XFai : An analysis
About
XFai is a project set to chart a new course for how investors and projects interact within the DeFi ecosystem. It develops various tools that chart the liquidity depth and the order book of both DEX (decentralized exchanges) and CEX (centralized exchanges). Using its native-built DLO (DEX Liquidity Oracle), XFai shifts the liquidity between DEX and CEX dynamically to allow investors on DEX to benefit from free-flowing token liquidity, ultimately freeing the investors to enjoy optimized trading grounds on decentralized exchanges. XFai’s DLO is equipped with anti-slippage technology and an efficient one-sided provisioning, allowing both investors and liquidity farmers to minimize costs while enjoying transparency that shows the actual impact of their trading actions. Moreover, DLO allows partnered small and mid-cap tokens to benefit from APY earnings, allowing holders and projects to gain a bolstered income by choosing to stake their tokens in the liquidity pool.
Background and Problem
In the past year, the DeFi space has grown from around $600 million to over $40 billion in total locked value. However, a considerable amount of these funds are not allocated properly due to inefficiencies in the space’s infrastructure. Most small to mid-cap token projects are caught in a dilemma where their liquidity is too low to benefit from decentralized exchanges yet they are unable to grow due to hidden dynamics in the centralized exchanges that hold the liquidity they need.
XFai’s solution to this is to develop a DEX Liquidity Oracle or DLO that takes data feeds a step further by managing liquidity between decentralized and centralized exchanges. This DLO aims to provide small to mid-cap tokens that have traditionally struggled to achieve optimum liquidity levels, with the liquidity they need. While low liquidity can blight even the most popular DeFi trading pairs, it is particularly pronounced with low cap cryptos, tokens whose minor market capitalization means shallow pools where slippage is all but inevitable leading to reduced profits.
Core Features of Xfai’s Dex Liquidity Oracle (DLO)
Xfai’s value proposition is based on game-changing technology. XFai’s DLO counts on a smart contract infrastructure that matches the liquidity in decentralized exchanges with the liquidity found in centralized exchanges. This levels the playing field for a fairer and more efficient ecosystem, loosening the grip centralized exchanges continue to hold over the industry.
Core features of Xfai’s DLO include providing pricing information on DeFi assets and triggering third party contracts.
In addition, Xfai’s DLO will actively manage token liquidity on DEXs such as Uniswap. The idea is that holders of small cap tokens can lock these into the XFai smart contract, which in turn deploys them on Uniswap in a manner that will optimize price-to-order matching. Large trades will be prioritized, directing deeper liquidity to those who need it most.
In return for providing liquidity to small cap tokens, lenders can earn rewards. What’s more, they only need to supply single-sided liquidity i.e. pooling one asset, thereby reducing impermanent loss. XFai’s proprietary oracle will read APIs across multiple order books from centralized exchanges. Then, using a synthetic curve, the DLO focuses the order book volume on where the price action is being conducted.
In summary, by obtaining more up-to-date pricing information from CEXs than other oracles, it can direct liquidity to where it’s needed on Uniswap, when it’s needed. The result is deeper liquidity and less slippage.
More information on the various features of XFai’s DLO can be found in their whitepaper.
Target Market
XFai is targeting small to mid-cap tokens. XFai defines small cap tokens as being any asset whose market capitalization is below $400 million, most DeFi tokens fall into this category.
What makes XFai unique
One of the drawbacks to many emerging DeFi projects is that their proposed solution entails migrating users — and thus liquidity — to their own native platform. This results in fragmentation, further reducing liquidity across the DeFi landscape. Moreover, the introduction of additional platforms and protocols, while potentially advantageous from a tech perspective, adds further layers of complexity, and serves to scatter DeFi users.
What makes XFai different is that it’s designed to work with rather than compete against existing DEXs. It can be applied to AMMs such as Uniswap and used to optimize their liquidity rather than further eroding it. As such, there is reason to believe that XFai’s DLO solution — if proven effective — will be integrated into DEXs, where it will work to deliver a better deal for all; Liquidity Pools (LPs), traders, and low cap projects, whose token will be able to enjoy liquidity once synonymous with big caps.
Monetization
Although it has not been outlined how XFai will generate revenue, the most obvious thing that comes to mind is fees charged for trading and liquidity providers.
Product
XFai’s DLO can be accessed here.
Positives
Project has a valid use case
Project identifies their customer base with the product / service
The product has a real world use case
Product delivers unique features that can’t be found elsewhere
Improves on previous DeFi models
Project is first to market with what it’s offering
Working product in place
Weaknesses
It is not explained how the platform will be monetized
Improvement
Keep growing the network
Increase adoption
Increase brand awareness
Provide more information on the monetization aspect of the business
TOKENOMICS
The XFai platform relies on its native $XFIT token and allows holders of small and mid-cap tokens to earn returns on their funds when providing liquidity. XFai is using what they call a “Liquidity Generation Event” for funding. This innovative new funding model is an improvement on the Token Generation Event that lets participants add their purchased tokens into a liquidity pool automatically, all in a single transaction. This saves them gas fees and avoids failed transactions, slippage, and impermanent loss. These key features of the Liquidity Generation Event are possible thanks to the XFai Potentializer, an easy-to-use interface for “supercharged liquidity farming.” Digital Strategies believes the Potentializer will become a vital component of the DeFi industry. The firm’s role as an initial liquidity provider all but ensures both the event and the Potentializer’s success.
