S1E17: xToken Terminal

August 15, 2022

0:00 Introduction • 3:40 What is xToken? • 10:22 What caused the pivot for xToken? • 13:13 Current projects that xToken is working on. • 27:30 Do you see your users using both launch tokens and mining incentivized liquidity? • 32:10 A real-world example of how xToken could help someone. • 37:27 How does the xToken navigate with the audit process? • 39:56 Closing thoughts

The Bean Pod



What is xToken?

  • An infrastructure platform for the development and deployment of tokenized assets.
  • A permissionless investment bank.
  • Mission is to standardize fundamental on-chain primitives in a way that is simple and secure.
  • Allows teams to focus on their core competencies rather than reinventing the wheel developing solutions for needs that are common among most projects, such as token sales, NFT mints, boosting liquidity through on-chain incentives, or buying back liquidity through bonding.

What caused the pivot for xToken?

  • They saw an opportunity to help a broad audience by pivoting to infrastructure instead of ad hoc asset management.

Current projects that xToken is working on.

  • Liquidity Mining: Simplifies Uniswap V3 liquidity mining for both liquidity providers and projects.
  • Capital Origination: Makes token sales permissionless, simple and secure.
  • NFT Minter: Handles the financial components of an NFT mint.
  • Liquidity Auction: Novel bonding system.
  • Native Collateralization: Enables projects to borrow assets using their native tokens as collateral.

How does the xToken navigate with the audit process?

  • Undergone two audits and started an Immunify bug bounty program.
  • Brought in some professionals after some security hiccups early in their history.


