Thoughts on proposal to utilise XSI rewards to boost XIO's liquidity every month. Receive XSI rewards in UNI-V2 tokens instead of XIO

Proposal to utilise XSI rewards to boost XIO’s liquidity every month. Receive XSI rewards in UNI-V2 tokens instead of XIO

As it stands XSI rewards are paid out to a citizen’s whitelisted address each month based on their XSI leaderboard rank.

At the moment the XIO rewards the citizen receives can be added to XLP, held or sold.
There is no guarantee they are going to add it to XLP and they may sell the entire reward.

What if, instead of paying citizen in XIO, citizens are paid in UNI-V2 tokens from the XIO/ETH pool which the foundation buys each month (using the XIO rewards citizens would have normally received from XSI).

So say if the total breakdown of the reward payout each month for the entire XSI leaderboard equates to $30,000, the foundation sells $15,000 XIO for ETH and combines this ETH with the remain $15,000 XIO to add to the XIO/ ETH liquidity pool.
The foundation receives the UNI V2 tokens and then distributes a specific % of these UNI-V2 tokens to each citizen, based on their XSI rank for that month.

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The benefits I see

•It could gradually boost liquidity each month by automatically adding XSI rewards to XLP.

•Increased liquidity reduces slippage which could make XIO even more attractive to larger traders/ investors.

•Potential to reduce sell pressure in the long run as any citizen that wants to sell the UNI V2 tokens, would lose their XLP mulitplier they have spent many months building up (if they have already added to XLP in the past).

•Potentially locks up more tokens, which should have a positive effect on price of XIO.

•Ensuring XSI rewards are added to XLP, creates a passive XSI reward payout for citizens through XLP monthly payout. The more months a citizen participates and ranks on the XSI leaderboard, the larger the compounding effect it has on the passive rewards they receive.

•With the new proposed XIO token studio, any funds in XLP would automatically start liquidity mining the next token the token studio develops.

The negatives I see

•There would be a consistent sell pressure of a fixed amount each month by the foundation, although the boosted liquidity and reduced slippage sensitivity this creates, would make this sell pressure each month have less of an impact on XIO price .

•Citzen’s may not like that if they want to sell their monthly XSI rewards, they lose any existing XLP multiplier they may have.

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Summary of above:

What are your thoughts and opinions for if XSI was used to boost XIO’s liquidity each month by a citizen receiving UNI-V2 XIO/ETH pool tokens as an XSI reward instead of XIO tokens?

3 Likes

I think this could be interesting as an opt in option, but not mandatory one.
The benefit of the opt in option would be that we don’t need to pay gas fees to put the money into XLP.

I do not like the sell pressure. Also we are forcing people to do XLP. Some people might just want to hold XIO and not be exposed to impermanent loss. Your strategy would forbid these people from getting XSI rewards.
Not only will people lose the multiplier when they withdraw XSI rewards, but they will also lose a reward for one full month, which can be quite substantial for XLP and much higher than any XSI rewards they get.

1 Like

Lots to think about, great response!

That’s a good point. Could be quite beneficial for someone who is already adding to XLP monthly.

Me either although my thinking is that even though half of the XSI rewards being sold for ETH to add rewards to XLP, the fact there is a multiplier for XLP it could lead to less sell pressure overall as the multiplier should reduce the number of people tempted to sell. Short term there may be more sell pressure though through foundation selling some xio for ETH to add to XLP.

My thinking is holding provides no value back to the network unless you stake with those tokens instead.

Impermanent loss at present is overcome by XLP rewards if held in XLP for a specific time period, time period depends on XLP rewards rate.

Also if XSI rewards go into XLP, the citizen receive XLP rewards ontop of these XSI rewards and these rewards is compounded monthly by receiving more XSI rewards into XLP.
As seen with the round 1 competition of the Dapp, compounding could quickly make a big difference to your overall holdings.

Say of the citizen XSI reward for that month would have been $1000 in XIO, the citizen would instead receive $1000 worth of UNI V2 tokens.
They still get the XSI reward straight away to their own wallet just not directly in XIO.

On top of that, those UNI V2 tokens will generate monthly interest through XLP rewards. So the citizen would be receiving interest on top of their XSI reward each month also.
If XLP interest rate was 10%, in 10months the citizen could double the value of that $1000 XSI reward to become $2000 worth (not taking into account the multiplier which would may it take less time) .

It would also benefit liquidity of XIO.

I actually see this as a big benefit as people would be less willing to extra them from XLP which should help reduce long term sell pressure of XIO.

Also another new huge benefit I feel receiving UNI-V2 tokens as XSI reward is down to the new proposed XIO token studio.

