Despite its record growth, the crypto space remains bedeviled by a number of problems that affect token holders. One of these is that small cap tokens (those with a market capitalization below $400M million) do not provide liquidity providers returns denominated in their native token. These small caps often have the potential for higher returns because it takes less capital to move the market, but trading them entails swapping in illiquid pools that are prone to slippage.
And that’s where XFai comes in. XFai is a set of autonomous liquidity management smart contracts that allows holders of tokens with low trading volumes and small caps to earn better returns when providing liquidity, which subsequently increases their position in those projects. XFai’s impressive technology and tangible use cases mean it has already received the support of some of the biggest crypto investors including the founder of Bitcoin.com, Roger Ver.
Here, we’ll describe how XFai works and why it could become such a big hit in the crypto community.
Balancing the Playing Field Between CEXs and DEXs
Major decentralized exchanges (DEXs) like Uniwap share exchange fees with token liquidity providers, but the problem is that small cap coins are usually limited to centralized exchanges (CEXs) because that’s where the liquidity is. As a token holder, if there isn’t much liquidity on a DEX, there is less incentive to place your tokens there, and you are effectively shut out of those potential earnings.
XFai solves this problem by using an advanced oracle solution to gain accurate price feeds from CEXs, and then directing liquidity at this price point on DEXs. XFai’s DEX Liquidity Oracle (DLO) is the technology that makes this happen and the upshot is that holders of small cap tokens can generate earnings on their assets, just like holders of major tokens like ETH or DAI can. This is something that the world of DeFi has long needed and XFai is finally making it a reality.
Backed by Strong Fundamentals
The success or failure of any crypto project usually lies in its real world use cases. And even though XFai has generated a lot of buzz around its technology, it is also backed by very strong tokeonomics.
For starters, XFai has a big focus on community involvement as its native XFIT token is used for improvement proposals, voting and onboarding new tokens into its list of supported tokens. This should ensure organic growth that keeps pace with community demands. Users of XFIT also benefit from lower fees when accessing services through XFai, and all profits and fees made first by the DLO and other products are used to continuously farm the XFai token itself on all DLO Uniswap pairs. This both increases liquidity and grows incentives. As a result, the XFIT token can ride any rallies related to any other token in the XFai ecosystem, further benefiting token holders.
A Big Support System and Bright Future
XFai has already accomplished a lot in a short amount of time. The project has received backing from major investment firms like Vendetta Capital, who have also invested in popular projects like Polkastarter, as well as investments from Rarestone Capital, and AU21 among others. Even Roger Ver, CEO of Bitcoin.com and one of the key early believers of Bitcoin and blockchain technology, has backed XFai, making his most significant investment to date in a blockchain project.
Ver went on record to say, “XFai enables actual decentralization by allowing small and mid-cap tokens to finally have a seat at the table. I look forward to watching XFai become a game-changer in the DeFi space.” The project has also reimagined how early investors get involved by allowing everyone a fair chance through its Liquidity Generation Event. Coupled with its advanced oracle solution, it’s easy to see why so many big-name investors are bullish on XFai’s vision for shaking up the long tail of DeFi assets.
Disclaimer: The Daily Chain encourages you to carry out your own research before you make any form of investment and educate yourself about how to stay safe in the crypto space. This article is informational/educational and does not represent financial advice.