XIO Treasury and Business Model | What Toll Should We Set for the Launch? #3XIOsocial

Quick disclaimer before we dive in that may not have been clear in the video: The XIO protocol guarantees that Stakers retain 100% of their original stake token balance. There is no fee of any kind to stake on XIO. You will always be able to withdraw the full amount of what you choose to stake. The XIO “Toll” mentioned in this video is only referring to the split of generated rewards between Citizens and the Treasury.

Full Video:

Hey everyone, welcome to the first ever post on the official XSI Forum! This is still new to us to we ask for your patience as we figure out how to use this open source software (Discourse) and as we create more discussion channels/topics to choose from. Huge shout out to @jorn for taking the lead on this project and recognized the need for more organized conversations. A few items we want to try here is allowing a full week to response (instead of 72 hours) and try to only have one large discussion per week.

Today we have a very important topic and question that is sure to impact the long term sustainability of the XIO Network and token. As always, we would love your feedback and input on the subject. If you would like to earn XIO Social credits on this topic, you can comment directly here for 3x the Credits, or on XIO’s Youtube/Twitter. Let’s dive in!

Realizing in the early days that XIO needed a scalable and sustainable token model, the XIO Treasury was created.

In short, the XIO Treasury is a decentralized index fund of assets that are only redeemable by the burning of XIO Tokens. Similar to YCombinator having equity in multiple different startups, the XIO Treasury holds ownership of decentralized assets to up-and-coming blockchain startups.

However, one unique characteristic of the Treasury: The only way to redeem tokens from the XIO Treasury is to burn XIO Tokens.

This model ensures that the XIO Token has a diversified and foundational basket of underlying collateral. Additionally, if the assets within the XIO Treasury appreciate more than the XIO Token itself, the XIO token is likely to offset newly minted tokens and become deflationary in nature.

The only way the XIO Treasury is able to acquire assets is through the XIO Toll. The XIO Toll is reward taken by the XIO Treasury when new altcoins are acquired. For example, if the XIO Toll percentage was at 50%:

  1. User stakes 100 XIO for 365 Days to earn LINK
  2. 10 New XIO Tokens are generated and swapped for 5 LINK
  3. 2.5 LINK would go to the Citizen
  4. 2.5 LINK would go the XIO Treasury

There are many pros and many cons to a low or high XIO Toll. Some of the ones we have identified so far (need your help dissecting and challenging these assumptions) are:

Pros of Low XIO Toll

  • Higher potential interest per Citizen
  • Staking decisions only affect the staker

Cons of Low XIO Toll

  • XIO Treasury is not funded
  • Every Citizen for themselves attitude
    Less Sustainable Token Model

Pros of High XIO Toll

  • Sustainable and Increasing XIO Treasury revenue
  • Collective staking mindset

Cons of High XIO Toll

  • No immediate gratification rewards
  • Group decisions impact the individual
  • Less individual stake interest per Citizen

This brings us to our #3XIOsocial question:

What percentage Toll should the XIO Treasury take at launch?

0:00: Intro
2:30: What is the XIO Treasury?
3:55: What is the formula to calculate XIO Treasury rewards?
4:44: What is the goal of the XIO Treasury?
5:50: What is the XIO Toll?
6:42: What are XIO Public Portals?
9:18: What percentage should the XIO Treasury take as a Toll?
9:45: Pros and Cons of 0% XIO Toll
11:54: Pros and Cons of a 100% XIO Toll
14:45 Launching the official forum for XIO Social!

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Looking forward to understanding which people and entities are in the Treasury and how they were appointed. Brilliant idea to create this. #xiosocial XID 51F4B

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While I totally understand the risks of having a low XIO Toll rate to long term sustainability(base price) of XIO, Here are my thoughts:

  1. The base rate for XIO toll should be roughly around 30%-40%(as the standard highest tax bracket)…This allows for the citizen to still get the 60%-70% share of the stake and hence would not discourage citizens to stake the tokens .
  2. We first need to make the staking platform enticing enough for the flood of new users to join in and help the new startups. the 60%-70% citizen share of the stake would help here.
  3. If we see too many people staking and unstaking, we can either:
    a) increase the toll to make it unsustainable for the citizens trying to play around with it
    b) (preferred option) we should not allow more than 1 or 2 early unstake per startup per month/quarter so that people are not trying to play the stake/unstake game.