With the XIO token studio, any funds in XLP would automatically start liquidity mining the next token the token studio develops.

“If you have funds in the XLP, you do not need to move these . In fact, if you keep your tokens in the XLP, you will automatically begin liquidity mining the next token that comes through the token studio starting January 1st.”

Say of the citizen XSI reward for that month would have been $1000 in XIO, the citizen would instead receive $1000 worth of UNI V2 tokens.They still get the XSI reward straight away to their own wallet just not directly in XIO.

I see what you mean. But imagine a person does not have any money in XLP, just in XIO and then they get the Uniswap pool tokens. They most likely won’t get 2 eth worth of rewards therefor their reward will not gain them any money and their reward is now subject to impermanent loss.

You do make good points about the rest.

I guess I just dislike the fact that with the XLP in order to withdraw anything you lose one full month of rewards and if we combine XSI reward into it we are “forcing” people to stay locked in with their rewards.
Like imagine someone has 3x multiplier, well then they have to be 3 consecutive months in top 10 in order for it to be worth for them to withdraw the rewards (because the XSI rewards will equal what they would get that month from XLP).
This I think might deter some people.

I am curious what others think about this, cause it is an interesting proposal.

1 Like

I agree with @Mindora on the opt in approach, otherwise I think there’s merit to what you’re suggesting. I personally hold non XLP XIO in my wallet as I want to consider options in Flash without tapping into XLP and potentially resetting reward. Opt in empowers the user. And perhaps building on the idea further, the user has option to opt in only a % of the XLP rewards. I would do this, say opt in 50% of rewards automatically into XLP.

The part I’m unclear about is the ownership aspect of UNI tokens if XIO are the ones purchasing.

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The part I’m unclear about is the ownership aspect of UNI tokens if XIO are the ones purchasing.

I wrote that wrong I meant uniswap pool tokens.
Note: I edited the previous post to make it clear.

I believe the XLP serves it’s function to negate impermanent loss to a degree.
Due to it’s lock-in effect however, it should not be used in conjunction with anything else, such as the XSI. The XSI especially I see as a sort of side-gig and one might require this “pay” to be dispensable to be able to put in the time.

1 Like

That’s is another good point I did not think about before you mentioned it.

With the UNI-V2 tokens the citizen receives as an XSI reward, these will start liquidity mining the tokens the XIO token studio creates. This could potentially generate a rate of return greater than the impermanent loss. So even if the citizen had not met the minimum requirement to receive XLP rewards there would be a mechanism counteracting the impermanent loss.
If the citizen buys enough ETH and XIO to add to the XLP pool to meet the minimum requirement then this could activate XLP rewards on their UNI-V2 XSI rewards which would be an additional bonus mechanism counteracting against any impermanent loss.
These received XSI UNI-V2 XIO/ETH pool tokens would also accrue pool trading fees which is another bonus.

In my opinion the citizen would likely gain more money than they could as the current system stands as there would be more mechanisms in place counteracting impermanent loss, liquidity mining of XIO token studio tokens using UNI-V2 tokens and less sell pressure long term from citizens due to not wanting to lose XLP muliplier which could possibly boost XIO token price.

That same mechanism is what is really benefiting the liquidity of XIO. Without the rule in place where you lose your multiplier if any withdrawal is made from XLP, I believe XIOs liquidity would be far worse off. This would lead to more slippage on trades and likely a negative effect on token price.

The citizen would not be forced to be locked in with their rewards, they still have the option to withdraw them, it would just be at the expense of losing their XLP multiplier which would make a citizen think twice before doing so.

I can see how it seems forced but at the same time the citizen still has the option to sell the XLP rewards generated from their receive UNI-V2 XSI rewards (if they met the min XLP requirement) and/or sell the tokens they received through liquidity mining XIO token studio using XSI UNI-V2 tokens if they wanted to. It still gives alot of freedom to sell the rewards generated by the XSI rewards rather than the XSI rewards directly in my opinion.

If the citizen has a 3x multiplier they would be receiving XLP rewards to their wallet. The XSI rewards would compound their XLP rewards to make them receive a larger value in XLP rewards. The XSI UNI-V2 tokens would liquidity mine XIO token studio tokens. These additional benefits for the citizen in my opinion, should make it less likely for them to need/want to withdraw those rewards. If they do still want to/need to withdraw, they can do so just with the loss of the XLP multiplier.

If in future citizens could stake their UNI-V2 XIO/ETH pool tokens that would be fantastic, as then the only reason any citizens needs to withdraw those XSI rewards from XLP would be if they were to sell their tokens in my opinion. This is what needs to be reduced.

