xSynth Token (XSYN)
Last updated
Last updated
The xSynth Network token (XSYN) incentivizes coordination and growth within the xSynth Network. It has two primary functions: (a) Staking and (b) Governance.
XSYN Stakers earn weekly rewards for collateralizing the network. These rewards are paid in two ways. One is from trading fees, which are charged to traders. The other is inflationary rewards, which are newly minted XSYN tokens held in escrow for a year. Escrow-locked XSYN tokens can be staked during this escrow and provide further rewards to stakers.
xSynth distributes weekly inflation rewards based on Target Staking Ratios guidelines and variables set.
The goal is to achieve a target staking ratio by adjusting the inflation rate weekly. The staking ratio is defined as the percentage of SYN collateral in staked addresses versus the total XSYN collateral.
The inflation rate changes per the following rules:
Staking ratio >70%: Inflation decreases by 5%.
Staking ratio 60-70 Inflation decreases by 2.5%.
Staking ratio <60%: Inflation increases by 5%.
For up-to-date inflation data.
Please note that these ratios can change based on SCCPs approved by the Swiss Council.
xSynth Stakers are assigned a percentage of debt ownership proportion to their amount of XSYN staked. Then their voting weight is quadratically weighted for all but the Treasury Council. Voting is done through the fully on-chain xSynth Governance Module.