[Music] hey folks rex here and i wanted to take just a moment to remind you that beanstalk's barn raise initiative is still underway over the past month we've been working to restore the funds lost during the governance exploit in april and i gotta tell you we have been blown away by the response at the time of this recording more than 17 million dollars has been raised and now the protocol is back on that liquidity is starting to earn yield for those that provided it now that being said there are still barn raised tokens also known as fertilizer available for purchase but the fertilizer return rate is reducing by half percent per hour so it'll never be higher than it is right now to participate head to the bean.money site and click on the word barn in the site menu from there you'll be able to buy fertilizer tokens accept your bean yield as it's paid out and most importantly learn more about the process so that you can make an informed financial decision so go check it out and maybe i'll see you at the barn race [Music] welcome to the beanpod a podcast about decentralized finance and the beanstalk protocol i'm your host rex before we get started we always want to remind everyone that on this podcast we are very optimistic about decentralized finance in general and beanstalk in particular with that being said three things first always do your own research before you invest in anything especially what we talk about here on the show second while you're doing that research try to find as many well-developed opposing viewpoints as possible to get the best overall picture and third never ever invest money that you can't afford to lose or at least be without for a while and with that on with the show [Music] there has never been a better time to develop a crypto project if your world-changing idea requires decentralization censorship resistance immutability or unconventional financing you're in a better position to achieve those goals now than ever blockchain technology in general and decentralized finance in particular are beginning to change how we think about ownership fundraising intellectual property and more but at the same time the potential for and costs of failure have never been higher especially for those working outside of their area of expertise your idea may be fantastic but if you don't have access to high quality developers to make it a reality it might never get off the ground or even worse it might but then suffer a major failure or security breach after deployment when the results could truly be disastrous the team at x token is actively working to solve this problem with their growing suite of apps xtoken is building a user-friendly system for development and deployment of tokenized assets their goal is to make a system that's easy to use capital efficient and lets founders focus on the great things these new projects are actually trying to achieve rather than cumbersome and risky coding in tokenomics for this episode ben from x token is joining mod and in the studio to talk through what they're all about well ben welcome to the podcast thank you so much pleasure to be here and mod welcome back thank you for having me absolutely ben you got a great project going on here to kick us off um why would you just tell us what x token is all about like how are you trying to help add to the d5 ecosystem with your with your project yeah absolutely so before we talk about x token terminal i think it probably makes sense to provide some historical context because x token's actually been around since july of 2020. um so about you know a little over two years ago we were actually an asset management protocol and we specialize in native staking strategies and liquidity strategies peaking around 150 million in dbl throughout this work we found that we needed to incentivize many of our funds and to do that we were actually building our sort of own internal staking rewards systems and incentives infrastructure so when we pivoted to where we are today which is really sort of an infrastructure platform it was sort of a natural transition because um really we were just generalizing and productizing internal infrastructure and systems that existed and making them permissionless with you know a really great user experience on top so fast forward to today um and we we sort of announced the vision for x token 2.0 in january of 2022 which is right around where i joined as the lead for our growth team and really what x token terminal aims to do is we're building what we call a permissionless investment bank so our mission is to standardize fundamental on-chain primitives in a way that is really simple and secure so let me just explain what that means a little bit because it's you know veering into very like financial jargon most projects in the space whether they're defy c5 nft projects you name it kind of do these common fundamental on-chain financial things whether that's raising funds through a token sale or through an nft mint whether that's uh boosting on chain liquidity through lm incentives or buying back liquidity through bonding mechanisms most projects undergo you know one or all of these throughout their life cycle and we see most projects today are sort of taking this on in-house and for some projects it works reasonably well um you could argue that there are inefficiencies in that they're sort of allocating you know precious dev hours towards something that's outside of their core competencies but at worst um you know a lot of times we've seen in this space they're exposing security vulnerabilities to their users to the contract to the protocol and we've even seen examples where like contracts get you know a project's ether gets locked inside of a contract and they can't take it out due to like a botched withdrawal function or other just kind of seemingly simple um mistakes that are made throughout the the financial contract development process so really what we're all about is generalizing contracts for these core d5 primitives packaging them in a really nice user experience and making them totally permissionless and trustless so to me this is this is a fascinating project what i love about this concept is that there is a gap especially when it comes to taking concepts or problems to fix in the real world and using decentralized finance or cryptographic processes in general to help solve them because we have so much specialization in so many different areas but it is it's still very rare to find individuals that know a lot about let's say climate change and tokenomics or you know any other type of social program or um different types of organizations that are off chain inherently giving them the ability to improve their functionality or find new audiences or find new capabilities leveraging blockchain technology cryptography decentralized finance and that's it seems like you're you're opening up a new world to non-d5 native people