Thanks. I’m interested what others can build on it and think about it also.

I’m the same, I hold more XIO in my wallet than in XLP at the moment due to holding some back ready for staking and not wanting to reset XLP multiplier.

If in the flashstaking dapp citizens could flashstake with any XIO/??? UNI-V2 pool tokens then that would work perfectly with this proposal. No need for a citizen to hold XIO in wallet then, other than if they are planning on selling.

This can be true, it does empower the user but at the same time empowering the user for everything can be detrimental to a network

At a protocol level I believe some features need to be mandatory with no opt in to make a network more sustainable. For example, fees and inflation of ETH network does not allow people to opt out, the user either accepts that is required for the network to be more sustainable or they just don’t use the network and go elsewhere. Along with, fees and inflation (if they are required to sustain a network), i believe rules on liquidity should not be an opt in or opt out thing.

For ETH, without fees there is unlikely to be any transactions processed, without inflation there is no staking and overall a network which isn’t sustainable.

Similar thing for XIO, without XLP there is no liquidity with no liquidity there is no network.

Technically the XLP is opt in but the rules of it are not. The same for XSI can be done. Taking part in XIO social is opting in but the rules should be mandatory in my opinion to benefit the network as long as it is not too much at the expense of the user which i don’t think what i’m proposing will be.

I believe any reward a citizen is entitled to through their actions, should at the same time benefit the liquidity of the network whether that be through XIO bounty hunting, XSI, a future XIO competition. I believe great leadership, community and network liquidity are the 3 keys to XIOs success.

I like this idea if 100% if XSI reward going to into XLP is not an option.

They can transfer the UNI-V2 tokens to your address the same way they would do with XIO XSI rewards at the moment or there could be a claim feature through the XIO website or dapp similar to how UNI tokens were claimed. The difference for the second possibility being the user pays the gas fees when they want to claim rather than the foundation paying the fees.

That is a fair point.
What could be dispensable though is the XLP rewards the UNI-V2 XSI rewards generate along with the tokens recieved through the XIO token studio by the UNI-V2 XSI rewards liquidity mining them. These 2 together could be whats dispensable whilst benefiting XIO liquidity.

The proposed method would force LPs to take their rewards directly as UNI/LP tokens which I think is unacceptable. The LPs are already taking a great risk in providing liquidity to the project and the rewards should be theirs to do as they please. My understanding is that the LPs would get the new token and yes they could redeem this but then their multipliers would be lost - essentially forcing the backbone of the project in a certain direction…

I think this is something that could be offered on an opt-in basis as mentioned by some of the other citizens above but this is not something I would want to see become mandatory. There are definite benefits for the project as listed in the original post but there has to be a balance between the project longevity and risk for the stakeholders - I feel like this proposal is removing all the risk for the project and transferring this to the LPs which could result in the majority of liquidity being removed.

All that being said, I am not a fan of this idea and I would believe a large majority of LPs would also not be a fan of this idea.

2 Likes

I don’t think my explanation is very clear in the proposal, I’ll have to rectify this tonight :+1:.

XLP providers would still receive their rewards as XIO as normal no forcing here.

XLP providers would just receive a larger reward if they take part in XSI also as it is XSI rewards which would be paid out in UNI-V2 tokens and these tokens would compound their XLP payout in XIO tokens.

In terms of XLP rewards there would be no change, citizens can still do as they please with these XIO rewards as they have already taken great risk like you mentioned helping the liquidity of XIO.

Just to clarify:

  • LP’s would receive their XLP reward in XIO as normal, no new token.

  • Anyone taking part in XSI would receive UNI-V2 tokens as an XSI reward which would increase the holding in UNI-V2 tokens that any XLP provider may already have as a result of them adding to XLP.

  • These UNI-V2 tokens received as XSI rewards would generate additional XLP rewards for XLP contributers, paid out in XIO and these same UNI-V2 tokens would begin liquidity mining new tokens developed by the new XIO token studio.

  • The freedom is, that the rewards the XSI rewards generate would not be tied up. The citizen can do as they please with them, with no loss of XLP multiplier. Only selling or transfering UNI-V2 tokens would effect XLP multiplier.

May be a good option. Would be interesting to see how many would choose to opt in or out.

I agree, there has to be a balance. In my opinion what I am proposing creates less risk for stake holders in XLP and further benefits the longevity of the project at the same time:

  • XLP providers would have more mechanisms counteracting impermanent loss than as it stands at present if they take part in XSI also.

  • Rewards from XLP providers taking part in XSI would compound their XLP reward which would still be paid out in XIO to do as they please with it.

