Let's talk about the XMT token, to understand its value in the MetalSwap ecosystem.
XMT is an Erc-20 token present on the Ethereum, Binance and Polygon blockchains. The token supply is 2B and MetalSwap’s DAO is based on it.
What we will see during this deep dive:
- The difference between coin and token
- MetalSwap's DAO
- XMT distribution
- Token flow
- The value of the XMT token
As mentioned during the introduction, XMT is a token and not a coin. Let's start by understanding this small but important difference!
1 Coin vs Token
A coin is the native cryptocurrency of the blockchain it runs on. It acts as money, and it has all the attributes of traditional currencies like scarcity, durability, security, portability and store of value. For example, Ether is classifiable as a coin because it is the currency of Ethereum's blockchain, and to be able to move some USDT - ERC20 - Token, I'll spend ETH - Coin. It is the same for BNB on the BNBChain: the Coin is the one used to pay tx fees in the respective blockchain.
A crypto token, just like the old phone box token, has value because it has a specific use. A crypto token is therefore not the currency behind a blockchain, but it is behind a decentralized app (dapp). A token can also be present on multiple blockchains; that's why XMT is present on the Ethereum, Binance and Polygon blockchains. XMT falls within the category of governance tokens, which means that its main use is within the DAO of MetalSwap.
2 - What is a DAO and why does it need a governance token?
DAO is an acronym for the word “Decentralized Autonomous Organization”. This structure is the basis of what is called Web 3.0. The DAO has been created to replace the classic centralized entity of Web 2.0 by a decentralized voting system.
So the question is, how can we build a Decentralized Application and take decisions about it overtime?
The answer is simple: by a governance token that reflects a voting power. This means that: 1 XMT = 1 vote inside the DAO.
On the MetalSwap web app, there is a governance section. Here is where the DAO of the project is developed, and also where the XMT token finds its main use!
Header MetalSwap Website
The basic function of a DAO is to create and vote proposals to change the protocol. Today, to create a proposal within the dapp of MetalSwap, one user must be in possession of at least three million tokens. After the proposal has been launched, anyone with at least one XMT can vote for or against it. This is exactly what happened during the first two proposals voted on our DAO.
Pay Attention! In order to be eligible to vote, you must press the “self delegate” button before a future proposal goes live. You can find this button on the Governance page.
Also, it is important to remember that the XMT that are allowed to vote are:
- $XMT in the wallet
- Staked $XMT on the active ETH Smart Pool
- $XMT staked Alpha Club NFT Presale Pools
So, we realized that the XMT token has two main uses:
- Making proposals
- Voting proposals
3 - How will this voting power be distributed in the form of XMT tokens?
XMT distribution diagram
At the beginning, when the protocol was created, all XMT tokens were in the hands of the team that decided to distribute them in the following way:
Founders, team and advisors: 10% of tokens with 2 years vesting
Ecosystem Development: 10% of tokens with 15 months vesting
Seed tokens: 1% of tokens with linear vesting over 1 year
Private tokens: 4% of tokens with 6 months vesting
Treasury: 25% of tokens
Public sale: 15% of tokens (1% IDO)
Rewards and Community: 23% of tokens
Marketing: 2% of tokens
Strategic investors: 10% of tokens
Now, the goal is to distribute this voting power in the best and most meritocratic way by making the protocol decentralized.Today, the XMT token is distributed through these three modes of incentives:
- To users who use the dapps
- To users who are stacking XMT tokens
- To users who offer liquidity to the protocol
Day after day, MetalSwap takes a step closer to decentralization, which is our goal!
4 - XMT token flow
Going more deep, it is time to analyze the flow of the XMT token.
XMT flow scheme
Secondary to the DAO functions, the XMT token feeds everything that is Dapp's incentive system. This system starts when a user opens a hedging swap and pays the fees. 80% of these go into the Liquidity Pool and are used by our smart contracts to make a buy-back on the token market. The XMT tokens are then placed within the incentive pool and distributed in the 3 ways we highlighted earlier.
- DISTRIBUTION XMT LIQUIDITY PROVIDING & HEDGING SWAP USER → BALANCER
Every user of MetalSwap’s Hedging Swap Tool is rewarded with XMT, both from the Liquidity Providing side & the Hedging Swap Active Orders.
There’s a mechanism in MetalSwap’s dApp that chooses in which direction new orders are incentivized, as to balance the liquidity: the balancer.
5 - So, what is the value of the XMT token?
The XMT token, being used as a governance token, has two main uses: making and voting proposals inside MetalSwap Dapp. The value is thus derived from the voting power represented by this token within the MetalSwap Dapp!
All the main information about the XMT token and its contract addresses can be found on the token's coinmarketcap aggregator page or in the official MetalSwap Docs section.
Don't forget the coming news, something juicy is next to come!
To the MetalSwap
… and beyond!
-The DeFi Foundation
❗ METALSWAP ‘s admins or moderators will NEVER contact you directly on any social under any kind of circumstances.
❗ Everything concerning $XMT ‘s smart contracts and addresses is shared by our official channels (list below), do not trust any different info from any different source.
✎ What is MetalSwap?
With MetalSwap we enable hedging swap transactions through the use of Smart Contracts, AMM style.