XFit Token Utility
Governance: The XFIT token is used for the signaling of votes in the XFai ecosystem.
Fee Discounts: Holders of tokens will pay significantly lower fees when accessing our contracts.
Combinatorial Uniswap Pairs: XFIT will trade directly in Uniswap pairs with every new token on boarded to the DLO and other products. Our DLO will preferentially weigh the XFIT token when the global DLO liquidity deployment optimization is performed. This will increase overall access to liquidity to the XFai.
Continuous Liquidity Farming: All profits/fees made first by the DLO and then later products will be used to continuously “liquidity farm” the XFai token itself on all DLO Uniswap pairs. Example: If profits are made on a Uniswap pair in terms of Token B, then our strategy contract takes the profit in terms of Token B, and liquidity farms XFai tokens with it on the Token B — XFai Uniswap pair. This creates both impermanent gain price pressure as well as increases overall liquidity of XFai. Considering that Uniswap fees are always denominated in terms of the target token of the exchange, the XFIT token effectively rides the upside of every token rally within the DLO ecosystem.
The XFai Liquidity Generation Event + Double IDO
The XFai liquidity generation event (LGE) took place on 8 April 2021. It was the first of its kind in the entire industry. The initial price per token during the LGE was set at 0.10 USD per token.
Tokens for Sale: 400,000,000
Tokens Sold: N/A
LGE Price: $0.10 per token (roughly 17% discount from the IDO price of $0.12)
% of Total Supply: N/A
Fundraising Goal: N/A
On April 29, the XFai double IDO will take place on both Ignition Launchpad and Poolz. More information on this event can be found on their blog.
Tokens for Sale: N/A
Tokens Sold: N/A
IDO Price: $0.12 per token
% of Total Supply: N/A
Fundraising Goal: N/A
Source: Cryptorank.io
Token Info
Symbol: $XFit
Genesis Block: April 2021
Block explorer: Etherscan / Ethplorer
Consensus: ERC 20
Circulating Supply (initial): ??
Maximum token supply: 400,000,000
% Maximum token minted: 400,000,000
Financials[L1]
[L1]This data is not yet available
Market Cap (initial):
Volume:
Price:
Volume to network:
Average price 30 day:
Trading Pairs:
$XFit Token Top 100 holders[L1]
[L1]This data is not yet available on etherscan
Exchanges
$XFit token is currently listed on Uniswap.
Positives
Token utility on platform
More than 50% of tokens distributed to the public
Weaknesses
Development funds not labelled on etherscan
Only one exchange listing
Team/ advisor token addresses not transparent, listed and verified
Improvement
Label development funds
Get the token listed on exchanges
List transparent and verified team / advisor token addresses
TEAM
Experience
All-star team with relevant industry experience.
The team is public and information regarding their background can be found on their LinkedIn profiles.
Roadmap information is missing on the website therefore it is currently not possible to tell if development is consistent with roadmap.
Company and Funding
Registered company information has not been provided on their website.
XFai held a private sale in Feb 2021 that closed within just 24 hours of being open. Early investors had the opportunity to buy the tokens at a 20% discount.
Private Sale of XFIT: $3.8m raise @ $0.08. List @ $0.10
Advisors and Partnerships
XFai has secured impressive partnerships with various industry peers to maximize the probability of success and longevity of their DLO, their community and all the other projects that they are interacting with in their ecosystem. Bitcoin.com founder, angel investor and one of the first bitcoin evangelists, Roger Ver, has thrown his weight behind XFai. Other partners XFai has secured include Tzero, bussr, Mckinsey and Company, Goldman Sachs etc.
Positives
Public team
Partnerships in place within the ecosystem
Funding in place
Revenue streams to progress development
Consistent development
Very experienced team
Linked In Profiles
Weaknesses
Can’t find registered company information
Team profiles have not been put on website
Advisors and partners not indicated on website
Improvement
Team information needs to be more transparent and verifiable
Provide registered company information
Advisors and partners need to be listed on the website for transparency
COMMUNITY
Engagement
The majority of XFai’s community involvement and engagement takes place on their Twitter page (more than 13,000 followers) and Telegram channel (more than 11,000 members).
Announcements are made regularly on their twitter page. They also publish regularly on their Medium.
There is not much project background information on their website which takes you straight away to the XFai DLO and currently all information provided is in English.
Positives
A large follower base on Twitter of more than 13k followers
Large telegram community of more than 11k
Regular communication on their socials
Regular publications on Medium
Frequent AMAs on telegram
Weaknesses
No discord channel
Website not bilingual
No YouTube presence
No website or page providing project information
Link to Medium is not on website
Improvement
Create YouTube channel for increased awareness through AMAs, tutorials, interviews, presentations etc.
More AMAs on YouTube
Add discord for better two-way communication
Add more languages to website
Provide company information on website i.e. about, vision, roadmap, team, advisors and partners, contact information etc.
Provide transcriptions of previous telegram AMAs on Medium
Provide Medium link on website
CODE
Their repository on github can be found here however more information is needed.
Improvement
Provide information on code audit
Provide information on whether code is open or closed source
