August 15th: Important Updates to XIO Liquidity Program (XLP)

We have simplified and streamlined the XIO Liquidity Program. Starting August 15th, three important changes will take place to the XLP. Below is the updated Rewards structure. With over 20M tokens remaining in the XLP Fund, we are still in the highest earning bracket at time of writing.

Three Changes

1. XLP Rewards will now be automatically paid on a monthly basis. No withdraw form needed.
2. XLP Rewards will no longer be earned on a prorated basis. Instead, Citizens earn rewards only for completed calendar months.
3. XLP Rewards formula has been simplified by taking out the “Total ETH in Pool” parameter.

As a reminder, all outstanding XLP balances will be paid on August 15th when these new changes are activated.

The rest of this article will break down the three new changes in greater detail. If you are still unsure of how many rewards you can expect to make, the end of the article will showcase multiple different examples/scenarios.

Update #1 | XLP Rewards will now be automatically paid on a monthly basis

Previously, you only earned your XLP Rewards after submitting a Withdraw Form request. This created some unnecessary friction for Citizens and made it difficult for us to accurately project future XLP Funds.

In the updated XLP, you no longer need to fill out a Form and rewards will be automatically sent to the wallet you whitelisted.

Funds will still be paid out on the 15th-20th each month.

Update #2 | XLP Rewards will no longer be earned on a prorated basis.

Previously, Citizens earned a prorated amount of XIO depending on when they joined the XLP. This has caused some confusion and complexities when trying to calculate rewards.

In the updated XLP, Rewards will only be earned for completing a full calendar month. This means, to be eligible to earn rewards for a month, you must have deposited XIO tokens before the start of the month and did not withdraw any tokens until after the end of the month (30/31st).

To put it another way, if you make a deposit in one month, you won’t start earning rewards until the following month. If you withdraw at any part during a calendar month, you will lose your rewards for that month. Let’s look at some examples.

Deposit Examples: 

• If you Deposit on August 3rd, you won’t start earning interest until September 1st, and won’t get paid until October.
• If you Deposit October 15th, you won’t start earning interest until November 1st, and won’t get paid until December.
• If you Deposit on November 30th, you won’t start earning rewards until December 1st, and won’t get paid until January.

The key takeaway here is you will not be earning rewards for the month you deposit, so it may be better to do this at the end of the month.

Withdraw Examples:

• If you Withdraw XIO from the XLP on November 30th, you won’t earn any tokens for the month of November.
• If you Withdraw XIO from the XLP on September 3rd, you won’t earn any tokens for the month of September.
• If you Withdraw XIO from the XLP on March 15th, you won’t earn any tokens for the month of March.

The key takeaway here is that you won’t earn rewards for the month you withdraw, so it may be better to do this at the beginning of the month.

Let’s put these two things together and do a few more examples.

• If you deposit on August 15th and withdraw on October 15th, you will only earn rewards for the month of September.
• If you deposit on September 1st and withdraw on November 30th, you will only earn rewards for the month of October.
• If you deposit on August 15th and withdraw on September 30th, you will not have earned any tokens as you did not stake for an entire calendar month.
  

For consistency, the deadline for the first of the month will be in UTC-07:00 (PST)

It is important to note that the moment you withdraw any of your XIO for any reason, you stop earning rewards and your multipler is reset.

Update #3 | Simplifying the XLP Rewards Calculator

We have simplified the XLP Rewards calculator by taking out the “Total ETH in Pool”. There are now only three things you need to take into consider to estimate your monthly reward. Here is the simplified Rewards Calculator.

XLP Interest Rate * XLP Deposit Balance * XLP Multiplier

The XLP Interest Rate is currently 10% and is based on how many Funds are in the XLP.

The XLP Deposit Balance is how much XIO the Citizen deposits. Each deposit is treated separately.

The XLP Multiplier ranges from 1.2x to 3x depending on how many calendar months you have completed.

Please see the graphic at the top of the article to view these rates. Let’s run through more examples.

EX #1: Citizen Deposits 10,000 XIO on January 15th, 2021 and withdraws 10,000 XIO on April 20th, 2021

• The XLP Interest Rate is 10% (based on XLP Funds)
• The XLP Deposit Balance is 10,000 XIO
• There is no XLP Multiplier
• User will earn 1,000 XIO on March 15th (Rewards from February)
• User will earn 1,000 XIO on April 15th (Rewards from March)
• User will stop earning rewards in months after March.

