XAV Tokenomics
Last updated
Last updated
The driving force behind the Xave protocol is the deployment and use of stablecoin liquidity, and the XAV token plays a key role in creating an incentive loop between the protocol, stablecoin issuers and liquidity providers (LPs). XAV is built to the same specifications as the Balancer (BAL) token, which includes a mechanism for locking XAV to mint veXAV (vote-escrowed XAV)*. Minting of veXAV is necessary to earn fees generated by use of the Xave Finance protocol.
It is important to note that XAV is not a rewards token, as this would create an unsustainable level of inflation over the long term. Rather, XAV is designed to create a positive feedback loop of governance participation and fee distribution that grows with the expansion of the underlying Xave protocol.
The token cap table has been designed with an eye towards ensuring sustainable growth, the ongoing alignment of incentives between ecosystem participants, early users, and strategic partners. These allocations are described in detail in the following section In an effort to provide transparency to the Xave community.
LP Rewards- Targeted incentives to grow high performing Xave pools. This will initially be released via incentives contracts in short durations until a formal program and automated mechanism can be implemented on chain.
DEX and CEX Liquidity - Tokens loaned to market makers who will enable liquid trading on centralized exchanges
Treasury/Future Investment - Covers operating expenses for the team building the Xave protocol, as well as tokens reserved for future investor participation
Public Sales - Tokens purchased by early community backers during IDO and IEO events. This allocation is released on exchange listing
Community Builder Rewards (locked for > 1 year, pending DAO committee to manage) - Incentives for builders of the Xave protocol, community members, and promotional opportunities. This will be a community governed fund that will reward participants of the Xave ecosystem, initially via a to be announced program, then eventually automated on chain. This allocation will not be distributed until after the first year of token trading. This includes;
stablecoin issuers that sponsor pools on Xave
LPs that participate in early Xave pools
Builders that utilize Xave for their own products, thus driving value to the Xave ecosystem
Ecosystem partners, such as L1/L2 blockchain networks or partner DAOs that directly support Xave
Team - Vesting-based token compensation for the team building the Xave protocol. Locked in a 6 month cliff and 1.5 year linear vesting starting from exchange listing.
Advisory - Vesting-based token compensation for project advisors. Locked in a 6 month cliff and 1.5 year linear vesting starting from exchange listing.
Investors - Vesting-based token agreements for venture investors from previous funding rounds. Locked in a 6 month cliff and 1.5 year linear vesting starting from exchange listing.
Airdrop Early Supporters - Tokens gifted to initial backers of the Xave protocol, acknowledging their early contribution and support.
On token launch by April 2024, all investors and prior on chain FX community supporters will be given two options for their vesting duration, with the choice presented via a vesting portal (to be released after the token launch or launches):
A two year linear vesting period + 6 month lockup, with monthly vesting following the initial 6 month period
Full vesting upon token launch, with a 6 month lockup period during which the token holder must stake the entirety of their allocation in the ETH:XAV pool
*Note that vesting of the XAV token for investors, advisors and the core team will not begin until after all XAV token launch(es) are concluded.
Circulating supply at exchange launch will be 9% comprising:
3% sold to pre sale and IEO buyers (not counting liquidity)
6% managed by market makers on centralized exchanges and for dex liquidity
It is anticipated that the XAV token will launch at Q2 2024 following the completion of public token sales prior to listing on a centralized exchange.
