Introducing EXO Token
Underpinning our exoSwap platform is the $EXO utility token, a deflationary governance currency that unlocks access to various tiers of functionality across the entire DEX-launchpad ecosystem while simultaneously powering offerings such as staking, farming, prize pools/lottery, and more.
With complete control over emission rates, and buyback/burn built into DEX fees, the entire token is designed to ensure security, maintain scarcity of supply, and bring sustainability to the token.
$EXO is the foundation around which a comprehensive suite of De-Fi products is being built, comprising the most popular offerings already seen in the current crypto space and a series of brand-new innovations unique to the exo.fi project.
Staking $EXO enables access to the plethora of features on exoSwap, exoStart, exoMarket, and exoTools, with four different governance tiers that unlock progressively more advanced functionality.
Beyond this, however, the $EXO token’s most significant innovation is its unique, deflationary rising-pegged mechanism, designed to create a price floor for the token that stabilizes the price and rises persistently over time, backed by fee revenues generated across all Exo Finance products.
The pegged tokenomics from Tomb, for example, and all the associated forks were the inspiration for $EXO. It is a clever mechanism, but the problem is that it generally isn’t tied to any utility (at least not in the beginning), and so it is still reliant on the same model as the old simpler reflections/buyback tokens, where you need new buyers to come in at the bottom of the pyramid for the existing holders to profit. It is a Ponzi.
We decided to create a similar system backed by sustainable income (utility fees) to support the peg. Suppose you have the pegged price increase over time. In that case, you’re creating a rising price floor using sustainable revenue to generate a lot of artificial buy+burn pressure whenever the token dips below the peg.
At the launch point for the exoSwap DEX platform, the $EXO token will have its opening pegged price set at 10% below the 14-day TWAP (Time-Weighted Average Price). A combination of variable emission rates and dynamically allocated exchange fees are then used to ensure the token remains at or above this pegged price. The pegged price, in turn, increases incrementally at set intervals (epochs).
How it Works
When $EXO is Above Peg:
$EXO tokens are minted at the normal rate. Exchange and utility fees are levied and distributed as per the normal fee schedule.
When $EXO is Below Peg:
1) $EXO token emission rates are slowed, proportionally according to how far current market price is below the pegged price
2) An additional 1% burn is levied on sales of $EXO, along with an additional 1% added to $EXO staking rewards
3) The following fees are either burned, or diverted to buyback and of $EXO tokens (depending on which currency the fees are taken in):
- 50% of the team treasury fees across all current/future utilities
- 50% of dev wallet fees on exoSwap
- 50% of lottery fees on exoSwap
- 80% of LP fees on exoSwap
- 25% of trader lottery payouts (excluding jackpot payouts, of which 10% is diverted)
Why It Works
The above system is designed to drive a persistent rise in the value of the $EXO token. Firstly, the pegged price serves as a ‘price floor,’ below which a significant portion of exchange fees are diverted to buyback and burn of $EXO tokens. Combined with the reduced token minting rates while under peg, this mechanism creates a powerful deflationary effect that will restore $EXO to above its pegged price. As the pegged price rises, token emission rates are lowered in such a way to ensure that token scarcity increases while also ensuring that the overall value of staking rewards continues to rise along with the token price.
Because this pegged price is programmed to rise over time, resulting in a token with an ever-increasing price floor, pushing the price up consistently over time. This also creates an even greater incentive for holders of $EXO to trade using our platform, since a portion of the exchange fees go directly to boosting the value of their $EXO holdings.
Furthermore, this is achieved sustainably because it uses externally generated income in fees paid by users of exoSwap and other exo-branded utilities. Unlike many DeFi projects – which rely on pyramid-style tokenomics – $EXO is not reliant on new buyers coming in to maintain its pegged price because it uses profits from fees paid by users of our products – even those who have never bought or held a single $EXO token.
This is a market-first mechanism not employed by any other decentralized swap platform at the time of writing. In conjunction with the fact that $EXO is, first and foremost, a utility token required to access our suite of unique features (and therefore comes with huge built-in demand), this creates a token that offers ongoing upside to investors regardless of how early they buy.
For those interested in what our Day 1 EXO tokenomics will look like…