Today brings an important milestone for UTK and the entire xMoney ecosystem. One in which we share the first governance proposal and referendum, setting the context and making preparations for the transition to UTK 3.0 economics.
The xMoney transition, covering the new economics, utility and mechanics of UTK, has been defined in this post published on the 5th of July 2023: https://www.xmoney.com/growth
We highly recommend giving it a careful read, and coming back with feedback and thoughtful improvements. This will be the very first xMoney referendum and governance vote. It will start on 07.08 at 18:00 UTC and will involve all UTK ESDT holders (UTK ERC20 holders will need to bridge their tokens from Ethereum to MultiversX through bridge.multiversx.com or to withdraw from supporting exchanges, like Binance, their UTK as an ESDT on MultiversX).
This is an exciting upgrade with many productive conversations on all xMoney communication channels. To expand this conversation, we have an overview with the most important resources in this doc, that will also be shared in a Twitter thread. We have also added an FAQ answering the most important and frequent questions of the community.
Below you can read the executive summary and the heart of the proposal.
UTK 3.0 – Design, Economics, Benefits
Token Context and Reasoning
The UTK token was introduced in 2017 as an ERC20 token on the Ethereum blockchain with a predetermined maximum supply of 1 billion UTK as stated in the whitepaper at that time. Influenced by community feedback and market conditions during the ICO, the decision was made to burn and remove 500 million UTK from circulation before the actual token’s launch.
In early 2022, UTRUST, the company behind the UTK-powered Utrust platform, was acquired by Elrond, now known as MultiversX. Following this acquisition, the Utrust became a part of the MultiversX family, and UTK token was deployed on the MultiversX blockchain as an ESDT token, co-existing with the original ERC20 version of UTK on the Ethereum blockchain. This dual-presence is upheld via the MultiversX bridge found at: https://bridge.multiversx.com/.
Transitioning to the MultiversX blockchain has provided immediate advantages for UTK, such as faster transaction confirmations, lower fees, listing on top decentralized exchanges (DEXs) built on MultiversX like xExchange, and integration with the xPortal app, a non-custodial wallet used by over a million users.
In light of UTK’s availability on the MultiversX blockchain, the teams of Utrust and MultiversX came to a consensus in February 2022 to introduce a fresh tokenomics model for the UTK token, dubbed UTK 2.0. The core objective of UTK 2.0’s tokenomics was to facilitate the continued evolution and expansion of the Utrust platform by incorporating new features and services such as cashback for users and merchants, and staking.
In March 2022, MultiversX, formerly Elrond, further announced the acquisition of Twispay, a Romanian e-money institution and fiat payment provider. With the combined acquisitions of Utrust and Twispay, MultiversX is now able to support both fiat and cryptocurrency payments. This development led to the announcement during the xDay conference in November 2022 that Twispay and Utrust would merge into xMoney, a consolidated crypto-fiat payment network.
In alignment with the announced xMoney goals, an update to UTK’s tokenomics will benefit all the players by leveraging the next expansion step of xMoney.
Thanks to the xMoney integration into the MultiversX ecosystem, xMoney is in a position to have better technology, a vertically integrated product, and new features and product modules. But in addition to all that, 100x more community, 100x more users and investors, 100x more partners, 100x more businesses integration. This leads to volumes, token alignment, and expansion.
Guilds, an important catalyst for growth
Proof of Stake (PoS) protocols, exemplified by platforms such as MultiversX, establishes network security and transaction validation through validators who engage in “staking” their tokens. Additionally, they may incorporate tokens delegated to them, ensuring their eligibility to contribute towards fortifying the blockchain and verifying each block. In the context of a PoS blockchain, token staking and locking prove to be fundamental for maintaining network health.
In our “Guilds” initiative, we have sought to incorporate and augment these concepts, thus enhancing the significance and utility of token staking and locking within xMoney network. Consequently, rather than simply engaging in token staking and locking for a predetermined duration and subsequently unlocking certain benefits such as cashbacks, we have introduced the concept of Guilds. These bear some resemblance to the validators within PoS blockchains, but also offer unique features.
Let’s delve into the similarities. Any user can establish a Guild (staking pool) and assume the role of a Guild Master (validator), provided they pledge (lock) a minimum number of UTK and feature among the top Guilds eligible for activation at any given time. (We will initially limit the number of active Guilds to 50, but will expand this over time).