  • Liquidity of the network would be boosted by those whether they take part in XSI, XLP or both rather than just XLP alone.

I’m not sure what risk you are referring to in terms of the project? I may be missing something.

Change can create uncertainty and fear I agree, this is if there is not a full clarity on the effects a change could bring and therefore an incomplete understanding on the effect it could cause.

I have ≈37% of my holdings in XLP.
In my opinion I would be earning even more through XLP with this proposal, with less risk whilst boosting liquidity for the network with XSI also which gives me more incentive to keep funds in XLP even longer.

Thanks for the feedback. So far it seems the majority are not to keen on the proposal at the moment :grinning_face_with_smiling_eyes:
I’ll improve my explanation on effects in proposal and see if this improves things.

1 Like

Having read the thread and the responses underneath, Its a pretty interesting proposal,
I have some thoughts on it;

  • I agree that if XIO were to put this in place, It would absoloutly have to be opt in only because not everybody would be in a position to receive all their tokens in their rewards in the form of Uni V2 tokens. And if people want to sell all or a portion, then they would have to withdraw, losing their multiplier.

  • Also, i think initially, the sell pressure by the team selling for ETH would also dissuade people who didnt like this approach. I can kind of see how you predict the long term benefits due to increased liquidity in the pool but i think medium to short term, its going to add too much stress to Liquidity providers to be viable,

  • We’re at a point in time with XIO where things are very dynamic and many things evolving/changing, so i think we should avoid adding more complexity with the XLP, as people have already decided to partake in it based on the parameters given before. Zachary had a tweet recently about the importance of “adaptability vs immutability”, or something like that, which was a great question, i could be misremembering but that was the jist. Basically, with so many things changing, adding more variables to the teams workload and the amount of things for participants in the community to digest is not the best idea. For me the XLP should remain unchanged, but i like your thoughts as a talking point, its a pretty interesting thread.

2 Likes

This is an amazing idea. Because in this way we can avoid dumpers that ruin the market. and in this way we can gain with transactions. I see only positive things and no negative.

1 Like

I can’t say I dig this proposal at all.

Yes maybe it could create a more steady price for the token as the sell pressure reduces, pool grows etc, but for project to enforce it’s citizens to add their “gains/rewards/payouts” call it whatever you want, to any of it’s support functions could very well lead to a distaster.

Some people do exactly what you are writing down, some people sell, that is the beauty of a free market, For you, me or the project itself to tell people what to do with there money is just insane and something that have been tried in many countries around the world with very disappointing results.

2 Likes

I think it’s a good idea in theory but in reality it’s not practical. It would cost the foundation to sell xio for Eth then again to add liquidity and then again to send out. People would also complain due to movements that they didn’t get enough lp tokens.

1 Like

In my opinion I don’t see there to be any difference between what i’m proposing for adjusting the reward structure and the recent XSI reform where citizens reward rates changed from being up to 10% of all XIO holdings per month, to a now maximum of $1000 in XIO. Both have the intention to benefit the network which is great in my opinion. The recent XSI reform cut the rewards, what i’m proposing would not cut the rewards. The citizen would just receive the reward in a different form.

This is true and i see your point. The fact that the rewards from XSI in this proposal would be in the form of UNI-V2 tokens, citizens may feel they can’t sell them as they would not want to affect their XLP multiple. This point you made has been echoed by many others in the responses above. It’s quite clear that this is the main issue with the proposal and unless this problem is solved, it is unlikely to ever be seen as positive by a majority.

If there was a way for a citizen to sell the UNI-V2 tokens they received as an XSI reward, then I feel the opinion of many may change.

I’m not sure if what i’m about to propose is implementable but this is what i think could overcome this problem;

For every UNI-V2 XIO/ETH pool token the citizen receives from XSI, the citizens receives an equal number of XSI reward NFT tokens. These tokens are programmed so once received the user cannot send them out of their address themselves. These NFT tokens monitor the UNI-V2 tokens they hold. The number of XSI reward NFT tokens the citizen holds, indicates how many UNI-V2 tokens they are allowed to sell without affecting their XLP multiplier. If the user sells any number of UNI-V2 tokens then an equal number of these NFT tokens are automatically burned at the same time (or automatically recalled back to the original contract address they were sent out from, whatever is possible to implement :slight_smile: ) .

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Example:

Citizen earns $1000 worth of UNI-V2 tokens from XSI in a single month.

The citizen already holds 50 UNI-V2 tokens.

The citizen also already holds 20 XSI reward NFT tokens.

After receiving this month’s XSI reward, the citizen now holds 80 UNI-V2 tokens and 50 XSI reward NFT tokens.

As the citizen holds 50 XSI reward NFT tokens, they can sell up to 50 UNI-V2 tokens without effecting their XLP multiplier.

The citizen decides to just sell 20 UNI-V2 tokens. 20 XSI reward NFT tokens automatically get burned when this transaction is made and their XLP multiplier is not effected.

After the previous transaction, the citizen now holds 30 UNI-V2 tokens and 30 XSI reward NFT tokens.

The citizen sells another 30 UNI-V2 tokens without effecting their multiplier. If the citizen had sold 31 or more UNI-V2 tokens, then the citizen would have lost their XLP multiplier.

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None of the above would give any addition work to the citizen and would allow them to sell their XSI reward as normal without affecting their XLP multiplier.

Perhaps XIO.to could indicate how many UNI-V2 tokens the citizen is allowed to sell before their XLP multiplier is lost so it is clear. Either that or the citizen could just check the NFT token count on Etherscan. Also there could be an NFT token for the XLP multiplier which is automatically burned after the XSI reward NFT tokens interacts with it, if the citizen sells more than their allowance of UNI-V2 tokens.

I would like to think the above would make things easier to be automated also so less admin work but I’m not a developer so cannot confirm.

This is true, it would cost for the foundation to sell the XIO for ETH. It should work out cheaper than the present system though as this 50% XIO sell for ETH would be of the total rewards earned by citizens through XSI in a single month so could be done in a single transaction each month.

Also like what is being proposed as a way for citizens to claim FLASH tokens, XSI rewards could be claimed in the same way. This would be the citizen instead pays the gas fee to receive their reward. The citizen could leave their reward build up over many months and withdraw at a later date if they want to save on gas.

To summarise all of this, it should basically cost the foundation way less than it does if that proposed above is implemented.

The same would apply to the new reformed XSI reward structure where pay-out is no longer on a % of holdings just in $ value. The amount of XIO received will fluctuate.

With this proposal that is true, the figure could fluctuate but this should be expected with most reward in crypto due to volatility. Only if a $ valuation of a reward was paid out in a $ stable coin, then it should not fluctuate.

It’s a great idea, but the only disadvantage for us is that if you want to take profit, your multiplier is reset.

This problem could potentially be overcome with NFTs to allow the differentiation between UNI-V2 XIO/ETH pool tokens from XLP and ones earned through XSI. Every time a citizen receives UNI-V2 tokens through XSI they receive and equal number of NFT XSI UNI-V2 tokens that have no value. These NFT just indicate give your allowance on how many UNI-V2 tokens you can transfer out of your wallet or sell without losing your XLP multiplier.

This would allow citizens to earn UNI-V2 tokens through XSI and sell them without losing their XLP multiplier.
These UNI-V2 tokens could potentially liquidity mine new tokens developed by the XIO token studio also.

I appreciate the time you took to address all the points in my post.

I have read through your post and I believe you are proposing no changes whatsoever to the XLP program. I believe you are saying the XLP rewards would stay the same HOWEVER, any additional rewards a holder gets from XSI (the social initiative) should be paid as uniswap liquidity tokens rather than XIO?

The point I was getting at here was that such a proposal would reduce the risk for the project since there would be more liquidity available but at the same time increase the risk for the liquidity providers since it would make more sense to keep adding into the LP based on the rewards which is essentially “transferring” the risk from the project to the LPs.

At the moment as it stands, once you receive XIO, you can do whatever you want with this. You can choose to add to the LP, you can sell or you can continue holding. This is very flexible. If we paid these rewards in liquidity tokens, if the user sold these tokens, they would have effectively removed liquidity and would no longer be eligible for rewards. This means the only option for the holder is to keep a hold on these rewards which traps them…

I like the idea of this but not so much the implementation… I understand what you are trying to achieve but I just believe it could alienate current providers. As I have mentioned before, I am a big fan of incentivising rather than penalising holders. We could maybe offer LP’s the option (not limited to these):

  • Option 1 (current): Holder gets X amount of XIO
  • Option 2 (proposed): Holder gets (X + 10%) of XIO in liquidity tokens but you cannot sell these otherwise your XLP bonuses and multipliers will reset

Such a system would allow us to keep things as simple as possible whilst still implementing the changes you suggested. The idea of implementing NFT’s to track as mentioned in the above posts is making this idea too complicated in my opinion.

That being said, we already have the XLP program which is designed to incentivise LP’s to provide liquidity. These changes are essentially just increasing the rewards for the higher levels of risk the holder is willing to provide.

1 Like