Jan 10, 2021

3 min read

Introduction to XStable

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?

How it works

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?


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?