XEN is a token that can be minted for free. The only thing you need to create XEN is an Ethereum-compatible wallet that interacts with the XEN smart contract to claim a cRank and some ETH to pay for the gas fee. Despite the fact that XEN can be minted for free, it derives its value from the gas price spent on the transaction, the seize of the network, and the time spent between the claim and the mint of XEN. The difficulty of creating the token is time-adjusted and it’s also proportional to the number of participants. At the beginning, the inflation will be very high and at one point, the algorithmic inflation adjustment will achieve a 0% increase rate and the global inflation will reach a flat 2% per year. Here, we present the tokenomic theory and the mechanisms behind different functions.
The general XEN minting formula is:
XEN reward = AMP * t * log2(dR) * (1+𝙴𝙰𝙰(𝚌𝚁𝚞))
AMP – reward amplifier
cRg – global cRank
cRu – your rank
dR – delta rank (𝚌𝚁𝙶 − 𝚌𝚁𝚞)
t – mint term days
When you connect your wallet, and claim your cRank (cRu), this is an indication of how many people interacted with the contract before you. You need to indicate your mint term (t) of how many days you’re willing to wait before minting your rewards. After you do this, every additional person that interacts with the XEN smart contract makes the global cRank (cRg) greater. This means more tokens for you and for everyone else.
Your end Reward (Ru) is computed by multiplying the difference between your cRank (cRu) against the Global cRank (cRg) , multiplied by the number of Mint Term days (T), by time-dependent Reward Amplifier (AMP) and by an Early Adopter Amplification factor (EAA):
R𝚞 = 𝚕𝚘𝚐𝟸(𝚌𝚁𝙶 − 𝚌𝚁𝚞) * 𝚃 * 𝙰𝙼𝙿(𝚝𝚜𝟶) * (𝟷 + 𝙴𝙰𝙰(𝚌𝚁𝚞))
Rewards amplifier (AMP)
At the same time, the reward amplifier (AMP) is a constant amplifying rewards by 3,000 and decreasing by 1 every day until it reaches the plateau of 1. This mechanism reduces XEN’s inflation.
The inflation rate will be very high in the initial phase of adoption, and this is because of the amplifier, and it will decline progressively.
Early Adopter Amplification (EEA)
Early Adoption amplifier (EEA) has as a scope rewarding early XEN aparticipants and putting a price pressure for the late comers.
𝙴𝙰𝙰(𝚌𝚁𝚞) = 𝟶 . 𝟷 − 𝟶 . 𝟶𝟶𝟷 * [𝚌𝚁𝚞 /𝟷𝟶𝟶, 𝟶𝟶𝟶]
where EAA starts from 10% and decreases in a linear fashion by 0.1% per each 100,000 increase in Global Rank.
Moreover, until the initial phase reaches 5,000 users, the Free Mint function will allow for the claiming of XEN for a maximum term of 100 days. Once the 5,000 mark is passed, Free Mint will increase logarithmically according to the following function:
f𝚛𝚎𝚎𝙼𝚒𝚗𝚝𝚃𝚎𝚛𝚖𝙻𝚒𝚖𝚒𝚝= 100 + log2(cRg) * 15
where 𝚌𝚁𝙶 is the current Global Crypto Rank.
As more people join the network, it will get harder to mint more tokens due to the larger pool of people and statistical difficulty, and it will be necessary to extend the wait period to earn more rewards. The maximum Free Mint Term can exceed 550 days.
The protocol incentivizes early claims for the maximum allowed time and limits the number of whales to a 100-day term and 5,000 participants. After that it’s possible to extend time withing the limits of the f𝚛𝚎𝚎𝙼𝚒𝚗𝚝𝚃𝚎𝚛𝚖𝙻𝚒𝚖𝚒𝚝 formula.
XEN rewards need to be minted within one day of the end of the term. Each additional day of delay equals a penalty.
The penalties are applicable as follows:
0 days = 0%
1 = 1%
2 = 3%
3 = 8%
4 = 17%
5 = 35%
6 = 72%
7 = 99% of APY rewards is lost
The user can always return to mint his remaining 1% even after the 7 day period passed.
XEN tokenomics is enhanced by an APY for staking XEN.
When users stake XEN, the tokens get burned, reducing the total global supply of XEN. When the stake ends, the tokens are minted together with the accrued APY. The maximum stake time is 1,000 days and the APY starts at 20% and declines by 1% every 90 days to arrive at 2%. Once it reaches 2%, it remains fixed. Users should be aware that ending the stake too early will incur a loss of the APY rewards.
The APY is non-compounding and is calculated according to the following formula:
𝚁𝚞 = 𝚂𝚞 * 𝙰𝙿𝚈 * 𝚝 / 𝟷𝟶𝟶 * 𝟹𝟼𝟻
where 𝚂𝚄 = amount of staked XEN
𝙰𝙿𝚈 = 𝚖𝚊𝚡(𝟸𝟶 − 𝚍𝚝𝙶 / 𝟿𝟶 , 𝟸)
where 𝚍𝚝𝙶 = days since Genesis.
Now that you know what’s the tokenomics of XEN and how it works read our game theory to get the best inflation rate for yourself.