and organizations right yeah absolutely i mean today um mostly we're working with sort of native d5 projects who simply understand that you know they don't need to or want to invest significant development hours into building these uh financial contracts but there certainly could be use cases outside of sort of crypto native because um eventually and you know we're still kind of building out our our roadmap of of applications but eventually we will be able to take from sort of end to end in you know launching a token provisioning liquidity um and you know conducting other sort of treasury management practices so it could be um as you mentioned you know a great way to onboard a company that wants to get onto the blockchain and wants to participate in d5 but isn't necessarily familiar but i think it's sort of a dual audience of um you know we can really cater to sort of those defy native projects as well because even with a ton of experience in with blockchain technology and in the space doesn't necessarily mean that they have experience with like uniswap v3 for example or setting concentrated liquidity ranges or it may just be a trade-off of hey we'd rather focus on our sort of core product and leave the financial contracts for people who do this for a living that's a great point the other thing that i noticed as you were talking about some of the background was that it seemed like in in version one of x token you told a story that i feel like is so common in defy in cryptocurrency where like someone is is working on a project or working towards a particular solution and they run into a new problem and in the process of solving that problem they find a whole new set of use cases and that's i mean that's it's such a good story and such a common story in d5 i know that this might have been slightly before your time be can you talk us through that pivot at all yeah um it was you know kind of just before but i can i can certainly share you know sort of from our founder michael cohen's perspective and what he shared with me so i know um one of the main catalysts for it was just the fact that you know asset management is it's really really difficult to be profitable it's it's very ad hoc work we were working with all these different tokens and all these different strategies and sort of it was very ad hoc right one of them would change something and we would have to change our sort of liquidity strategies on behalf of that and it was just a lot of work sort of managing you know each one was essentially its own product in trying to manage those ad hoc and and just the sort of margins if you will on asset management are are really tricky so there was a financial incentive certainly to pivot um the other you know probably larger part though was just as we were you know getting this expertise with uniswap so for a time we were actually the largest provider of uh uniswap v3 liquidity strategies we had around 25 million in assets under management so we had a ton of experience there we were able to you know we're advising all these different strategies uh with that in mind and we just saw really the opportunity to help the space this was also around when you know with ribbon finance they had a not really an exploit but there was um an issue with most of their contract rewards being siphoned out by these one tick strategies which you know we may talk about a little bit later in this podcast when we talk about our liquidity mining app so we're seeing projects get kind of wrecked in certain ways and really just saw this is the better opportunity to pivot to infrastructure to be able to help you know a much broader audience absolutely and you give me a great transition because that was really what i wanted to talk about next so as i look through information i see a discussion about these these five apps that are being developed by x token two of which are currently developed in three which are under development if i've got that right and would you take a minute and just walk us through those those apps their functionality how they you know benefit projects that are looking to use your service yeah absolutely and before we jump into sort of each app and and what they do um i'd like to talk a little bit about sort of our core design philosophy because i think that's really important in all the apps that we've made in are planning to make in the future um so really at the core of our product we want all of our applications to be entirely permissionless and trustless we want folks to be able to do these on-chain primitives whether it's you know standing up a liquidity mining incentives program or selling a token you know if that's publicly privately whatever or minting an nfp without any gatekeeping so you don't need x token involved in the process to you know say the word go and we we have no you know once the contract is initialized we can't change it so trustless as well and we really wanted to make each of these apps end to end so we see many solutions in the space especially around uniswap v3 sort of lm as a service where part of the process is within you know a native product but not the whole thing so we wanted you to be able to deploy a pool um deploy an incentives contract re-up that contract do everything sort of end to end and that's going to carry out through all of our applications we also really believe in open source architecture so all of our contracts are super flexible open source and if any projects want to build you know their own custom ui to sort of bring our contract into their uh brand and in their world you know go for it we think that's awesome the other thing that we really want to make sure it shines throughout each of our app is just a top-notch user experience so this is an area of d5 that we think is you know really lacking today and we put a ton of investment into just making things you know as seamless as possible boiling each of these complex interactions down to just a couple of clicks so let's jump straight into our first application liquidity mining and what mining aims to do is really simplify the uniswap v3 liquidity mining experience both for liquidity providers and for projects uh what we call pool sponsors who are actually configuring and deploying these incentives programs so in case you're not familiar with unit swap v3 it's a step function improvement on you know previous iterations and one of the most powerful features of v3 is this concept called concentrated liquidity so prior to concentrated liquidity lps would be you know providing their liquidity across a price curve from zero to infinity so basically able to you know swap at any price range but what we found is there's a lot of capital efficiency lost because you know prices there's not often swaps at the sort of upper or lower ends of this so unisoft came up with a concept called concentrated liquidity where instead you'll sort of predetermined across