What exactly is DEXToken?
Over-speculation by over-ambitious bankers and financial institutes has been the root cause of almost all the previous financial recessions and depressions. This greed of a few individuals makes the lives of the majority miserable who had no hand in creating the mess.
Blockchain and crypto was created with the intention of avoiding such disasters in the future by decentralizing the governance power so a few individuals can not rig the system for personal gains. Despite such noble intentions DeFI is still not truly decentralized. It is still manipulated by whales and the small crypto investors are always at the risk of getting rekt by a sudden market swing.
This whale manipulation is the biggest threat to crypto now as the industry is still very young and far from mature. In traditional markets like stocks, commodities and bonds prices are generally driven by valuations or real demand eg. Tesla started booming after success of it’s electric car and change in preference of people for electric cars, in direct correlation oil commodity prices took a hit. On the other hand in crypto most movements are by whales generally at the cost of small investors.
What makes DEXToken different from the other DeFI Projects?
Majority of the existing DeFI projects are aimed at getting the highest rate for your crypto investment, however the promise of high return also involves the high risks of impermanent loss and sudden price shocks.
DEXToken aims at easing out these risks by deploying the following functionalities:
· Speculative AMM
· Offchain Issuance
How does Speculative AMM work?
Speculative AMM is built upon volatility function to overcome the shortcomings inherent in other popular DeFI platforms like Uniswap, Curve and Balancer. Uniswap uses a constant product market maker. Curve uses combination of Constant Product and Constant Sum market maker functions.
To implement Speculative AMM to control price fluctuations, DEXToken has introduced the deflationary DEXG token. This helps it to avoid sudden price drops in reaction a big sell order.
Using DEXG for Decentralized Governance!
DEXToken has distributed an initial supply of 20,000 DEXG tokens to it’s community via Uniswap. There is a limit on the maximum supply of DEXG capped at 200,000. DEXG tokens will run over Ethereum network.
These DEXG tokens will be rewards to users as staking rewards, the reward rate will be controlled by ATH price level of DEXG token and the number of active users in the system.
What is Offchain Issuance?
Offchain tokens typically are rewards points, discount vouchers, redeemable coupons, loyalty benefits etc. DEXToken has provision to tokenize these benefits and enable their transaction through an offchain network. To align these offchain items with the ETH blockchain first the offchain tokens are collected and stored as collateral and then this collateral is linked to ETH blockchain thorugh smart contracts. As these smart contracts would be open to audits it would ensure that these offchain issuance are properly tracked to prevent any frauds. I think this is a really innovative idea with a lot of potential to grow in the coming years.
Benefits of DEXToken for Retail Crypto Investors!
· Safety from Price Fluctuations- One current limitation of crypto compared to other traditional assets is that if you need to sell them to cover some sudden expense there is a chance you might incur a huge loss due to the crazy market fluctuations. This is worse for small investors as the Whales and long term HODLers do not need to sell their crypto at a low price point.
· Staking Pool options- There are several options available to provide liquidity through staking
Who are the competitors of DEXG Deflationary token?
DEXG may seem like a very new innovative concept but it is definitely not the first. Statera is a very similar project with it’s native deflationary token concept to control market fluctuations but DEXToken model is much simplified in my opinion. The control DEXToken has put in place to limit issuance of DEXG being inversely to the number of users on the system would also add to the deflationary factor.
DEXToken Roadmap 2022!
Looking at the planned roadmap of DEXToken you can see they are really futuristic in their outlook. Deflationary token based Speculative AMM is planned to be launched by end of 2020. This would be followed by Inflationary option in early 2021 and their most innovative functionality of offchain issuance will be rolled out in later half of 2021. By 2022 they are planning to incorporate IoT Payments through their network as well. If they can stick to this plan and avoid delays they would definitely be one of the most talked about crypto projects in 2021.
Conclusion Time!
DEXToken project looks really promising and if implemented diligently it has the potential to iron out the price risks from DeFI investments and make it a safe instrument for retail investors. Making DeFI accessible to small investors would make crypto truly decentralized. They have started well but they are still at an early stage of their roadmap. Their long term success will depend upon the real value and asset safety they are able to provide to their users so they can establish a place in a market dominated by big players like Uniswap, Balancer and Curve. DeFI is already an extremely competitive field with new entrants making big splashes but not showing long term potential, perfect example being SushiSwap. There are some new entrants who will give strong competition to DEXToken, one clear case being Harvest Finance with it’s FARM tokens.
I will be monitoring this project closely over the coming months to see how it shapes up compared to it’s competitors.
Cheers,
SamBTC
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Good one