Users can pledge (stake/delegate) any amount of UTK they prefer, by choosing one or multiple Guilds (validators). While the standard Annual Percentage Rate (APR) and cashback remain constant across Guilds, certain distinctions do exist, which we shall discuss later.
Let’s now examine how Guilds differ. Despite their initial similarities, we anticipate that over time Guilds will begin to diverge in their offerings and the process of selecting a Guild will become increasingly crucial. This is due to the ability of each Guild Master to elevate their Guild by offering additional benefits beyond the standard ones. They will have the opportunity to form unique partnerships and agreements with merchants and sponsors and provide additional rewards such as bonuses, discounts, loyalty points, NFTs, etc. The potential for Guild enhancement is limited only by the Guild Master’s creativity, their negotiating skills, their ability to promote their Guild, and attract more users.
Consequently, we posit that Guilds represent more than just staking pools; they essentially serve as conduits connecting shoppers with merchants. We plan to develop tools for Guild Masters that will facilitate the efficient deployment, tracking, and management of discounts, loyalty bonuses, and more.
By instituting this structure and incentives, Guild Masters are motivated to draw more users to stake in their Guilds. Moreover, they have a direct incentive to secure exclusive deals and promotions from merchants and sponsors, thereby distinguishing their Guild and driving more sales.
Over time, we foresee the emergence of more specialized Guilds, either catering to specific regions or countries, or focusing on particular niches such as tech, fashion, or groceries. We also anticipate the involvement of a diverse set of Guild Masters from various backgrounds and passions, including influencers, streamers, entrepreneurs, e-commerce platforms, merchants, etc.
The Guild strategy will foster a robust environment and potent network effect, ultimately creating a positive feedback loop that will attract more users, draw more merchants, and stimulate increased sales.
Token economics model
Below we present the UTK 3.0 token economics model, insights and benefits. This ties together the most important lessons and aligns strategic stakeholders with the growth of the ecosystem.
- Current circulating supply: 651,731,810 UTK
- Rewards & Cashback: 225,000,000 UTK
- Growth and Reserve Pool: 123,268,190 UTK
Thus Max. Supply: 1,000,000,000 UTK, as was envisioned initially in the 2017’s whitepaper.
Incentives, alignment, growth
The primary purpose of UTK and its tokenomics is to jumpstart and reinforce desired behaviors like accepting crypto and fiat for businesses, and paying with the same for users so that the desired outcome would be: more businesses will be onboarded into the ecosystem and a larger TPV (Total Processed Volume) is achieved.
Here are the main stakeholders, the flywheel they form, and the incentives that are setting the flywheel in motion and reinforcing it:
Businesses – As the primary focus of a B2B business model, the community should prioritize crafting a compelling, straightforward, and exciting proposition for businesses. Beyond the advantages of accepting cryptocurrencies, xMoney offers opportunities for merchants to expand their brand and boost sales by joining one or more Guilds and/or offering rewards and incentives to these Guilds and their users. The community might consider providing merchant cashback and/or promotional zero transaction fees to attract new merchants.
Users – The model promotes incentives for users to continue shopping with merchants and partners in the ecosystem. Growth and reinforcement incentives are tied to Guilds where users can lock their tokens for rewards (up to 15% APY), and cashback rewards (up to 8%) for all purchases made on the xMoney network or with xCard (if they choose to).
Token Holders – We aim to establish straightforward and aligned incentives for users to retain Tokens and contribute to the network by introducing xMoney to new businesses and participating in the expansion and success of the xMoney merchant network by establishing Guild pools or joining one.
Ecosystem Partners – These include cryptocurrency exchanges, e-commerce platforms, payment companies, and financial institutions. They are encouraged to pledge and hold UTK tokens in correlation with their client network size and anticipated transaction volume via xMoney’s services. UTK holders who pledge their tokens can gain access to various tiers of DeFi products and services depending on the size and duration of the pledge, potentially in the form of spending rebates, pledge yields, among others.
In short, the most important benefits unlocked and enabled are:
- Rewards in the form of UTK cashback – obtainable through the xPortal app, depending on the purchases you make at any xMoney merchant or via xCard (online or offline at any merchant not only xMoney’ merchants).
- Rewards in UTK for locking UTK into one or more staking Guilds.
