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Currently, Binance Smart Chain is one of the most utilised EVM-compatible blockchains. Compatible with Metamask, the chain is a relevant…
StableXSwap is a stablecoin-focused AMM-style decentralized exchange built on Binance Smart Chain. Similar to what Curve.fi did for the Ethereum DEX space, StableXSwap will be the first dex on BSC featuring lower slippage and lower fees for the trading of stable assets.
Binance Smart Chain is one of the most utilised EVM-compatible blockchains. Compatible with Metamask, the chain is a relevant alternative for trading on decentralised exchanges, with lower trading fees contributing fewer frictions to users looking for a convenient swap.
However, the current contenders within the Binance Smart Chain ecosystem have focused on adding lots of assets, without focusing on one of the most important pairs of liquidity in crypto: stablecoins.
Currently on Binance Chain, BUSD, USDT, and DAI are the most popular stable coins available, with more to come in the future.
StableXSwap will launch and distribute its token, STAX (view official contract on bscscan) via a fair launch liquidity mining mechanism.
STAX will act as the governance token for this ecosystem, allowing users to vote via our Snapshot.page (to be launched) on parameters such as STAX issuance rates, accepted pools, and future parameter on the StableXSwap exchange such as fees.
We envision STAX to, like Curve’s CRV, capture 50% of fees as staking rewards from eventual trading volumes on the platform, with the other 50% going to liquidity providers, but it will be up to the community to deliberate on the final parameters.
As for the total supply, 10% will be reserved for the dev team to empower continued development, audits, integrations and partnerships with other existing liquidity platforms.
After the initial stages, these funds will be fully managed via community governance. The dev team will apply for funding via this treasury for any work or opportunity, which will only release tokens on the approval of the community. The remaining 90% of the tokens will only be available via providing liquidity to StableXSwap pools in the form of Pancakeswap’s FLP liquidity provider tokens. There is no sale of STAX, so be wary of any scammers or impersonators that try to offer a direct sale prior to launch.
Mining will commence at roughly 1PM UTC on Friday, October 16th, 2020. We will announce the exact block time when the contract is live. The stablexswap.com interface displays an early interface and a countdown for your convenience.
Each block (3 seconds on Binance Smart Chain), 20 STAX will be released into the mining rewards in the following proportions:
The initial pools that will be created include:
1. STAX/BNB (5x rewards)
2. BUSD/USDT FLP token (3x rewards)
3. BUSD/DAI FLP token (3x rewards)
4. USDT/DAI FLP token (3x rewards)
Users will forego any CAKE rewards from their FLP token when depositing into StableXSwap pools. We are working on code to be able to harvest this CAKE and send it to the community treasury, where once enough STAX tokens are distributed users can vote via governance whether they would like to see changes to rewards and emission. At initial rates, the total supply will reach at least 576,000 per day given a 1x global issuance multiplier. Our team plans to vote in support of cutting off or reducing rewards when supply reaches 21,000,000 (which would be reached in no longer than ~40 days), but it will be a community-controlled decision if users would like to see supply capped at a sooner point in time.
An alternative to ape-ing into Pool 2: Staking STAX
Within the first week after launch, we will also have STAX staking pools with 3 locked staking durations (these rewards rates can be adjusted via governance if we see not enough people choosing to lock up in any given category)
2 week lock (2x weight rewards)
1 month lock (3x weight rewards)
1 year lock (5x weight rewards)
We recognise the risks of providing liquidity in the SST/BNB pool, with liquidity providers subject to significant impermanent loss. Thus, we want to encourage real users who would benefit from a stablecoin-focused exchange on Binance Smart Chain to first focus on helping us garner larger stablecoin deposits to our stablecoin pools and “stack their STAX” in preparation for staking into their preferred STAX staking pools duration to earn additional STAX rewards. We decided to start the locking rewards a few days after launch so that all users have ample time to accumulate some STAX via mining, so as to not give too much of an advantage to the early miners. Pre-mines are no fun and destroy the value proposition of a fair launch.
If the community decides so, it may make a proposal to reward early lockers that show clear interesting building with us along this journey. As of contract launch, the decision to make this STAX lock will only be available for the first 30 days, to limit potential future dilution of the token and to reward the early epoch stakers who believe in the StableXSwap vision. After the first 30 days, if this program is successful, other STAX tokens maybe allocated for this contract, as determined by governance.
