evolutionary or revolutionary? Either way it could be progressive, however I find it important to discuss progress in light of arguments for such changes. Pricing stability sounds good. Recalling former discussions, the index fund (if incl projects thrive) contributes to just this. Perhaps increasing non ERC projects would have a positive effect on stability.
This thought of differentiation brought me also to the second thought. Volatility is a consequence of price and demand. Securing less volatility is achieved through differentiation, e. G. investment in different assets, regions and perhaps aiming for security. Noteworthy, such differentiation does not prevent volatility entirely. If stocks go down, Gold goes up.
Another tactic is hedging versus the current market. This kind of insurance is rather expensive, however it could be an interesting option three.

Regarding the stablecoin coupling I am rather negative. Main reason is that DeFi and Stablecoin does not go well together in my opinion. It’s a bit too hypocrite for me. We aim for getting rid of central agency but if handy we utilize governmental backing of value (that is Fiat pegged stables) Of course we could be opportunistic here but then there is also the risk of inflation. That risk alone might make the XIO LP volatile. Another question would be what stablecoins to use? Gold pegged to remain neutral to countries preferences. Last there is also the risk of regulation coming.

Given the reasons above I guess I’m in favor of option two. This sounds more in line with the evolution plan for XIO. However, I would appreciate more info how the token would be aligned. If I got that right the idea was to open XIO liquidity mining with project pools? Would love to understand why projects would do this? It seems to be hard to sell.

One downside I see is the consistency. If the existing LP is sustainable we might gain more by delivering according to plan.

Appreciate the forward thinking to prevent bear market repercussions. But perhaps we could aim for different solutions to achieve better value stability?
As mentioned above could be arranged without altering the liquidity pool.
My favorite thought is though the NFT $FONDR
A token that is awarded for long term commitment to buy and keep XIO for years. As such it would be like a foundation to the XIO VC fund. That in itself won’t eliminate volatility but it could lift the bottom value to a healthy operational level.

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I think this is an approach we could take to pair xio with a stable coin so that we could have an edge in the bear market, but i was also wondering why dont we create a stable coin within the blockzero labs and pair xio to that one

Pairing our token with other tokens can be a plus in making other persons more aware especially if that token will be apart of the index fund and it will let persons see what we are doing here at blockzerolabs and it also will open us up to the risk of that token being compromise seeing that we will be pair to them in a worst case scenario.

These proposal are great ideas but i wonder what could be the worst thing if we do both would liquidity be spread too much?

Hi everyone, I am against this idea. I don’t mind if the price drops 10%.

but what I do know is that: my liquidity has increased 3 times since I added in XLP because ETH has also increased, but it’s more beautiful when both currencies go up we would have even higher profit.

my opinion is to stay on ETH because ETH has great potential in the future.

Proposal Number 1: Stable Coins
The proposal is very interesting, however I am a bit against it. I think we won’t be able to prevent bear markets (the main goal of the proposal) as I believe we would be affected by bear market even if we are not coupled to ETH. I believe bear markets people allocate their funds more on BTC/ETH or on non-crypto investments. There is also the problem of the liquidity that you mention and the fact that we lose many people that is interested or invests only with ETH or ETH-paired assets.

I think for XIO to hold value in bull and also bear markets it has to be at the epicenter of everything BlockZero does. So, as we are doing now there is the new token project airdrops, there is the XLP and XSI, there is the upcoming Index Fund, etc. I envision a future where BZ is a place like Uniswap, people can trade, stake, add liquidity, plus beyond: new projects, startup accelerator. I see it as a beacon for the future crypto. In that way, XIO would be like UNI, but with much more utility, and hence it will not matter how ETH or stable coins are doing, it will hold its value by itself.

Proposal 2: Pairing with new projects
This is a very interesting take. I would be in favor of this if it doesn’t substitute the current option and/or substantially dilute it. I think it is a very interesting way to invest in new projects, and to get cross-marketing between those projects and XIO. However, I see this as a higher risk and I would see myself participating only with a part of my XIO (so you could, ideally, decide how much XIO you want to use to support the “classical” route and how much on these more risky projects).

In the long term, bear and bull cycles should not matter as they are inherit to the market. I have suffered through bears markets simply because I believe in the project. I think this should be a mindset adopted by the community.

Offering a separate stable coin pair in addition to ETH could be an option, this may create other issues, but it would allow the “market” or XIO holders to decide what they want them selves. This would allow people to hedge their XIO holdings with a stable coin pair.

It would be hard to find the right stable coin, since each of them have their issues. We would then also inherit any problems the pegged currency faces. I believe the best way to “deal” with market volatility would be to expand XIO’s usefulness (not sure if it is possible for its desired purpose). We could create a pairing within the XIO ecosystem to better insulate ourselves from external conditions.

Paring with other projects is a good idea. XIO being the gateway into our ecosystem and our environment will increase its value and separate it from other market factors.

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Man, this is a tough one. My initial thought is that for XIO, a stable coin pairing would be ideal. The reason being is that XIO inherently exposes you to more coins through the Blockzero Labs ecosystem (projects we create, and eventually other project coins in the Blockzero Fusion Index :wink: through the Accelerator etc).

Overall, I think XIO would benefit from a stable coin pairing for the rewards. If the reward is something like 10% per month in XIO, I can only see it being a net positive for XIO. Basically, you’re stable coin is, well, stable, but you gain 10% interest on your XIO per month as a reward, which increases your exposure to riskier projects in the Blockzero Labs ecosystem. Yes please.