- Guilds as the mechanism tying everything together and expanding utility by giving Guild Masters the tools and possibilities to experiment with:
- buybacks & burns
- new loyalty programs
- different cashback programs
- discount or bonus programs
Please be aware that any Token incentives are simply additional aspects of the ecosystem and do not replace the fundamental self-sustaining value proposition or function of the xMoney business model and solution.
That being said, here are the most important things to know about the current referendum or governance process.
What is governance?
Governance democratizes decision-making, enabling interest alignment for all parties participating by allowing them to have a say in the future directions of the protocol.
Who can vote?
A random snapshot of UTK (ESDT) holdings will be taken between 24.07 and 30.07. All users holding UTK (ESDT) at the time of the snapshot, be it available in their wallets, staked in Metabonding or in farms are eligible to vote.
IMPORTANT NOTE: Your voting power equals the UTK (ESDT) balance recorded during the snapshot. You can check your voting power by connecting your wallet in the governance module on the xMoney website.
How many days will the vote last?
The voting procedure for this proposal will span over 7 days from the 07.08 to the 13.08.
How will the votes be cast?
Here are the 3 available voting options:
- Yes – this will register you with your total voting power as PRO/YES the switch from UTK 2.0 to UTK 3.0.
- No – will register your total voting power as AGAINST/NO the switch from UTK 2.0 to UTK 3.0.
- Abstain – will register your voting power as NEUTRAL to the switch – but even if it may seem unimportant, these votes actually help the proposal and thus put the power in the hands of the people who vote and care about the network. So we encourage users that don’t have a strong opinion to still vote, so that the decision for the proposal is made based on the governance votes rather than users who don’t bother.
How can the proposal pass?
In order for a proposal to pass it needs to pass: Simple majority is needed: more than 50% of votes should be UpVotes
On UTK 3.0
What will happen with Metastaking on xExchange?
Liquidity providers for UTK/EGLD will be able to stake their LP token into Guilds.
What will happen with Metabonding on xExchange?
Metabonding program duration was envisioned to last for 2 years. We are already in the second year and the Metabonding rewards will continue until the second year is concluded or the Guilds go live, whichever comes first.
What are the staking APY options?
Right now we are exploring the following options: 8% APY if you stake for at least 3 months, 10% for least 6 months, 15% for least 1 year. You can maintain the same APY after the locking period ends as long as you do not unstake any UTK.
What cashback tiers to expect?
Cashback will be available to those that stake into xMoney Guilds. However, there might be a free tier for new users, that might get a one-time cashback (eg. 0.25%) on their first purchase (claimable only on xPortal App).
An example of tiers could look like this:
- Standard Tier: 0.25% cashback; +1 000$ worth of UTK staked
- Tier 1: 1% cashback; +2 000$ worth of UTK staked
- Tier 2: 2% cashback; +20 000$ worth of UTK staked
- Tier 3: 5% cashback; +150 000$ worth of UTK staked
- Tier 4: 8% cashback; +300 000$ worth of UTK staked
Notice: these are not final numbers, and some terms and conditions will apply.
- There will be several tiers with varying caps of pledged amounts, and more cashback for each of the tiers.
- A Guild can be created by anyone, but a limited number will be available at the beginning.
- In order to create a Guild a minimum of UTK needs to be pledged.
- The top Guilds with the minimum of UTK pledged will be part of the first wave. More waves might come in the future if enough demand is building up.
- Anyone who will want to pledge UTK will need to choose one of these Guilds that will offer an APY of up to 15% proportional to the period of time UTK is locked (i.e. UTK pledges translate into more significant rewards).
- “Guild Masters” (the DeFi pool owners) will be entitled to an additional 10% bonus of the total rewards the Guild generates. For example, if the average APY of the Guild is 10% the owner will receive 1% for all the value pledged.
- In addition, the Guild Master will receive 10% cashback out of the total cashback paid to the Guild members. For example, if the average cashback paid is 2% of the value purchased, then the Guild Master will get 0.2% of that value.
- The initial deposit locked by the Guild Master to create the Guild will generate the maximum APY of 15%, but the initial deposit needs to be locked for at least 6 months, and cannot go below the minimum.
We encourage your participation and value your input as we embark on this remarkable journey of building and growing together. Should you have any further inquiries or thoughts, please feel free to share them by completing the provided question form.