different price ticks lps will be able to select their liquidity range and provide it in a much more complicated fashion and especially for tokens that trade either sort of in tandem or in more stable ranges this can be really really powerful from a capital efficiency perspective but it does bring certain layers of complexity as well so on the pool sponsor side um you know if you're deploying your own uniswap p3 liquidity mining program you'll need to develop your own custom smart contract so there's not sort of a you know easy sort of native ui like there was with unisa v2 where you could just click a couple buttons and deploy so you need to be also pretty you know technically savvy and familiar with uniswap and with the concept of concentrated liquidity you'll need to develop your own custom user interface and you'll probably want to get those contracts audited so what we're seeing is at minimum that's about two to four weeks of development time um if all goes well it can be quite expensive um especially you know audits are not cheap and can carry significant risk of contract exploit or different you know errors as well so sort of the catalyst for the terminal mining application because with terminal mining all you really need is a web3 wallet and you can deploy in less than five minutes so we really make this sort of a more v2s experience where all pool sponsors need to do is select the trading pair that they want to incentivize set their range set their feet here set their incentives token and then the parameters of the actual payout so you know how many weeks they want to pay out and at what price and that is pretty much it so they can deploy in you know less five minutes and it also makes the experience a lot easier for liquidity providers as well because the pool sponsor is going to set that liquidity range and um the pool sponsor really just deposits and earns much more like the previous experience so lps don't have to actually you know understand concentrated liquidity or set their own if they want to participate in a terminal pool so that's liquidity mining we also have a soon to release application called capital origination so it's not fully completed yet it is on test net and um just finishing up a couple things on the front end but essentially capital origination so it carries forward really that sort of design philosophy we talked about of making token launches token offerings really permissionless easy simplified and secure so origination is basically we think of it as sort of an on-chain you know coin list or an on-chain kickstarter and what you can do is in a couple of clicks you can launch a public or private token sale so we'll handle you know we'll handle all the financial part you just put in what token you'd like to sell what tokens you'd like to receive any parameters you know is an ascending or descending auction is there a white list and we'll handle all the sort of mercurization you just have to upload a csv you can also do a public private hybrid if you want different rounds you know some white listed some public at these prices so just simplifying all those different parameters that would be entirely custom um it can be great for crowdfunding as well so because it's permissionless and you know you can set your own parameters if you want to just if it's a personal project or sort of an early stage idea or even like a family and friends fundraise for something it's it's just super easy to use um and we we build in a layer of discoverability as well because there are folks who use our platform and they're sort of looking for new opportunities both for liquidity incentives and for um you know checking out new token launches as well next up we have capital origination and this app actually isn't live yet today the contracts are done it's on test net but we're finishing up a couple of things on the front end it should be live later this month so origination really carries forward that design philosophy of making token offerings really permission-less and simple and secure we think of it as sort of an on-chain version of a coin list or even a kickstarter so some potential use cases for origination would be like a you know a simple public sale if you want to select the token that you're going to be selling in the offer you can determine which tokens you want to receive in exchange and then any ascending descending you know different kind of price configuration options as well we also have a private token sale option so here you can you know upload a simple csv with investor addresses and allocations and we'll handle all the mercalization and for your private sale you can also do a public private hybrid with various rounds this is great for sort of crowdfunding so sort of that kickstarter as well because it's permissionless and because it can be used by anyone you know this doesn't have to be like an official ido ico it can be sort of just raising for a personal project or an early stage idea or some like a family and friends range as well it also brings some novel mechanics as well like you can do sort of olympus style bonding where a project can buy back except sort of accept lp tokens as payment for an erc20 at a fixed ratio so sort of buying back some of that liquidity can also be used in you know let's say a merger and acquisition so if you want to allow users if there's an acquisition between two firms two tokens and you want to allow users to convert from one token to another at a fixed ratio you could use our application to do this you know pretty easily so we're really looking forward to capital origination and that should be out in the coming weeks and that's really just for any project who wants to sell an erc 20 token um so the next application in our pipeline is called nft mentor and um similar concept to origination really but instead of selling erc20 tokens we're handling the financial components of an nft mint so you can go in set the parameters if you want to do a public sale private sale with whitelisting or a combination what tokens you want to accept is it going to be you know a dutch auction or an ascending option all the custom parameters and easily deploy um this is especially interesting because we've seen a lot of nft projects so a lot of these teams are you know much smaller than a d5 project it might be just like two or three folks and we've actually seen certain contracts where people get have have gotten sort of wrecked like with um accutars which is actually a really high profile mint but they had a flaw in their withdrawal function and they had i can't even remember the exact amount it was something like 4 000 ether was just locked in their contract forever i remember reading about that and talk about heartbreaking yeah no kidding so um you know just because these teams have really limited depth hours you know we think that this can be a really powerful tool uh for ft projects who