In traditional Token Generation Events (TGEs), early investors in any given crypto project are allocated part of the initial token supply. This process, however, is inherently opaque, centralized, and unfair to later-stage investors who typically face higher purchase prices when they buy tokens on an exchange. Ultimately, it is a dynamic that can disincentivize their participation.
XFai is a project that builds next-generation blockchain DeFi tools that dare to reimagine these kinds of processes. The project has pioneered an innovative funding model called a Liquidity Generation Event (LGE). This approach involves the purchase of a token and its automatic addition into a liquidity pool.
On April 15, XFai investors will be able to buy the native $XFIT token and stake it in its corresponding liquidity pool, all in a single step. This avoids common TGE issues such as slippage, impermanent loss, failed transactions and high gas fees. As an industry-first, the LGE is sure to have a significant impact on the wider crypto investing space as a more decentralized and efficient way to fund blockchain initiatives.
However, the team behind XFai is not just dedicated to leveling the playing field between early-stage and later-stage investors but between centralized and decentralized exchanges as well. XFai has built a set of autonomous liquidity management smart contracts that benefit low liquidity and low market cap tokens known as the DEX Liquidity Oracle (DLO). Thanks to this technology, small-cap token holders can earn investment incomes on their holdings in return for providing liquidity on decentralized exchanges.
The issue so far has been that many of these small-cap tokens are not able to earn returns for their holders due to having most of their liquidity trapped in centralized exchanges. Highly liquid large market cap tokens such as DAI and ETH can earn returns on many different liquidity pools and yield farming platforms, but smaller-cap tokens are stuck in a Catch-22. They cannot move off centralized exchanges to decentralized exchanges due to low liquidity on DEXs, but if they remain on CEXs, their prices often remain artificially suppressed and fees are often paid in stablecoins. This means that liquidity providers cannot earn returns in the token they are providing to the exchange, causing the tokens in question to fall into a downward price spiral.
XFai also provides a suite of cryptocurrency trading and investment tools along with the Liquidity Generation Event and the DLO. These are built to help traders and investors hedge against high variance, adjust their portfolio based on their current portfolio’s variance, and earn on low-cap tokens in their possession.