INTRODUCING XDX EXCHANGE

8 min readSep 20, 2022

After two months of working underground on ideation and implementation, it is time to introduce the XDX Exchange to the public!

Overview of XDX Exchange

XDX is a multi-chain decentralized spot and perpetual exchange that allows traders to efficiently open leveraged long and/or short positions on crypto assets directly from their wallets. The exchange offers up to 50x leverage on supported assets and enables users to hold leveraged positions against multiples assets in a single wallet.

XDX is supported by two native tokens, $XDX and $XLX. $XDX is the exchange’s utility and governance token utilized for staking and earning holder’s benefits. Staking $XDX grants users the right to delegate and vote on the platform’s decision. XLX, on the other hand, is an index of blue-chip assets and stable-coins pool which acts as the global automated market maker (AMM) for swaps and leveraged trading on the exchange. Trading is supported by the multi-asset liquidity pool (XLX) that earns liquidity providers tokens through fees generated from swaps, leveraged trading and liquidations. Holders of XDX and XLX share 100% of the revenue within the protocol.

How Perpetual Trading Works

Perpetual trading is a form of futures trading in which a trader can buy or sell an asset at a predetermined date for a specified price. Unlike traditional futures trading, perpetual contracts have no expiration or settlement date, thus allowing traders to buy or sell based on their expectations of the future price of the asset.

Positions in Perpetual Trading

• Long Position: This is the buy contract. Traders earn a profit if the token price goes up and suffer a loss if the token price goes down.

• Short Position: This is the sell contract. Traders earn a profit if the token price goes down and suffer a loss if the token price goes up.

In perpetual trading, leveraging allows a buyer or seller of a contract to ‘borrow’ with a volume higher than the price paid. For instance, a 5x leverage on a long position enables the buyer to open the position with a volume five times higher than the price paid. With this leverage, the buyer agrees to an analogous trading risk as downward price movement result is five times the loss of a non-leveraged position. This is true and vice versa for short positions.

Typically, perpetual trades are performed on centralized exchanges requiring the creation of an account and KYC verification. However, with XDX, traders can access these trades on a decentralized platform using their web3 wallets.

XDX Exchange Features

• Open Source Protocol: The XDX Exchange is an open and permissionless protocol governed by the community of validators, liquidity providers and users. This ensures that the exchange is truly decentralized and that decision-making power is granted to the community. The website is also community deployed, hosted and served on the distributed peer-to-peer IPFS Network.

• Multi-Asset Liquidity Pool: Exchanges that are based on a single-asset liquidity pool limit users’ trading options and open them to the risk of impermanent loss if the fiat value of the collateralized asset falls over time. XDX solves this by utilizing a unique multi-asset liquidity pool system where multiple assets (XDX, USDT, AVAX, ETH, WBTC, ADA, SOL, and USDC) are aggregated into one shared liquidity pool. This multi-asset liquidity pool reduces risk to liquidity providers and users as the risk of any single asset option contract is spread to all options generated from the pool. Also, this structure ensures increased liquidity and grants users various asset options to trade from.

• Novel Trade Collateral System: The XDX platform allows holders of $XDX to post the token, which has a price stabilization mechanism built into its contract, as collateral for trades. The price stabilization mechanism built into $XDX contract helps to counter high fluctuations in price. When the price of $XDX falls below the set (collateralized) price, the $XDX buyback fund will buy up $XDX and burn the tokens until the price is back at its set price. A snapshot of traders’ USD value of $XDX is taken when trades are posted, hence traders are not at risk of getting liquidated if $XDX price drops. This unlocks a unique trading efficiency for users.

• Instant Transactions: XDX is built on the Layer-2 technology. This technology allows transactions to be executed instantly and confirmed on the blockchain within seconds. Hence, users are not exposed to the price difference risk present in platforms where users have to wait a long period between transaction submissions and blockchain confirmation.

• Low Fees: The Layer-2 technology on which $XDX is built allows for transaction execution with very low/negligible gas fees. Therefore, users can get the optimal price for every trade and enter and exit positions on the exchange with minimal spread and zero price impact.

• 100% Revenue Sharing: The revenue made by the exchange is shared between holders of the native tokens of the exchange ($XDX and $XLX). Users are entitled to a share of this revenue when they stake $XDX and participate in governance or provide liquidity with $XLX.

• User Friendly: The XDX Exchange is designed with an easy-to-understand interface to ensure smooth user interaction. It can be accessed on any device and is available across regions.

$XDX Tokenomics

$XDX is the platform’s governance and utility token. Holding this token unlocks various benefits, including a share of 30% of the exchange’s revenue generated from swaps, leveraged trades and liquidations.

• Supply: The forecasted max supply of $XDX is 5.135million tokens. Of these, a proportion (to be determined) will be the circulating supply at launch. The current circulating supply at any time will be viewable on the dashboard. The increase in circulating supply will vary depending on the number of tokens that get vested and the number of tokens used for marketing and partnerships.

The forecasted max supply is to be shared as follows;

285,000 XDX reserved for the XDX private, presale and VC funding.
500,000 XDX tokens paired with AVAX for liquidity on Traderjoexyz.com.
2 million XDX tokens reserved for vesting from Escrowed XDX rewards.
2 million XDX tokens to be managed by the buyback fund.
250,000 XDX tokens are reserved for partnerships and community developers.
100,000 XDX tokens to be distributed to contributors linearly over two years.

