Friends who are familiar with me should know that I am the first Builder in the Chinese currency circle to introduce the XAI project to everyone. So the brothers who follow me should be considered very early community members of the Xai project. As I previously shared on Binance Square, there are two ways to obtain Xai tokens at a very low cost:
(1) Participate in the Odyssey event: XAI Game Public Chain Odyssey Event Zero-cost Beginner’s Guide
(2) Participating nodes: Detailed interpretation of XAI game public chain Sentry node
(Congratulations to the brothers who have been following me and believe in my investment and research capabilities. You should be able to get coins at zero cost, but it is not too late to join now🤭)
Background review:
Xai, the game public chain, is currently developed and maintained by the development team of the Arbtrium (ARB) project, the largest Ethereum layer 2 project. In other words, like Arbtrium, Xai is supported by Offchain Lab!
We know that every blockchain project will have a foundation. The structure of "money" makes it easier for everyone to understand the structure of Xai:
Behind the Arbitrum Foundation is Offchain Labs
Behind the Avalanche Foundation is Ava Labas
Xai Foundation is followed by Ex Populus
Ex Populus raised $12 million (plus an undisclosed amount) 2 years ago, while Offchain Labs raised over $120 million. So Xai project is very rich.
Xai project token economic model
The Xai network and its ecosystem leverage Xai and esXai (managed Xai) to bring balance and integrity to the ecosystem. In other words, there are two types of Xai tokens: Xai and esXai.
1. Function and purpose of Xai Token
Xai is the native token of the Xai blockchain. Its functions are the same as those of tokens on mainstream Layer 1 (such as ETH) and Layer 2 (such as ARB, OP).
2. Function and purpose of esXai token
esXai is a special token that is not tradable and is mainly used for staking in the Xai ecosystem to obtain a variety of rights and interests.
2.1 esXai is mainly used to reward Sentry node operators and bring a series of privileges and benefits to these operators.
2.2 Staking esXai can enjoy the following rights:
Yield Account: Node operators who pledge esXai in this account can obtain more esXai income.
Culture Account: By staking esXai, node operators can participate in exclusive activities and NFT related to games launched on the Xai blockchain.
Governance Account: Node operators can obtain DAO governance rights through pledges, including the right to propose DAO/Foundation funds.
2.3 Operators can adjust their staked esXai between these three accounts at any time without incurring any penalties.
2.4 If you want to unstake, esXai has a 30-day unlocking period.
3. Xai and esXai exchange rules
Users can exchange between Xai and esXai in both directions. Depending on the direction of your exchange, different rules apply.
3.1 Exchange Xai for esXai
Users can exchange Xai for esXai at any time without any penalties or restrictions. The exchange ratio is always 1:1 (100%).
3.2 Exchange esXai for Xai
The process of exchanging esXai for Xai includes an unlocking period, and users can choose the unlocking period independently. The exchange ratio will increase with the extension of the lock-in period:
The minimum lock-up period of 15 days will provide a ratio of 1:0.25 (25%).
A medium 3-month lock-up period will provide a ratio of 1:0.625 (62.5%).
The maximum 6-month lock-in period will provide a 1:1 ratio (100%).
If the selected lock period is less than the maximum value (ratio <1:1), the corresponding number of esXai will be destroyed.
Users are free to cancel any esXai redemption process at any time.
Canceling any redemption before the end of the redemption process will void the entire process. Users will get back all of their esXai and will not receive any Xai.
3.3 The Xai Foundation may retain up to 50% of esXai that will be destroyed to support the network.
3.4 During the period when esXai is exchanged for Xai, esXai will still be automatically allocated to the income account, but only 50%.
3. Xai token initial distribution plan
Team: 20%
Ecology: 7.5%
Investors: 22.4%
Community, Node and Data Availability Committee: 50.1%
Here is a brief explanation of the Data Availability Committee (DAC): a collection of authorized parties responsible for ensuring the availability of data in the Arbitrum AnyTrust protocol chain.
4. Issuance and destruction of Xai and esXai
The maximum total supply of Xai and esXai is 2.5 billion tokens.
All GAS paid in the Xai ecosystem are paid with Xai and burned.
Daily Sentry node esXai emissions depend on the current circulating supply of Xai and esXai. By burning Xai as GAS in the Xai ecosystem, the Xai supply is reduced. During the redemption process (see "Xai and esXai Exchange Rules" above), the supply of Xai is also reduced by burning esXai.
The daily emission rate of esXai is dynamic and depends on the total supply of Xai and esXai. Once a critical threshold of total supply is reached, esXai’s emissions will automatically be halved. Conversely, if the total supply through burning falls below the halving event threshold, esXai’s emission rate can increase to accommodate demand. These two factors interact to create a flexible and adaptable supply mechanism. This mechanism ensures continued ecological rewards for Sentry nodes, which solve key problems for the chain (see my article for details: Detailed Interpretation of XAI Game Public Chain Sentry Nodes). At the same time, dynamic halving imposes constraints on the total supply by exerting negative pressure on the number of tokens in circulation.
......etc. This will continue forever.
85% of esXai emissions support the basic work of Sentry nodes, ensuring network integrity. The remaining 15% is allocated to a GAS subsidy node, which is used to create a GAS fee-free on-chain gaming experience for players, thereby reducing on-chain wear and increasing transaction volume.
5. Estimated Sentry node network rewards
Here are three scenarios for estimating the Xai rewards you might earn from running a Sentry node. These three scenarios are based on the following assumptions:
The sum of XAI and esXAI will never exceed 2,500,000,000. Given that the Xai ecosystem is dynamic, it is impossible to accurately predict the monthly token rewards for each Sentry key.
100% of GAS is burned, so there is no guarantee that the supply will always be inflationary, it may be deflationary.
The Xai Foundation will not sell more than 50,000 Sentry keys (a node can load multiple keys). This is expected to take 2-3 years. Sentry keys get more expensive over time.
The monthly esXAI amount per Sentry key may also fluctuate based on the number of staking participants in the ecosystem.
The meaning of the following three tables is that under the different circulation of XAI and esXAI tokens, the number of node keys activated in the network and the corresponding expected monthly token rewards per key:
Scenario A estimate: If there are a total of 750,000 XAI and esXAI tokens in circulation, then each Sentry key will receive esXAI rewards according to the following table:
Scenario B Estimate: If there are a total of 1,250,000,000 XAI and esXAI tokens in circulation, then each Sentry key will receive esXAI rewards according to the following table:
Scenario C Estimate: If there are a total of 2,187,500,000 XAI and esXAI tokens in circulation, then each Sentry key will receive esXAI rewards according to the following table:
6.Interpretation and analysis
Unexpectedly, you can actually see this? I will start a new analysis, but I can mention a few key points here:
XAI Token is a deflationary model.
The exchange mechanism of XAI tokens and esXAI tokens essentially reduces selling pressure.
The XAI game ecology is very strong, and even Tencent is a partner. Therefore, the above design to reduce selling pressure is essentially different from other projects. Other projects are to slow down the collapse time, while Xai can have enough time for the community to watch after the mainnet goes online. Choose to hold on to the explosive development of the Xai ecosystem.
If you are interested, you can read the following two articles. I have spent a lot of energy collecting, organizing, thinking, researching, and creating a summary of the projects:
【1】XAI Game Public Chain Odyssey Event Zero-Cost Beginner’s Guide
【2】Detailed interpretation of XAI game public chain Sentry node