XID-6CCb5

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I’m a little curious as to why we even need to present this as a “toll”. It’s a negative from the user perspective. Nobody likes taxes. Zach and I had a Twitter discussion about YAM’s rebasing which hid a 10% tax in it that would go to a Treasury, which could be used much like this one is being proposed. Doing it in the rebase is a great way to hide it.

Anyway here’s what I’m saying. XIO controls the interest rate because XIO is minting the XIO tokens being issued as the flash stake. What you’re proposing is that some of those XIO tokens issued by the dapp…would turn around and flow back into this XIO Treasury. But why does it have to be considered a “toll”? It’s more like a “match” program.

Let’s say XIO decides to set up ALGORITHM X which decides (via whatever method is ultimately settled on) that the interest rate for Flash Staking today is 15% APY. The point is XIO decided that. You don’t have to present the end user that 15% APY and then say, “Oh, sorry, I’m clawing back 5% of that as a tax so you only get 10%.” You don’t have to, so why do it?

All that needs happen is in the BACKGROUND your dapp mints 5% more XIO tokens, which are converted into whatever Mr. Flash Staker decided he wanted to earn back when he flash staked. At that point you look at the Treasury as a momentum based token Reserve that reflects what stakers believe are the most desirable tokens to earn at the moment.

XID-5FED

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Investors vs Speculators

The goal should be to draw the investor that want to stay in the startup for the long run so they can be part of the very big gains in future.

Yes you need funding and liquidity in the short term but the XIO toll should be decided with a long term investor view in mind.

I agree that 30% could be used and even more but then with an option of sharing in the profits/dividends of the startup in the long run.

Thank you for the video and open way you conduct this at XIO.

XID-f56A0

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It’s hard to come up with a number without knowing the cost of running the operations.

I feel that we need to get deep into the figures before discussing the toll in any direction, I can agree with “Saurab” above that a 30-40% toll sounds okay, but my general opinion on taxes is that it should be used to cover the cost for the very basic needs in a society and all excess should go to the people so they can bring even more value. If “the cost of running the project” is the equivalent of a 5 percent, or a 50% toll, that should be the dedicated ammount.

I could even agree on a 80+% toll here in V2, too really give the token the best possible start, we are in fact the “early” investors and if we want to build something sustainable this might be the correct way to do it, but in any case it needs to be very transparent what this toll will bring value-wise in the longterm perspective.

I’ll go read some case studies on taxation to get a more scientifical view on this instead of just opinions passed down from father to son…

/JJW

Well, my personal answer is a high xio toll. If I had to choose, I prefer to hand out my % share of reward to the xio treasury as they will probably make a better use of that value than me ahah. And it will probably hodl better than the average user.

I think that the till should be around 20%. High enough for a good reveniew to the treasury, but still not too high so that users feels rewarded XID 5D95B

I think that more than the cost of the operation, we need to know how much volume the staking platform will generate. If the volume is in the order of the millions of dollars per month, the toll could be small, as the treasury would still get enough money and value. The toll should be adjustable week by week.

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First of all, congratulations on a new and cool looking forum. My initial thought is to make it fair and go 50/50. But then scam projects would cause a lot of damage to Citizens and treasury.
So let’s add another treasury that converts 1% of fees into XIO daily, which would act as a safety net and would grow as long as people keep staking.
When there is a project that dies with its token, there will be no drama as Citizens can instantly unstake their XIO without incurring a loss, due to the safety net taking care of it. Perhaps it could help the treasury in some way too.
All in all I’m proposing a 50/49/1 split instead (Citizens, treasury, safety net). The fees could be too high for Citizens, but I’m sure startups would be very happy and a safety net would help Citizens avoid losses. XID-3749

I would like to thank the team for the very clear video and explanation.
I agree that it is difficult for us to determine the toll rate as many of us do not know the operations and fundamentals behind this project as well as the team does. What we would like to see is for the company to be sustainable in the long run. Therefore, if a high toll value is required that so be it, but i believe the citizens also do want to see good returns in the long run. Therefore, i will support whatever toll % that the team views appropriate but we must also look out for both big/small investors.