Minting beyond the forecasted max supply of 5.135 million XDX is controlled by a 28-day timelock and a governance vote which will be conducted before any changes are made.

• Staking: Users can stake $XDX to unlock various benefits. These benefits include:

1. Escrowed XDX (EsXDX)

2. ETH/AVAX/OP/SOL/ADA Rewards

3. Multiplier Points

30% of fees generated from swaps and leverage trading are converted to ETH/AVAX/OP/SOL/ADA and distributed to staked XDX tokens. Stakers will receive tokens based on the network they are staking on. For example: If you are staking on Avalanche, then you would receive AVAX.

EsXDX (Escrowed XDX) is a token which will vest into XDX when staked in the esXDX vesting vault. The vesting period will be linearly over six months. When vesting is initiated, the average amount of XDX or XLX tokens that were used to earn the esXDX rewards will be reserved. Stakers of $XDX receive esXDX rewards after vesting period has ended.

Multiplier points are used to reward long-term holders without inflation. Users earn Multiplier points at a rate of 100% APR for staked $XDX.

• Buyback Fund: The XDX token has a buyback fund in AVAX and XLX. 10% of fees generated from liquidations are used to buy back XDX on the open market, preventing high price fluctuations and increasing the buying pressure of the token.

XDX/AVAX liquidity is provided and owned by the protocol; hence, the fees from this trading pair will be converted to XLX and deposited into the buyback fund. The buyback fund helps to ensure liquidity in XLX and provides a reliable stream of AVAX rewards for all staked XDX.

About $XLX

$XLX is the liquidity provider token for the XDX Exchange. Liquidity Providers (LPs) accrue 70% of the protocol fees, and can expect a return close to the targeted yield (starting at 29% APR) distributed in AVAX and esXDX.

• XLX Index: The XLX index is a stack of blue-chip assets and stablecoins pooled together, which acts as a global AMM for leveraged trading. LPs can deposit any whitelisted asset into the XLX pool in return for $XLX tokens, which represent the LPs share in the diversified liquidity pool.

Additionally, LPs are incentivized to redeposit their AVAX rewards over time using the ‘Compound’ function, allowing them to earn $XLX rewards at a compounding rate.

The XLX index will be deployed on the Avalanche, Arbitrum and Optimism networks at launch. More networks will be added as the XDX exchange grows in volume and active traders.

• $XLX Rewards: $XLX holders will receive 70% of the XDX protocol’s revenue for as long as they stake their $XLX tokens. The $XLX token has a targeted yield of 29% APY and can be boosted by up to 100% using multiplier points.

XDX Rewards

The XDX protocol rewards its holders, stakers and liquidity providers through revenue sharing, EsXDX and Multiplier points.

Revenue Sharing: Stakers of $XDX and LPs (who earn $XLX) share 100% of the revenue accrued by XDX. 30% of fees generated from swaps, leveraged tradings and liquidations are shared amongst $XDX Stakers while LPs share 70% of the fees. This revenue is distributed in the native token of the chain the user is staking on (for example, Avax for Avalanche chain).
Escrowed XDX (EsXDX): Escrowed XDX is earned by staking esXDX. esXDX will vest into XDX over a period of 1 year. During this time, the esXDX can be compounded and staked to earn similar rewards to esXDX. Each staked esXDX token will earn the same amount of esXDX AVAX rewards as a regular XDX token.
Multiplier Points: Multiplier Points reward long term holders without inflation. When staking XDX, users receive Multiplier Points at a fixed rate of 100% APR. For instance, 500 XDX staked for one year would earn 500 Multiplier Points. Multiplier points can be staked for fee rewards by pressing the ‘Compound’ button on the Earn page. Each multiplier point earns the same amount of AVAX rewards as a regular XDX token. When XDX or esXDX tokens are unstaked, the proportional amount of Multiplier Points is burnt. For example, if 500 XDX is staked and 500 Multiplier Points have been earned so far, then unstaking 300 XDX would burn 300 (300 / 500 * 500) Multiplier Points. The burn will apply to the total amount of Multiplier Points, including both staked and unstaked Multiplier Points.
Reward Distribution Rate: Rewards are distributed every second to staked tokens. Reward rates will be evaluated each month and may be subjected to changes. Any modifications will be announced at least 7 days in advance before being implemented.
Reward Summary: XDX earns AVAX, esXDX & Multiplier Points when staked. esXDX earns AVAX, esXDX & Multiplier Points when staked. Multiplier Points earns AVAX when staked leading to higher AVAX APRs. XDX earns AVAX, esXDX & is automatically staked on mint.

XDX RoadMap 2022

This summarises what we have achieved and are planning to accomplish in 2022.

July-Aug 2022: Development Begins.
Sept. 2022: MVP deployed on Testnets.
Oct. 2022: $XDX launches.

This roadmap will be updated as more milestones are set and achieved.

Audit

XDX will be audited pre-launch by Solidity Finance. The audit report will be made public, and reviews will be implemented to ensure the best trading experience for users.

Early Support and Participation

Users can support our platform and participate in our activities to earn benefits.

The activities include

joining our discord and getting the early access role.
participating in our beta testing phase (details later).

Benefits include:

early access to the XDX Exchange Private Beta.
a share of the rewards available for beta testers.
$GMX Airdrop for early supporters who have traded on GMX in the past six months.

How to gain early access: