The Elrond Network announced at the November 3-5 X-Day conference in Paris that it would be rebranded to MultiversX. During the conference, the team also revealed that Maiar Exchange would be renamed to xExchange and that the MEX 2.0 tokenomics update would be a key part of the new DEX update.
This article will highlight the main features and innovations the MultiversX team has implemented on its DEX.
What Is xExchange?
xExchange is a decentralized exchange (DEX) or automated market maker (AMM) built on the MultiversX blockchain. It offers a range of features including asset trading, liquidity provision, and farming opportunities.
The highly anticipated MEX 2.0 tokenomics and DEX updates were released on December 10 following a successful governance proposal vote by the MultiversX community.
New Fundamentals
The MEX 2.0 tokenomics update includes significant changes outlined in the video overview available here. The most notable of those changes are:
- The immediate reduction in inflation.
- The introduction of the concept of energy.
- The creation of a new token, XMEX, also known as LKMEX v2.
Inflation was reduced by 65% on December 10. The proposal is that emissions will continue to reduce year-on-year over the next eight years. After five years, there will be a governance vote to determine what happens after the eighth year. In addition to the reduced emissions, there are new fee mechanisms that will increase the burn rates and fees distributed amongst users.
Energy is used to calculate the asset lock period and the rewards they generate. The greater the energy, the longer the lock period and the higher the rewards. Each day passes, one energy is discharged until the total reaches zero. This process also shortens the lock period and the potential for generating rewards.
XMEX is the energized version of MEX and both MEX and LKMEX v1 can be converted to XMEX if desired. Those choosing to convert MEX to XMEX can do so for one, two, or four years to get 360, 720, and 1,440 energy, respectively. LKMEX v1 holders have an option to convert to XMEX with the average unlock schedule becoming four times longer.
XMEX loses 1 energy per day until it reaches 0, at which point you can unlock it to MEX without incurring any early withdrawal fees. It is possible to add or remove energy at any point. Adding more energy increases your lock time and earning power, while removing energy incurs an early withdrawal fee.
Converting to XMEX is optional, and LKMEX V1 holders who choose not to do so will receive most of the benefits that XMEX users have. However, their energy levels will be lower and result in lesser rewards than if they were converted to XMEX. Additionally, LKMEX v1 users cannot increase or decrease their energy levels.
Benefits
The new tokenomics brings many additional benefits that will be distributed proportionally based on energy.
Below is a comparison between the benefits LKMEX v1 holders received on the old DEX and the benefits available to XMEX (LKMEX v2) on the new DEX.
The xExchange 2.0 Paper provides more detail on each benefit. In addition to the above benefits, those choosing to convert all their LKMEX v1 and maximize their energy will receive 2x boosted metabonding rewards for the first three months since the DEX launch and an NFT that will guarantee a winning ticket for an xLaunchpad project.
Besides these benefits, MEX will eventually be integrated into xPortal, xSpotlight, and xCard.
FAQs
Do I have to convert LKMEX to XMEX?
It is not necessary to convert LKMEX to XMEX. Rewards are based on the amount of “energy” a token has, which is determined by how long it is locked for. LKMEX holders will receive fewer rewards compared to users with XMEX fully locked for four years, but both types of tokens receive the same types of rewards.
XMEX can be converted back to the normal MEX at any time and the locking period can also be increased, but these options are not available for LKMEX.
When will xLaunchpad NFT be distributed?
No date has been set yet. Anyone hoping to receive the NFT must ensure that they have converted all their LKMEX to XMEX and maximized their energy within the 30 days since the DEX launch. Watch this video for a guide on how to complete these steps.
Where is the LKMEX/MEX farm?
The farm has been removed, and now rewards are distributed to LKMEX or XMEX holders automatically, though at a lower APR.
Why am I being asked to “Update Energy”?
This transaction will update the smart contract with your new energy values. It is advisable to do this a little before the weekly rewards are distributed or whenever you change your position, i.e., add or remove XMEX, or change the multiplier.
How often do I have to claim the rewards?
At least once a month, but they can be claimed once every week.
What is the best strategy?
There are many possible strategies, and it is so far unclear which is preferable. Whatever strategy you choose it is important to carefully consider the risks involved and weigh those against the potential gains.
With this said, here are some broad strategies:
- Convert all your LKMEX and lock them for four years with maximum energy to maximize returns.
- Let your LKMEX unlock to MEX according to schedule and then either sell the MEX, or gradually lock the MEX to create a CD ladder.
Conclusion
The team has introduced the new concept of XMEX energy. This token energy is important for both voting power and benefits. Thus, the quality of energy points is important, not the quantity of MEX. The more energy, the more benefits.
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