EX #2: Citizen Deposits 10,000 XIO on January 2th, 2021 and withdraws 10,000 XIO on July 22th, 2021

• The XLP Interest Rate starts at 10% (based on XLP Funds)
• The XLP Deposit Balance is 10,000
• The XLP Multiplier of 1.2x begins after April 
• User will earn 1,000 XIO on March 15th (Rewards from February)
• User will earn 1,000 XIO on April 15th (Rewards from March)
• Multiplier now becomes 1.2X as Citizen is moving into the 3rd calendar month
• User will earn 1,200 XIO on May 15th (Rewards from April)
• User will earn 1,200 XIO on June 15th (Rewards from April)
• User will earn 1,200 XIO on July 15th (Rewards from June)
• User will stop earning rewards in months after June.

EX #3: Citizen Deposits 10,000 XIO on January 30th, 2021 and withdraws 10,000 XIO on May 2nd, 2022

• The XLP Interest Rate starts at 10% (based on XLP Funds)
• The XLP Deposit Balance is 10,000
• The XLP Multiplier of 1.2x Multiplier begins April 2021
• The XLP Multiplier of 1.5x Multiplier begins July 2021
• The XLP Multiplier of 3x begins February 2022
• User will earn 1,000 XIO on March 15th (Rewards from February)
• User will earn 1,000 XIO on April 15th (Rewards from March)
• Multiplier now becomes 1.2X as Citizen is moving into the 3rd calendar month
• User will earn 1,200 XIO on May 15th (Rewards from April)
• User will earn 1,200 XIO on June 15th (Rewards from May)
• User will earn 1,200 XIO on July 15th (Rewards from June)
• User will earn 1,200 XIO on August 15th (Rewards from July)
• Multiplier now becomes 1.5X as Citizen has completed 6 calendar months
• User will earn 1,500 XIO on September 15th (Rewards from August)
• User will earn 1,500 XIO on October 15th (Rewards from September)
• User will earn 1,500 XIO on November 15th (Rewards from October)
• User will earn 1,500 XIO on December 15th (Rewards from November)
• User will earn 1,500 XIO on January 15th (Rewards from December)
• User will earn 1,500 XIO on February 15th (Rewards from January)
• Multipler now becomes 3x as Citizen has completed 12 calendar months
• User will earn 3,000 XIO on March 15th (Rewards from February)
• User will earn 3,000 XIO on April 15th (Rewards from March)
• User will earn 3,000 XIO on May 15th (Rewards from April)
• User will stop earning rewards in months after April

Remember the Reset.

If you withdraw any XIO from the XLP for any reason, you will no longer earn rewards on any of your XIO. This means if you make monthly Deposits of 100 XIO each month for 15 months, and in the 15th month you withdraw 15 XIO, you will stop earning interest of any kind and your multiplier will reset.

All previous added liquidity deposits will never earn any more XIO rewards. All future add liquidity will earn rewards. If you withdraw any amount we recommend you withdraw all of it and then after that add some back if you want to still earn any rewards.

Token Discrepancy Disclaimer

From a token earning perspective, there are a few ways this new system allows Citizens to earn more XIO than what was previously possible.

In this system, the multiplier does not decrease based on how many ETH are in the pool.

Additionally, as XIO is paid out monthly, Citizens can now re-add their Rewards on a monthly basis for compounding interest. We think that is pretty awesome.

For a very small subset of Citizens, this new system may have a negative impact on expected earning potential. Specifically, anyone in the group of Citizens who is on pace to withdraw after 12+ months.

To counteract this token discrepancy and ensure all Citizens receive the expected amount of rewards they anticipated, the XIO Foundation will take any discrepancies on a Citizen by Citizen basis to honor any differences this change to the Rewards structure causes.

To put it simply, if you as a Citizen were expecting to withdraw 10,000 XIO rewards at the end of the year based on the previous XLP but this model only rewards you with 8,000 XIO, we will connect with you to cover this difference.

The XLP is a continuously evolving program that we are trying to make better each and every day. With this, we must make it clear that XLP and the rewards structure within it is subject to change as needed by the XIO Foundation.

Closing Remarks

We hope that all Citizens can understand not only what these new changes are but why we made them. This Rewards structure is meant to help us better predict XLP rewards, simplify the process for Citizens, and create a long term sustainable model.

Additionally, while this new system should help make the XLP more efficient, we are internally working on a solution that makes it even better. Behind the scenes, we have been creating a liquidity incentive protocol that automates this entire process in a permissionless and decentralized manner. Instead of getting paid on a monthly basis, rewards will be paid in real time through a front-end interface.

We briefly talked about and teased this protocol a few months ago in an interview with Jeff Kirdeikis. Click here to listen and keep on the lookout within the group in Q4 for this update.

If you have any questions, we now have a Telegram group specifically for the XLP. Join by clicking the button below!