A Little bit more about Tixl's "staking" program
The first article I wrote was about Tixl's staking program and how intelligent I think it is. If you want to read it (again), check this link. I published that article on April 30, 2021.
I'm writing this new article on July 2021, basically 2 months later. During this period, I've seen people asking "where is the staking program?" or "it's been 2 months already, when will we be able to stake Tixl?".
What Tixl has done already
People who have been reading my articles already know that I like the Tixl Project and I defend it and I will do it again. The team is building something new from the ground up. This is not a simple Level 2 network project, on top of some existing blockchain. Let me list all they did, that we can see:
- The Autobahn Network — a Level 1 network built to be able to integrate any other blockchain in the world — and it has Level 2 network properties, meaning: it transports any token in seconds for a very low fee, as long as that token is integrated to it. Yes! just like Lightning Network as some people keep mentioning — except that LN only does this for BTC.
- They integrated BTC and ETH chains to the Autobahn, with a total 6 different cryptocoins integrated (BTC, ETH, USDT, USDC, EURS and TXL/ERC20). Lightning Network doesn't to this…
- They developed the Tixl Wallet, to show the world that the Autobahn Network isn't just a dream. It's real! And they had a great idea to integrate it to Telegram so people don't have to keep on copying/pasting the wallet address.
- They created the CCB (Cross-Chain Bridge) between ETH and BSC (or ERC20/BEP20) — and they are adding new ERC20 coins (based on ETH chain) and now they will use it to integrate other L1 blockchains to the Autobahn Network.
That is a lot! And now their priority is to implement Smart Contracts. Some people might ask why: "Why implement smart contracts before staking? Staking is more important because it will attract more investors."
In order to answer this question, let's think a little bit.
What is staking?
In very simple words, staking is when an investor puts his assets (in the cryptoverse, we're talking about tokens) somewhere, for some time (and maybe even more conditions). If all these conditions are met, then the investor (or staker) will receive a % of what he invested. The % the staker will receive can be a fixed or a variable value (similar to a CD at a bank). Almost forgot to mention: you don't want this to be controlled by a person right?
If it didn't become clear yet, let me be explicit: this is a contract. For example: if you send a minimum 1,000 tokens to the XXX address and keep them there for at least 3 months, you will receive a 10% per month, retroactive to the months before you completed the 3 months. From the 4th month on, you will keep receiving 10% over your initial staking amount only (so, no compound interest), until you decide to get your tokens back.
And who do you think will control the variables, calculate the values and transfer the amounts to your wallet? A person? Or do you think this is automatic? Yeah… not a person, this is a program. Well, that is the basic definition of a smart contract.
You may say "but I see tokens that were created 2 weeks ago and already have smart contracts, and have staking". Well, they didn't implement Smart Contracts. They just programed the smart contracts that were created by the underlying blockchain "owner". ETH created smart contracts. Projects built on top of ETH just program them. That is much easier than what the Tixl Team is doing.
I'd like to mention Cardano here because they are also implementing Smart Contracts and they are attempting that for quite some time already. They are taking a long time to do it. Cardano's marketcap is just around $3 billion. Tixl's marketcap is under $15 million. What seems harder: Cardano's marketcap go up to $300 billion or Tixl's to go up to $1.5 billion? In my opinion, at $1.5 billion, TXL has not yet reached all their potential while, at $300 billion, Cardano is already over it's potential. But that's another story.
I wrote this just to say: there is no staking program without Smart Contracts.
What changed in the original staking program?
Not much, in my opinion. The main concepts remain the same:
- The Tixl Team wants to avoid having to use Tixl Treasury to finance the staking program. That is why the plan is;
- To use the revenue generated by the bridge buy $TXL from the market (driving $TXL price up) and distribute them to stakers.
This is not mentioned anywhere yet, but I could bet that the revenue generated by the Autobahn Network, in the future, will also be used somehow to benefit stakers and validators.
We do have, now, a few more detail on how things are supposed to happen.
I understood that the staking concept implemented in places like Pancakeswap is based on Liquidity Pools. You have to provide liquidity to both sides of the trade.
For the people who don't know what this means, let me try to explain. Suppose you have 10 BNB and want to buy TXL. You connect your wallet to Pancakeswap, then you find the pair you want to trade (BNB/TXL) and submit your order. As a trader, you're just bringing in one side of the trade (BNB in this example). Somebody else has to bring the other side. How long will it take until somebody actually does that? What if nobody brings that in?
Pancakeswap (and other DEXs that do staking) implemented a solution which is very common in the Financial Services world: they offer a reward for people to lend their money to the Liquidity Pool. That way, when somebody wants to buy/sell, there is currency in there and the transaction happens.
There is something else, however, that I didn't mention yet: the stakers have to provide both sides of the trade currencies, and the $ value must be equivalent. In our example, if 1 BNB = 1,000 TXL, a staker that wants to provide 10 BNB in liquidity will necessarily have to provide 10,000 TXL too. One of the possible consequences of this is something called impermanent loss (the amount of one of the currencies you provided might actually go down). I will not get into details on what is impermanent loss for 2 reasons:
- It won't happen with Tixl's staking anymore because of how they will implement their staking program;
- It will take too long to explain — please comment if you want me to write about this in the future.
Something different that Tixl will implement
Because of the CCB, Tixl will be able to implement Liquidity Pools on each side of the bridge. That is important because that means that the stakers won't have to provide both sides of the trade. They can choose which side they want to stake. Of course, there will be a bot calculating what is the ideal % prize to incentivize more one or the other side of the bridge.
Keep this in mind: the CCB as it is today, works only between a few BSC/ETH tokens, but the team's goal is to "add all major EVM networks this year (2021) and enable direct bridging between all of them."
This is probably the buggest difference between the initial staking plan and this new one: in the first version, you would have to take your TXL tokens to the Autobahn. Now you will be able to stake them directly in the bridge.
In order to encourage TXL holders to stake their tokens, they will get paid for any buy/sell transaction where TXL is one side of the trade. This is much better than providing BNB/TXL liquidity and get nothing when a ETH/TXL trade is made. Once again, I think this is genius, but very subtle…
We knew from the very beginning, that TXL tokens would be, at some moment, burned and that TXL is a deflationary crypto. We just didn't know how this was going to happen. Now we have some information, and it was very explicit.
The CCB fees are a revenue stream and this revenue will be used to buy $TXL. Not all the $TXL that was bought will be put into the farming pools, however. Now we know that 10% of this $TXL will be burned.
I still think this project is great and what the team is doing is very smart. Everything they implement seems very in-line with the right economic/financial/business concepts a good business should follow. Let's wait and help the team accomplish their next big goal: SMART CONTRACTS!
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If you think what I wrote makes sense and are planning to buy TXL because of this, contact me. I can help you: