XStable is a new form of a synthetic commodity that operates with a free float that over a longer-term achieves stability and forms a volatility hedge across a basket of cryptocurrencies as well as fiat currencies. It allows the market to freely drive its value while using a part of that information to adjust its supply to create an equilibrium between value and supply.
What makes Xstable different?
Unlike ampl which operates with fully fluctuating balances or ESD/DSD which continuously dilutes the holder's equity, XStable is an elastic money protocol that operates with continuously accruing balances akin to dividends that increase the holder's equity in the ecosystem continuously. At the same time, expansion and contraction factors operate with free-market mechanics that adjust the overall supply to achieve equilibrium without punishing the holders.
How it works
- Targeted Asset Liquidity:
Create XST-ASSET AMM pools for assets targeted to provide volatility reduction against. These pools will support protocol features such as supply expansion and burn.
2. Demand triggers Expansion
Any buy order in supported pools, which is the indicator of demand triggers a supply expansion of at least 1% of the buy size that is distributed to all the holder wallets instantly as part of the same transaction.
3. Lack of Demand triggers Contraction
Any sell order in supported pools and all transactions elsewhere, are taxed by at least 1% to the seller as network utility fee and is burned permanently causing a supply contraction.
4. Liquidity Accumulation
Balanced levels of liquidity need to be managed across the chosen pools to achieve a balanced volatility hedge. A 0.5% tax on sells and other transfers to unsupported pools is charged. This is converted to permanently locked liquidity in the pool that is lagging in liquidity.
5. Counteracting Time-localized Shocks
Quadratic expansion and contraction functions provide accelerating incentives to hold and sell, the further it destabilizes from equilibrium in each epoch.
6. Stabilization Reserve
2.5% of each supply inflation goes into a stabilization reserve. This steadily grows over time and is used to market buy or market sell XST when the demand or supply shock is substantially larger and cannot be counteracted solely with incentives.
Why does it work?
Epoch based elastic supply that maintains stability in balances, time localized price, and holder equity targets true stability. Before an equilibrium phase is achieved, a set of expansion and contraction phases will take place due to fluctuating market demand. “Holders” or participants of the XStable ecosystem increase their net equity during these phases while market searches for the equilibrium in price.
Comparisons
Traditional Rebase — Balances frequently fluctuate. Not good. Holders retain equity in the supply. Good.
Seigniorage — Balances do not oscillate. Good. Holders lose equity in the supply. Not good.
Xstable — Balances will never decrease. Good. Holders gain equity in the supply. Also Good.
Stability in Balances, Stabiliy in Equity and Stability in Value.
What’s next?
We will be launching our token sale via a limited presale on January 14th along with Uniswap listing following shortly after. There are no whitelists for the presale. Please join our telegram for the most up to date information and do not buy any tokens claiming to be XStable unless it was posted by us in the telegram linked below.
