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It’s no secret that success in the blockchain and cryptocurrency industry is rare. Moreover, many truly innovative ideas are technically feasible, yet they’re affected by unfair market conditions present in the space. “Small cap” tokens, those with a market cap below 400 million in USD, usually fall prey to the hidden mechanics of centralized exchanges and never take off. This happens because they are unable to take advantage of decentralized exchanges due to their low levels of liquidity.
A solution to this problem could lie in the services that intermediate price feeds between centralized and decentralized exchanges so that a healthy ecosystem is built between them. XFai is a decentralized oracle service provider that seeks to balance the playing field between centralized and decentralized exchanges using a DEX Liquidity Oracle, or DLO. This consists of a set of autonomous liquidity management smart contracts for tokens with low trade volumes and market caps.
In more concrete terms, the XFai white paper defines the DLO as a “DeFi oracle which instead of providing only data in the form of price feeds and triggering third-party contracts, also actively provides and manages token liquidity on Uniswap and similar DEXs. This in turn allows ‘small cap’ token holders to earn token-denominated returns on autopilot.” In short, the DLO is a tool that allows “small cap” token holders to earn rewards in the same way holders of larger tokens do.
This mechanism would not only open new opportunities for “small cap” tokens and their holders, but in turn, funnel value from exchanges into XFai’s native $XFIT token. Holders of $XFIT receive important benefits in the ecosystem that is built by XFai’s DLO implementation.
First of all, profits and fees made by the ecosystem will be used to continuously “liquidity farm” the $XFIT token itself on all DLO pairs. This means that if profits are made on a certain token in a certain pair and exchange, the DLO takes the profit and uses it to farm liquidity in $XFIT on the corresponding pair and exchange. The result is that the XFIT token holders benefit from the upward trends of every token in the ecosystem. They also benefit from significantly lower fees when using the service as well as being able to trade directly with every new token on the DLO.
The $XFIT token is, in many ways, an aggregate way to participate in the growth of “small cap” tokens that XFai’s solutions enable. The asset will soon be available through an innovative funding model known as Liquidity Generation Event (LGE) which is set to go live on April 8. Watch the video about XFai here.