I know those benefits exist for ETH right now, but the whole point of this discussion is to hedge against market cycles as much as possible (impermanent loss too), whilst still increasing one’s exposure to bull market runs in riskier projects. That to me balances at an XIO-StableCoin pairing with >10% reward. Which StableCoin? USDC or DAI. I’m really not a fan of Tether.

I’m really liking the discussion throughout this thread though. Some really interesting arguments both ways.

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Do not like first option of pairing with stablecoins at all, it will simply not decouple from bear and crypto markets…if there is something like 2018 happening again, it will go down nevertheless the pairing token.

But I like the 2nd option and i think XIO token could benefit a lot. I have one example which I would like to see it pairing and would gain A LOT of exposure: Bancor Network Token (BNT)…they have been on a tier these last weeks with an outsanding growing in TVL and the new tokens being added there with full impermenent loss protection gets a lot of attention and they go up in the next weeks after being added…personally, I have been providing liquidity there since several months ago with an amazing return and with 0% impermenent loss (in Bancor Netowrk you can provide one-sided pool liquidity). And also, ah you have to remain them pooled for some weeks to get the full impermenent loss protection, XIO will have some locked tokens because of this (well, is not really locked as people will be able to remove them at any time, but in the case they remove them early they will have some impermenent loss no matter the protection, thats why all the tokens that I have pooled in bancor network are all tokens that I like to HODL and I won’t sell them in the near future…the full imperment loss protection comes after 3 months of having the tokens pooled).

Can I firstly say that the comments on these proposals are the best yet and everyone replying has really made an effort. You don’t get this level of interaction in any other project. Proposal one I’m against in theory pairing with a stable coin should help against bear markets but in reality zero will still follow the market whether it’s paired with Eth or usdt.Proposal 2 I’m for if you do a time limited pairing of around 3 months that is subsidised it’s basically like a syrup pool in pancake swap. People will get in for the bonus and should be in long enough to cover any IL. They then may or may not stick with the new project which is the idea.

Hey team, my interpretation of the intent for each COA is about community satisfaction, retention during downturns, and growth during stable/bull periods.

Option 1 Feedback:

Bottom line up front: Weaknesses outweigh strengths and ultimately doesn’t achieve the intent in my opinion.

Strengths:

  • XIO price resilience against market downturns.

Weaknesses:

  • Potentially lower liquidity.
  • Complications with changing or migrating existing liquidity.

Additional thoughts would be that you are growing a community that is more engaged than most I have seen and won’t mind seeing mid-term down swings as long as Blockzero stayed motivated and kept innovating. The people that are likely to sell during a bear market are (generally) not the ones that would get involved long term anyway.

Option 2:

Strengths:

  • Bootstrap communities.
  • Open up more LP options.

Weaknesses:

  • Negative events for the projects you partner with open up XIO to scrutiny and negatively influence XIO holders in the LP pools.

I think Option 2 is much better. It doesn’t achieve the intent completely, but it would improve community engagement.

Honestly I think you should look more at community bootstrapping with growing impressive projects (not to shill here) but like Badger DAO, and marketing options which display how awesome XSI is.

Don’t worry about the people who are out of crypto on the first down swing, retention will come with engagement and innovation!

Cheers!

#XIOfeedback

This time I have to vote no. I really think that the upside potential of this bull market should be harvested. We have a lot of price potential form the release of eth 2.0 this year or at maximum next year, and having the xio token “pegged” to ethereum’s value is important.
We will probably see a bear market at some point in time, and then we would be better off creating a liqudity pool and a liqudity mining program with the xio token coupled with a stable coin (preferably DAI and not usd tether). But that is good only in a bear market, and we are a looong way from one, at this point.
I say we stick to ethereum for now

hi!

i’m against this change. someone already stated that xio’s price would be dead since august 2020 if it wasn’t for the changes in eth price.

for the people that are giving liquiity it would be also bad: with the second coin being a stable coin, they won’t get any revenue from the appreciation of the crypto industry in general (eg: from ethereum).

also the IL would be massive in case of a sudden appreciation of XIO.

and… it would also be like transforming xio to a traditional financial asset (example: a normal share traded on the nasdaq exchange with its price in USD).

p.s. guys, i’m starting to be really concerned about what is happening to the future of XIO. this last question is kind of side/secondary problem that doesn’t add/subtract nothing to XIO project.

what is the development status for the Index? this is the real and only problem now. for the last 3 months (and maybe more) we have been only talking about flash, aqua or some “not so critical question”.

time to focus on the index and to bring a timeline for that. this is the real development, changing the trading pair is just that: changing the trading pair…

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:fire: It seem like this will be a hotly debated topic!

XIO/STABLE COIN Proposal
I really had to think about this since we are still in the bull market and many are expecting ETH to at least 2X once the gas fees are sorted out.
However, crypto has a 4 year cycle and we will probably go to euphoria that will be followed by a possible 18 month bear market.
I Agree with Steve here,

If I have two assets loosing 50-70% of their value like in 2018 I do not preserve capital for growth in the next cycle.
If however I have one stable coin with XIO, my XIO balance will increase over time if it has a pull back in the bear market.

I would also vote for USDC and not USDT!

Totally agree with a choice for citizens.

Also - there should be no penalty of your multiplier if you decide to move from one XLP to another.

OTHER PROJECT IN XLP PAIRINGS?
I would vote against this
This will add volatility to the XLP and it would be even worse in a possible bear market.
It will also have higher risk for impermanent loss.

Thank you for a for relevant topic/proposal
DrLuke
:stethoscope:

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