Arbitrum’s ecosystem game Layer3 Xai has revealed an airdrop message on the X platform, providing over half of the token supply to the community and developers. Before diving into the upcoming airdrop, this article will explore the past development history of Layer3 Xai.
Recapitulating the development journey of Xai, its tokenomics was released in October. Xai and esXai (staking) have a total supply of a staggering 2.5 billion tokens. What’s noteworthy is that more than half of the supply, specifically 50.1%, is allocated to the community, Sentry node operators, and the Data Availability Committee (DAC), demonstrating Xai’s value for its community members and contributors. Additionally, 22.4% of tokens are allocated to investors, 20% to the team, and the remaining 7.5% is used for ecosystem development and maintenance.
On the technical front, XAI showcases its uniqueness. It is a permissionless Orbit chain that adopts the Arbitrum Nitro technology stack, aiming to bring a game-centric Layer 3 solution to the gaming industry. This technology not only enhances transaction efficiency but also improves the network’s scalability, creating more possibilities for game developers and players.
Furthermore, Xai’s network allows anyone to participate through operating nodes. This not only provides regular users with the opportunity to earn network rewards but also allows them to engage in network governance. This feature reflects Xai’s pursuit of decentralization and its commitment to providing substantial participation and contribution opportunities for community members.
It’s worth mentioning that Xai was developed by Offchain Labs utilizing Arbitrum technology. This collaboration demonstrates Xai’s potential in technological innovation and ecosystem building, as well as its position and influence in the cryptocurrency industry.
With the community’s increasing anticipation for the Xai airdrop, we can foresee new development opportunities for this ecosystem. In the following sections, we will delve deeper into Xai.
By delving into XAI, we discover that its financial support and technical architecture are key to its success. Just like many blockchain projects, XAI is supported by a foundation. Xai is supported by the Ex Populus Foundation, which raised $12 million two years ago, along with some undisclosed funds. This fund size, especially compared to Offchain Labs’ funding of over $120 million, indicates a solid financial foundation for the XAI project.
There are also new developments concerning Sentry nodes for XAI Games. As an L3 blockchain, XAI Games is designed to allow different operators to run nodes on various platforms, whether it’s cloud-based, on laptops, or desktop computers, ensuring network integrity and security. This flexibility provides new opportunities for widespread user participation in blockchain operations.
The sales method for Sentry nodes is particularly intriguing. XAI Games plans to sell 50,000 node key NFTs through a Dutch auction. This sales method allows the price to change over time, with the starting price at 0.13E and the current price at the 9th layer reaching 0.4E. Linking the Sentry node price to Ether may be a strategy to attract investors, but it also brings considerations for market price fluctuations.
In conclusion, the financial support behind the Xai Foundation and the innovative sales strategy for Sentry nodes constitute the two pillars of the XAI project. This not only provides a solid financial foundation for the future development of XAI but also offers participants new technological and economic opportunities. In the upcoming content, we will explore the token economics of Xai and its potential impact on the entire ecosystem.
XAI is not just a record token for the Xai blockchain; it is also the cornerstone of its ecosystem. Similar to traditional L1 and L2 tokens, XAI has broad and essential utility, serving as the gas fee token within the Xai L3 ecosystem. This means that all network operations and transactions require the use of XAI as fuel.
XAI’s total supply is clearly distributed among different groups. Among them, 20% is allocated to the core team and early contributors, which starts unlocking six months after the token generation event (TGE) and gradually unlocks within the following 36 months. Additionally, 22.41% of the supply is acquired by early investors, which starts unlocking six months after the TGE and completes unlocking within 24 months. Regarding ecosystem allocation, 2% of the supply is designated for market makers and unlocks immediately after the TGE, while 5.5% is allocated for ecosystem development, which starts unlocking six months after the TGE and completes within 36 months.
XAI can also be exchanged for esXAI, which is a special type of token. Unlike XAI, esXAI is non-transferable and primarily used for staking within the Xai ecosystem, providing stakeholders with various benefits. This includes rewarding Sentry node operators and providing them with a range of privileges and perks. The staking mechanism for esXAI allows node operators to freely adjust their staked esXai among three different accounts:
1. Yield Account: Node operators staking esXai in this account can earn additional esXai rewards.
2. Culture Account: By staking esXai, node operators can participate in exclusive game-related activities and NFTs on the Xai blockchain.
3. Governance Account: Node operators can gain governance rights for the DAO, including proposing the use of DAO/Foundation funds, through staking.
The exchange rules between Xai and esXai are bidirectional, allowing users to choose based on their needs. Converting Xai to esXai is a free process without any penalties, and the ratio remains 1:1. However, converting esXai back to Xai involves a locking period, which users can determine themselves. The conversion ratio varies with the length of the locking period, with longer periods offering higher conversion rates.
This exchange mechanism significantly impacts the Xai ecosystem. Firstly, it introduces a certain level of deflationary pressure for Xai, as all gas paid within the Xai ecosystem is burned. Secondly, the emission of esXai for Sentry nodes depends on the current circulating supply of Xai and esXai. This dynamic emission rate design aims to automatically adjust based on changes in the total supply, ensuring supply flexibility and adaptability.
Moreover, the exchange mechanism between Xai and esXai inherently reduces market selling pressure. Combined with Xai’s robust gaming ecosystem, including relationships with major partners like Tencent, this design becomes particularly important. It not only supports the continued development of the Xai ecosystem but also offers community members a window of opportunity to witness explosive ecosystem growth and choose to hold.
The network rewards for Sentry nodes within the Xai ecosystem are an aspect worth paying attention to. While accurately predicting the rewards for each Sentry node is difficult, estimations can be made based on market conditions and assumptions. These estimations are based on assumptions such as the XAI and esXAI total supply not exceeding 2.5 billion, supply deflation due to 100% gas burning, and the Xai Foundation not selling more than 50,000 Sentry keys.
The economic models of XAI and esXAI constitute the core of the Xai ecosystem, and their interaction not only affects the execution efficiency of the network but also has profound implications for the stability and sustainability of the entire ecosystem.
With the development and maturation of the Xai ecosystem, the design of XAI and esXAI tokens demonstrates its ambition in building a diversified and sustainable blockchain environment.
As the fundamental token of the ecosystem, XAI provides the fuel required for network execution, while the introduction of esXAI brings more staking opportunities and rewards for participants. This dual-token system not only ensures efficient network execution but also encourages community participation and investment.
As a result, we can foresee that the XAI ecosystem will continue to attract more participants and investors. Its deflationary mechanism and staking incentives are expected to provide a stable and vibrant ecosystem for Xai in the future. This will not only promote the development within the Xai ecosystem but also potentially bring new innovation and growth momentum to the entire blockchain industry.
