xDollar Space (V2) is a multi-chain interest-free lending platform that users can borrow non-custodial stablecoin, XIM (xDollar Interverse Money) against their crypto assets on any side chains with a minimum collateral ratio. xDollar's here to democratize the store value of crypto assets on all chains with more utilization.
Did you say interest-free?
The extreme volatility present in the cryptocurrency market serves as a major deterrent to its mass adoption and acceptance. Crypto's highly speculative nature makes it attractive to several investors however, this very characteristic also restricts its use in payments and trade. Enter stablecoins. Introduced to tackle volatility and instability associated with other coins, stablecoins reflect the importance of stability for mass adoption.
Types of stablecoins
fiat-backed coins
crypto-backed coins
algorithmic coins
Despite the aforementioned volatility, the overall market sentiment remains positive as the digital asset ecosystem continues to see a rise in decentralized exchanges, platforms, and other promising products and protocols. And in today's article, we're going to cover one such platform xDollar Space V2.
Introduction
A brief on V1
Launched in June, V1 was representative of xDollar as an interest-free lending platform where users could borrow decentralized stablecoin, xUSD against MATIC on Polygon with a minimum collateral ratio set at 110%. The platform was able to garner massive interest and attention owing to its unique offering of being the first cross-chain platform to offer interest-free liquidity.
xUSD or XIM (in xDollar Space V2) is a USD pegged stablecoin that is backed by selected crypto assets that the community can vote on. XIM is considered to be worth 1 USD by xDollar at all times. It is designed with an inbuilt mechanism to ensure stability against fiat. How it achieves this and a detailed account of the peg mechanism can be read here. Moreover, xDollar's vision of being a multi-collateral vault system to stabilize the xDollar platform is well explained here.
The platform implements a systematic liquidation mechanism (stability pool) and fair platform revenue fee distribution (stacking pool). xDollar's vision is to become the first cross-chain decentralized lending platform on multi-chains with DAO governance and a multi-collateral vault system.
In today's article, we're going to focus on xDollar Space V2 and $XIM (which is essentially xUSD rebranded). xDollar Interverse Money (XIM) aims to be the emerging stablecoin of emerging chains, MachineFi, and metaverse.
xDollar Space (V2)
Identifying and capitalizing on opportunities xDollar Space is a revamped version of the protocol. It integrates with and innovates upon DeFi's flagship protocols: Liquity protocol, Maker DAO, Abracadabra, Curve Finance, and Olympus DAO.
Although xDollar is a fork of Liquity and was built on the foundations laid by it, the current design boasts innovations and breakthroughs that enabled xDollar to overcome the drawbacks associated with Liquity platform.
The current design includes the following features:
- Multiple chain, multiple collateral deployments (mc2 )
- A hard price ceiling and floor
- Adopter rewards and governance participation through the XDO token
In essence, it is a non-custodial lending platform that enables users to deposit their token into the smart contracts and mint a non-custodial stablecoin, XIM on any side chain with a minimum collateral ratio. Supporting multiple tokens as opposed to the standard norm of relying on a single asset is what truly sets it apart.
Staying true to its goal of being multi-chain in order to reach out to a wider audience, xDollar commenced its journey on Polygon and eventually expanded to Avalanche and Arbitrum (an L2 solution). And now, xDollar Space V2 has soft-launched on Ethereum Mainnet.
Tokenomics
The following tokens form part of xDollar platform
XIM: This is a USD pegged collateral-backed stablecoin.
SPACE: This token is used primarily for incentivization on the protocol.
xSPACE: This token is obtained by staking SPACE tokens on xStake and is used for fee-sharing and governance.
XIM
XIM is a USD pegged collateral-backed stablecoin and the community can vote on which collaterals to be listed on xDollar Space.
Theoretically, the peg remains at 1 USD and xDollar always considers this token to be worth 1 USD. The mechanics used to maintain this peg include soft peg, hard peg, and stablecoin swap. I encourage you to go through the article linked above so you can understand the peg mechanism better.
SPACE
1 Billion (1,000,000,000) SPACE tokens in total.
47% to Community Staking Rewards
17% to Space Guardians This supports the growth of the xDollar Space. The tokens distributed are vested and staked for xSPACE.
20% to Space Team Since the initial launch of xDollar V1, Space has been subjected to a 6 months lockup and 30 months vesting period.
5% to xDollar DAO xDollar DAO community can vote on how to use the SPACE locked in the multi-sig wallet.
1% to Initial Startup This allotment to the team is for the initial startup of the platform including marketing/bootstrap liquidity/bounties/expenses/airdrop/community incentive program.
10% to Strategic Investors This share is allotted for strategic partnerships.
xSPACE
Obtained by staking SPACE, xSPACE is used for fee-sharing and governance on the xDollar platform.
A 4-year lock period gets you 1 xSPACE
A 2-year time lock gets you 0.5 xSPACE
A 1-year time lock gets you 0.25 xSPACE
Let's dive into the app's functionality
xBank - Depositing Collateral and Borrowing XIM
xDollar V2 through xBank enables users to obtain liquidity (by lending out XIM) at any time and in a permissionless manner after they deposit the collaterals approved and listed on the platform into the trove (a specified account for users to manage their loans). The assets deposited as collateral are then locked and secured by the smart contract. The Trove is required to maintain an MCR (Minimum Collateral Ratio) of 110%.
Borrowing on xDollar makes sense for the long term as borrowers incur a one-time algorithmically adjusted borrowing fee for fresh liquidity creation to support the peg of XIM.xPeg - Using Stablecoin to Borrow XIM
xPeg essentially provides users the opportunity to collateralize stablecoins like USDC for XIM. For a small fee of 1%, users can mint or sell XIM to other stablecoins.
Depositing USDC into the platforms provides users access to a special trove that accepts only USDC as collateral at a minimum collateral ratio of 101%. The trove remains active the user closes it by claiming USDC. The liquidation and redemption functions are disabled in the aforementioned troves.
3.** xPool **- Staking XIM to Farm SPACE on xPool and xFarm - Staking XIM 3LP3CRV to Farm SPACE
Users can stake their XIM and LP tokens to farm SPACE on xDollar. These opportunities are available on Ethereum and include: xPool: user can stake their XIM in xPool to farm SPACE xFarm: user can stake their XIM-3Pool Curve LP to farm SPACE
- xStake -Locking SPACE for xSPACE
xStake enables users to stake SPACE for xSPACE. Staking SPACE for xSPACE enables users to increase their voting power as well as boost their rewards. The voting power is directly proportional to the period you lock your SPACE thus the longer you lock for the greater your voting power and revenue share. You can boost up to 4x by locking SPACE for 4 years. Your boosted SPACE is presented as xSPACE and will remain in escrow until your unlock time (non-transferable).
Conclusion
X-Dollar V2 is expanding into the far-off realms of the cryptoverse supporting tokens from a myriad of chains. The mc2 approach of multi-chain and multi-collateral is unique. Users can collateralize other stablecoins with XIM to keep the volatility checked and the price pegged more tightly. For now, the eyes are set on the 1 billion DeFi user mark. 2030, it is!
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(Please note - This article might also show under my alter ego - Cyek)