just don't want to take any risks or want to concentrate their dev hours on building out the product so that's nft mentor that should be live you know sometime later this year and we have a few others that are in the pipeline um i won't speak too deeply on them just because uh things can change i'll definitely urge you guys to read sort of our x token 2.0 blog post by michael cohen where he kind of outlines um his philosophy and some of the upcoming applications but two that we're looking at is a liquidity auctioning application where um projects can actually you know auction off liquidity so sort of a novel bonding mechanism and then a native collateralization where you can borrow a project can borrow with their native token they can borrow another asset using their native as collateral those are a little ways off and um just want to mention too it's important for us so we we've got this sort of core design philosophy again and we want to make sure that we're staying flexible just because this space is so dynamic and you know changes so frequently that uh you know not too long ago before olympus projects weren't even looking at like you know bonding mechanisms so we really want to make sure that we're staying on top of the market and not like planning years and years down the road in terms of what apps we're going to build and of course you know we're moving so quickly and developing all these apps we want to make sure that we're fine-tuning each of our existing products as well then i wanted to ask a question about the mining and origination apps do you see your users use both of them so you know they start first of all with a launch token and then they use the mining app to incentivize liquidity or do you find that you know define them separate typically yeah great question um that's the vision and we do expect that to be a core part of our audience in the future just because they're already familiar with our platform and our contracts and our team um because origination's not actually live yet it's it's difficult to say but it does make sense from a sort of a project life cycle perspective because a lot of times they'll you know sell a token or perhaps mint an nft and then they'll need to figure out you know how do we bootstrap liquidity for that token so it does sort of go hand in hand and it's a natural progression throughout our applications and if i was to summarize the mining app what it basically is how to distribute you know incentive or yield and you do that basically depending on the users how concentrated they are in the in the pool am i understanding that correctly yeah it's a way exactly it's a way to use unit swap v3 without needing to create a custom contract so using our architecture to deploy permissionlessly and without requiring contract development and then distribute the yield according to you know how concentrated you want the providers to be correct so you'll still earn on swap fees like regular uniswap and you can also distribute liquidity incentives so a lot of times projects will do this just to ensure that they have deep liquidity so for example we just want a proposal with optimism to distribute op tokens on optimism through unispot v3 so the reason optimism would like to do this is because they need to ensure that they have really deep liquidity for users to swap so it's going to be an op pool otherwise they're going to be hit with you know massive slippage fees and in addition to having deep liquidity we want to have sustainable liquidity so it'll be a six-month program where rewards are paid out linearly to encourage lps to keep their liquidity in for a longer period of time so that's sort of the ins the reason that projects would do liquidity mining incentives is to bootstrap that liquidity but it's also a really powerful marketing and community tool as well congratulations on the uh optimism uh news i i read that thank you yeah we're really excited it's um it's a a pretty massive uh program and we're actually doing it in conjunction with um gamma strategies and with uniswap v3 staker so it's pretty interesting we're actually working with some of our you know quote-unquote competitors in the space and the reason that we're doing this is um just to provide because we really do believe in building this sustainable base on optimism so we're thinking long term because i think there's a huge experience you know for us to reach more and more projects in the optimism l2 space it's very friendly for liquidity mining compared to mainnet where you're still paying these chunky transaction fees so to give users the best experience you know there's something to be said about the decentralization of the three different platforms but it also brings lp's different options so you've got x token on one end of the spectrum that's a really easy you know what we're gonna do a full range or a wide concentrated liquidity range deployment super easy user experience users can just kind of deposit and start earning and then you've got gamma strategies that is much more on the active management side so they'll actively manage the concentrated liquidity position and then on the extreme end you've got for more advanced users who are looking for the highest possible capital efficiency and yield you've got uniswap v3 staker and with v3 staker lps actually actively manage their own positions so between these three options we think we've got something for just about you know everyone who wants to participate in this program so ben i want to walk you through a scenario that's been floating around in my mind since you started and i was originally going to going to give you an example or have you walked through an example that was for like a uh tokenized carbon credits like a climadow situation but as as you're talking i've had another idea enter my mind let's say that let's say that um i wanted to start publishing comic books and so if i'm going to be a comic book publisher i need to i need to raise some funds and then i need to i need to be able to mint nfts in terms of a product so if i'm understanding x token correctly the the you know the broader terminal ecosystem i could i could develop my token that i'm going to use for for funding my my publishing house using using the mining app then for once the origination app is done i can use that origination app to get an initial sale to start bringing liquidity in so that i can fund development and my initial artistry and you know get get the process rolling and then from there when i have when i have art developed i can tokenize the art in terms of an nft and then i can use mentor to handle the financial components of getting those nfts out into into you know users hands right that like is that that kind of how that process would work yeah that's exactly right so um you know in this example those are all pretty typical things so there's a you know comic book company that wants to like