Upon reaching critical milestones detailed below, we will perform a migration from PancakeSwap and migrate the stablecoins into our new stablecoin-focused AMM contract, similar to the Sushiswap migration from Uniswap. This will only be performed once key milestones are reached, and clear demand is demonstrated. We do not want to put any amount of user funds at risk in a migration to create something that not used. In first ensuring that there’s product market fit for this type of product on BSC, we want to address a very important concern raised by Andrew Kang of Mechanism Capital in his Twitter thread on yield farms: https://twitter.com/Rewkang/status/1314734237996609537
We want to only reward sufficient liquidity provision and encourage deposits that actually make our product competitive with alternatives — overspending tokens that dilute all users does nothing good for this product longterm. Additionally, we want to first test our hypothesis that such a stablecoin swap mechanism is relevant to users and can really serve a market need, so we will introduce “graduated release stages”.
Graduated Release Stages
Rather than artificial guarded-launch ceilings that limit participation to only a select group of early beta users, we will instead monitor but not cap the deposits into our initial pools. These milestones are not fixed at the smart contract level, and will instead be adhered and enforced with community dialogue via our admin multi-sig, with plans to decentralise this decision making to the community once the community has sufficient tokens to partake in governance.
We will simply start with some Schelling points of total deposit “milestones” that we hope to achieve — these milestones are named after the units of Ethereum. These milestones do not include the STAX/BNB pool’s assets.
$10M AUM (Wei)
$25M AUM (Babbage)
$50M AUM (Lovelace)
$100M AUM (Shannon)
$250M AUM (Szabo)
$500M AUM (Finney)
In the first day, we will have 2 assessment snapshots 12 hours apart to check which milestones we have reached.
Similar to “stretch goals” of Kickstarter, we want this to be collaborative approach towards building community participation early on to help grow the adoption of the project.
Defi should be a collaborative effort in building the most secure, easy-to-use products, so to further incentivise users to grow AUM early but not beyond reason, upon reaching and maintaining a new AUM levels, the rewards rates for the pools will *increase* by a global parameter multiplier of 1.20 (20% increase) per assessment period. This is to reward users to bring their friends along and come join our pools. In the future, this increase parameter will also adjustable via governance.
These pools are not designed for you to hoard alpha — instead they are designed for you to help us achieve our mission of garnering more stablecoin AUM. We believe this is crucial in creating a sustainable farm, rather than a pump and dump. We designed these thresholds to be roughly 2x AUM increases, so while pools may still get more crowded as AUM increases, we believe that the 20% increase is enough to bolster APYs in nominal terms to help offset the crowdedness, without creating overwhelming dilution that harms the token price.
After the first day, the AUM will be reassessed every 24 hours. Conversely, if deposits were to leave our pools and AUM falls below the previous threshold, then the issuance multiplier would be restored back to the previous level, decreasing the issuance rate by 25%. In doing so, creating a dynamic issuance strategy to attract an equilibrium rate of deposits. This creates a “flexible” bounty that doesn’t reward overdepositing just for the sake of yield, but to better gauge true demand for liquidity providers for a stablecoin swap product. This is also to encourage sticky participation and not solicit “short-term blitz deposits” that do not help long term liquidity but rack up high rewards to miners, as these types of deposits do not help with long term liquidity on the product.
At the smart contract level, we will adhere and enforce these current settings with a timelock in place and a maximum increase parameter, we will enforce that the global rewards rate parameter cannot be changed by more than 25% per single assessment period, to prevent sudden changes to the smart contract that surprise users with any possible inflation.
Currently, PancakeSwap has the leading stablecoin deposits in an AMM on Binance chain, with roughly $22M deposited in this pool. Of course, there are also other ways to route trades via BNB, etc., but for the liquidity provider, this is the easiest option. However, only $300K in trading volume was completed on the pair in the last 24 hours as of time of writing, likely due to the fact that a 0.3% LP fee is significantly punitive to any trader. We believe that a lower fee will be more competitive against centralised exchanges, which many users on Binance chain likely frequently use.
Our Roadmap and next steps
Once we have reached an AUM north of $50M (stage Lovelace), we will share further details about the planned release the stablecoin-focused product, featuring similar logic as Curve. We hope have the product ready for users to try out when we get to higher levels such as stage Szabo, and initially set a 0.04% transaction fee — half of which goes to Liquidity Providers, and half of which goes to buy back STAX from the open market and distribute STAX back to STAX stakers.
If demand increases to reach stage Finney, and we also see users want to deposit other non-stable assets as collateral to borrow stablecoins from decentralised lending pools to help bolster our stablecoin exchange liquidity, we would be happy to develop vault-like automated strategies as well.
The product and vision will only happen with the help of you, our community.
Let’s StableX together.
We will update this Medium post as necessary and will record any changes below to maintain utmost transparency to the community. Thank you!
How to use MetaMask at Binance Smart Chain
Edited: Oct 14 10PM UTC time to add a link to our farming Github repository.