XID-f879C

Yes I agree - this is what I mean with going deep into the figures.
Some forecast models could easily be produced (most likley already exists behind the scenes)

/JJW

The thinking could expand here and create separate ‘vaults’ within the treasury.

Each vault would have that specific strategy of either high or low toll. Additional strategies can also be added as opportunities arise. Additional vaults could be associated with each startup. Pools could be added as vaults. Balancing bwt pools yet another vault. The possibilities expand with time and ‘withdrawal fees’ from a vault as token burn goes into that vault. This way early exits do not penalize ‘strong hands’ but rather rewards them in a sustainable way.

This way there is flexibility and more resiliency built into the ecosystem and a feedback loop to direct capital flow.

Nice forum!

How about 100 % in the day, 0% at night, or vice versa, 12 hour cycles.
Alternatively 100 % during the week, 0% on weekends.

If these suggestions are not possible or too outrageous I think 30% is the perfect ratio.

Keep up the good work all!
Loving the creativity

Darryl

Well, the totality of all the sub-treasuries should still be a “high” or “low” toll. But I like the idea of well labeled treasuries with a designed purpose, so that we could see how the "money"is spent and decide which treasury gets more or fewer toll shares

Yes toll could be reframed as ‘matching contributions’. I imagine it’s more of a tax implication of income vs expense. Income further distinguished as capital gains vs interest income.

I think adding yet another term in the DeFi space isn’t really necessary. How about a (%) withdraw fee? It accomplishes the same effect.

Thanks for the vid. I’m here to watch/learn. I don’t have much to add to the discussion yet. But I think what XIO is doing is pretty awesome. I am curious how other than the flash stake part, things differ/are the same from what TrustSwap is doing in terms of a treasury? I’m new to all this stuff so bear with me :slight_smile:

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I think most people approach this topic wrong or misunderstanding the Treasury.
The toll is not really a tax in my opinion. That thing isn’t paying anyone a payroll. And that toll isn’t going anywhere. The Treasury belongs to the citizens, who hold XIO just like Zach explained.
If you stake and a toll is taken for the Treasury, you also get a share of that toll since you could burn your tokens and take it out. The “tax” goes right in your own pocket.
The treasury is more like a underlying asset which give the XIO Token actual Value! The bigger the treasury, the more is your XIO worth.
That means, you get less instant gratification when staking but in the long run, you create Value, without putting your XIO at risk.
Also, a strong treasury is a huge sign wich attracts new startups, citizens and investors.
It gives trust and grows the network for sure!
Maybe even the Token price gets somewhat pegged to the underlying assets in the future. How cool would that be? Thats some next level stable Coin with REAL underlying assets. Not some made up stuff like other stabels!

If i have to make up a number it would be atleast 30%. I wouldnt mind a 100% to make this thing grow in the short term but i guess the majority of people wanna see their rewards instant in the wallet.

I guess we have to start anywhere and adjust this number according to how people use it. I don’t think it has to be a fixed number at all.

2 Likes

Something that should also be a topic of discussion is more of a dive into the idea of WHICH tokens should flow into the Treasury.

Should it just be a copy of whatever people are flash staking? There’s merit to that. It’s a bit like decentralized governance, you let the market decide what tokens they consider most valuable.

But something tells me you might want to keep more from the private portals than from the public portals, and really make this treasury speculative. If you’re keeping only 10% of the minted XIO tokens in the Treasury (in the form of XYZ coin, etc)…and those coins start 10x’ing…you’ll have bolstered the XIO price by quite a bit.

I know we’re going to talk about flash staking interest rates next week, most likely. But maybe something like 15% flash staked interest on the XIO token plus 5% in the form of an XIO-Treasury voucher on a 3-month lockup that gives you the right to an equivalent draw on the treasury. It’s like receiving interest plus an equity-kicker.

XID-5FED

Can someone diagram this? Visuals always help.