you said um they'll try to generate some funds um let's say they do the token launch first so they can use origination they create the erc20 token they start marketing it they use x token terminal to actually facilitate the sale so whether that's public private or some kind of hybrid they set all the custom parameters they start the offering and they raise funds there so now they've got a token that's you know out to market so then they're going to need some liquidity for that token because users are going to want to be able to buy and sell so they could use x token terminal if they want to take advantage of you know if if their decks of choice is unispot v3 then they can use us to in a couple of clicks create that liquidity mining incentives program so now users who stake that token paired with something like let's say e is a pretty common base pair and then they'll earn additional tokens so they're earning yield on just holding that token and heath and providing liquidity for swaps so now they've got this token out to market people can buy and sell on uniswap people are providing liquidity so it's pretty the price is pretty stable and deep and they're finally ready to launch their nft which by the way they've been using us to develop all these financial contracts so they've had a lot more time and their developers have been able to fit you know focused exclusively on the product so they've got the art all generated and ready and they use us to facilitate that token sale so they upload the nfts they upload the whitelist and they select their token of choice they're going to receive each and they go ahead and launch that nft mint so we've just taken them you know this might be a six month process or whatever but we've just sort of enabled them to permissionlessly launch a token bootstrap liquidity through mining incentives and launch an nft contract love it that is i mean it's again it kind of goes back to this idea and and i and taking into account of course what you said about you know a lot of your current partners being d5 native but there are so many irl applications where you know there are people with good ideas and they say man i'd like to i'd like to utilize blockchain technology and i've got something that works but i just don't know how to do x y or z and that is that's a fantastic opportunity to have people that have good ideas and be able to to show them that road map i mean like that is for me that's a real game changer yeah absolutely are actually our first ever liquidity mining customer was uh this project called seated out who's tokenizing real real estate so real world world assets they're um you know selling real estate uh through erc20 tokens and putting it on chain putting the decentralizing the ownership and putting it entirely on chain which is super cool and definitely um sort of plays to you know what you're speaking of some of those real world use cases that can be brought onto the blockchain so when as you've been talking about you know the services that x token provides you've mentioned security a couple times at beanstalk we are um very conscious of security and security concerns how do how does your team navigate you mentioned like you know one of the things that you take care of for your users is the audit process how do you navigate that is that where does x token like contract with an external security group or are you doing the audits internally how's that managed yeah no it's a great question and it is a tremendous concern in the space i mean we've seen so many high profile uh layer one blockchains protocols get absolutely wrecked and that's that's definitely something that you know is is near and dear to our protocol so we've undergone um i'll speak specifically for the the mining contract on this one we've undergone two successful audits with abdk and wassertech we've also done a um immune fi bug bounty program where white hat hackers you know basically try to break the system and they get incentivized to do so and all of our audits are are publicly published you can find them in our docs we've also implemented a number of other additional security features into the contracts including a time lock feature so depositors can't interact with a given pool more than once in five minutes so depositor would have to wait five minutes to withdraw or deposit again and it's not like you know a magic bullet but it does help reduce sort of the surface span space for attacks powered by flash loans because flash loans are you know it's it's part of the uni swap protocol but it's also an area where people get you know in big trouble absolutely yep so that's what we're doing today um we've really bolstered you know early in our history we also suffered some you know security hiccups so we've really bolstered and brought in professionals on the team as well and it's something that we just keep a really close eye on the technology and the space and where it's heading to make sure that we're at sort of you know the crest of uh of hub space that's great so we're getting down in terms of time um i want to i want to hand it back to you to just say hey any any parting thoughts anything specifically else anything else you'd specifically like to to tell our listeners about about your project yeah i think we've covered a lot of ground um i would just say you know come check us out we've you know we've got a active discord community you can follow us at x token terminal you can follow me at the golden underscore eel and we're just really open to user feedback so i firmly believe you know i come from sort of a marketing strategy consulting background uh working on things like user experience so i strongly believe in customer feedback so we'd love to have you guys come you know test the project to test the product it's permissionless so you can get your hands on it in testnet um for free you know you can go on on girlytestnet and we'd love your feedback is there any are there any other financial primitives that you think we ought to work on using this same design philosophy um how can we make our current products better so come on in and uh we'd love to uh hear from you well this has been fantastic ben thank you so much for joining us thanks for having me really a pleasure uh enjoyed speaking with you guys and glad i could share a little bit about x token as well absolutely and mod thank you as always as well thank you and just to give you that information one more time you can find out more about x token online at x token terminal dot io and you can also find them on twitter at x token terminal [Music] the beam pod is a production of beanstalk farms a decentralized autonomous organization you can find us on twitter instagram medium discord and our home on the web at bean.money you can also find me on twitter at rex rexthebeam and as a final reminder this podcast is not financial advice thanks again for listening [Music] you