The DeFi ecosystem took the crypto ecosystem by storm in 2020 after undergoing a rapid bullish rally. The landscape of finance based decentralized applications witnessed billions of dollars in investment, as certain projects such as Yearn Finance, Uniswap, and SushiSwap created a massive stit in the market. However, after the momentum started to decrease, various drawbacks began to surface. Inefficient code led to several hacks, security vulnerabilities and the space became increasingly risky after a while.
The trust factor in DeFi started to decrease and liquidity was continuously drained from the space. While the potential in the DeFi space remains, xSigma might be able to change and bring forward a new layer of trust with their protocol.
xSigma: Bringing Liquidity back into DeFi
xSigma is releasing a new DeFi DEX protocol with the objective of entering the decentralized space, focused on decentralized exchanges. One of the key differences between other platforms and xSigma remains that it is the first DeFi projected backed by a NASDAQ-listed organization. ZK International Group Co., Ltd.(Nasdaq: ZKIN) is currently providing capital for its wholly-owned subsidiary, i.e xSigma.
In order to minimize risk for users, xSigma’s DEX protocol will be rewarding its liquidity providers and its fundamental success will depend on these token holders and liquidity providers. According to xSigma, an early liquidity provider will be rewarded from the first week of the protocol’s launch in the current manner:
- LPs will get 2x rewards during 1st week
- LPs will get 1.5x rewards during the second week
AMBCrypto recently sat down with Alex Lebed, xSigma DeFi CTO, and discussed the various fundamentals and the future roadmap of the xSigma protocol.
Question 1: DeFi has been a highly influential space in the digital asset industry during the course of 2020. With respect to other liquidity providing platforms, how does xSigma stand out in terms of its working principle?
Alex- When we started working on the xSigma DEX, we asked one simple question: How can we create a platform that fixes all of the problems of existing DEXes? We then got to work. We found that much of the issues plaguing DeFi today stem from liquidity, or a lack thereof. xSigma has a strong focus on liquidity to enhance the user experience. We believe more liquidity equals more stability, and that gives us the ability to process bigger trades and higher volumes. For traders, it also means lower commissions on smaller trades.
Our working principle is to provide an easy, intuitive, and glitch-free interface for people to exchange one stablecoin for another. Really, it should be that simple.
Question 2: What are the key advantages of becoming a liquidity provider with xSigma?
Alex- The easy, intuitive interface I talked about earlier doesn’t just apply to traders, but to liquidity providers as well. Liquidity providers have the opportunity to earn fees for the capital they provide. Liquidity providers can also rest assured knowing that they are contributing to a platform that was conceived by a publicly-traded company that has satisfied all regulatory requirements.
Early adopters — that is, liquidity providers that join us before public launch — have the opportunity to earn significant rewards in the form of SIG tokens.
Question 3: xSigma has a unique SIG token associated with its platform. Can you explain its functionality within the exchange and how it is incorporated into the LP rewards?
Alex- SIG is essentially a governance utility token for the platform. It has in-built governance protocols, including voting and accrual mechanisms (live in a few weeks after launch). Liquidity providers are rewarded with SIG tokens over time.
Liquidity providers receive SIG tokens by providing liquidity (i.e., “farming”). Liquidity providers can also sell their SIG tokens.
Question 4: xSigma is a DEX decentralized stablecoin exchange that provides the best exchange rates in the market. How is the platform able to provide that to the users?
Alex- Our focus on optimizing liquidity allows us to offer the best exchange rates. That’s further optimized by our subsidy program, which will reduce gas for transactions in the first quarter of operation. This will provide the absolute cheapest exchange rates available anywhere.
Question 5: According to xSigma, 60% of all SIG tokens will be allocated to LPs, 30% to R&D, and 10% to growth funds. Can you expand on the utilization of growth funds?
Alex- xSigma Labs retains 30% of the token supply. This is not an ICO — this is allocated for xSigma. The tokens are released gradually and will be used by our developers to support the development and future iterations of the protocol.
Question 6: What does the immediate roadmap for xSigma look like in 2021?
Alex- In the immediate term, we are focusing on launching our DEX. We are currently in the testing phase and are working with liquidity providers to put the finishing touches on our platform before launch.
Following the launch of the DEX, we plan on expanding our efforts to onboard new users and grow the ecosystem. Beyond 2021, we have a very ambitious roadmap that includes developing a unified DeFi ecosystem that extends to custodial regulated services, derivatives trading, a non-custodial wallet, and a lending pool. You’ll hear a lot more about our forthcoming product developments over time.
For more information, please visit their official website.
Disclaimer: This is a paid post and should not be considered as news/advice