When it comes to keeping up with DeFi’s ever-evolving token landscape, passive investors can get lost in the thick of new upgrades, governance polls, and incentive changes. A new project called xToken looks to solve this.
Excited to introduce @xtokenmarket – a platform for simple, efficient – and liquid! – ERC20 staking strategies.
We'll be going live with xKNC next week in partnership with @KyberNetwork
— michaeljcohen.eth (@mjayceee) July 2, 2020
Offering liquid staking strategies through native token wrappers called xTokens, the project is teaming up with two of the biggest DeFi projects to kickstart their set-and-forget onramps.
Starting with Kyber Network and their KNC token, xTokens will be releasing xKNC – a wrapped version of KNC which allows users to participate in governance through two different flavors xKNCa and xKNCb. Seeing as Kyber’s first set of governance polls will dictate how fees are allocated across staking rewards, rebates, and burns, xKNC gives users a means to always vote in favor of a specific strategy.
With xKNCa, wrapped tokens will always vote in favor of increased staking rewards while xKNCb will vote in favor of rebates. This gives KNC holders a way to passively put their tokens to work without having to worry about constantly check the governance dashboard for new proposals (and thus spending more gas on tx fees).
This adds another super easy way to participate in the @KyberDAO. Stake KNC and receive xKNC which has a claim on the rewards accruing in staked KNC (ETH rewards from fees automatically convert to KNC), that simple! https://t.co/0keKDGaPBO
— Deniz.eth Omer (@DenizOmer) July 3, 2020
The second xToken, xSNX takes Synthetix‘s native token and wraps it into a liquid asset which represents a claim on underlying SNX which is staked via Mintr. What’s more, is that xSNX routes the underlying SNX to a communal staking pool which captures SNX inflation by minting sUSD. However, instead of having to keep an eye on sUSD, the xSNXa flavor automatically converts the debt to Set Protocol‘s ETH20MACO Set to leverage automated asset management form one of the best performing trading strategies to date.
The Bigger Picture
If anything, xTokens focus on KNC and SNX as their first integrations goes to show the project has their finger on the pulse. The premise of taking popular DeFi tokens and helping to automate their token utility provides a strong mechanism for passive users to take advantage of yield farming without any prior knowledge of how it works within various systems.
been farming the $snx governance token for 10 months now
— michaeljcohen.eth (@mjayceee) June 30, 2020
We expect xTokens to continue exploring other DeFi ecosystems, likely capitalizing on new tokenomic trends and liquidity incentives – like AMPL and their Geyser program – to double down on the yield farming trend.
For our fellow farmers out there, the time for free yield is quickly dwindling. As projects like xTokens help new users get onboarded, we’ll have to stay savvy to capture alpha before an xToken comes along to rain on the parade.
All jokes aside, I’m excited to see how xTokens play out in the wild, and if the average tokenholder is savvy enough to take advantage fo something like this which saves time and earns profits by taking advantage of DeFi’s best and brightest tokenomics.
To stay up with xTokens, follow them on Twitter.
Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.